Minorities on the Margins? The Spatial Organization of Fringe Banking Services

:Case studies in select large cities have found that fringe services, including payday lenders, check cashers, pawn brokers, and money transmittal companies are more geographically accessible to predominantly minority neighborhoods while traditional banks are more accessible to white neighborhoods. However, many analyses are bivariate rather than multivariate and do not disentangle the influence of neighborhood socioeconomic status from that of race. Furthermore, the fringe services industry contends that market factors, such as zoning, arterials, population base, and commercial activity influence location. This study employs geographic information systems (GIS) and multiple regression to untangle the spatial relationship between minority communities and traditional and fringe banks in four small-to-moderate-sized metropolitan areas. We find that, though market factors are indeed powerful determinants of fringe bank location, there are nonetheless persistent ethnic effects in two of the four cities and these effects cannot be attributed to factors correlated with a large minority presence.