Proceedings of the International Association for Business and Society

Volume 29, 2018

Proceedings of the Twenty-Ninth Annual Meeting

Ian M. Dunham
Pages 96-109

Forgotten Landscapes of Financial Exclusion
A Geographic Analysis of Banking Deserts and the Two-Tiered Financial Service System

The majority of Americans utilize mainstream banks and credit unions to complete basic financial transactions, however, many rely upon informal, alternative financial service providers, thus remaining unbanked or underbanked. The presence of brick-and-mortar check cashing and payday loan storefronts in low- to moderate-income neighborhoods remains controversial, as reliance on these services may present a financial hardship to consumers. This study utilizes geographic information systems and binary logistic regression to test the hypothesis that sociodemographic characteristics have a predictive relationship on the presence of banking deserts—census tracts where check cashing outlets are more prevalent than mainstream banks—in southeastern Pennsylvania. Results reveal that banking deserts are predicted by comparatively higher population density, lower levels of median household income, higher proportion of Black and Latinx residents, and higher levels of mortgage application denial. This study aims to better understand the two-tiered financial service system in the interest of promoting financial inclusion.