RT Article
T1 The Racialized Costs of “Traditional” Banking in Segregated America: Evidence from Entry-Level Checking Accounts
JF Race and social problems
VO 12
IS 4
SP 344
OP 361
A1 Faber, Jacob William
A2 Friedline, Terri
LA English
YR 2020
UL https://krimdok.uni-tuebingen.de/Record/1747156574
AB A growing body of evidence shows that America’s racial geography shapes access to basic financial services (e.g. banking), highlighting a mechanism connecting segregation to economic vulnerability: spatially organized institutional marginalization.s While the practices and policies of “mainstream” commercial banks are central to this dynamic, the costs they impose on the communities they serve have been understudied. This study leverages survey data from a stratified random sample of 1344 banks across the United States to investigate variation in the costs and fees of entry-level checking accounts at commercial banks. Our evidence shows banks charge more to open and maintain checking accounts in neighborhoods and cities with larger Black and Latinx populations even after controlling for demographic and socioeconomic characteristics as well as market competition. The higher costs of banking imposed on Black and Latinx communities are further compounded by parallel disparities in income. These findings reveal the unequal costs of banking in segregated America.
K1 Segregation
K1 Race
K1 Checking accounts
K1 Finance
K1 Banking
DO 10.1007/s12552-020-09296-y