Article

Navigating the Dual Financial Service System: Neighborhood-Level Predictors of Access to Brick-and-Mortar Financial Services

The availability of retail financial services in low-to-moderate income (LMI) neighborhoods remains a controversial topic, with significant underexplored questions about the potential presence of alternative financial service providers (AFSPs) and the absence of banks and credit unions (BCUs). In LMI neighborhoods across the United States, consumers regularly utilize AFSPs, including payday lenders, for basic financial transactions and services. This article addresses the geographic relationship between retail financial services locations, neighborhood-level demographic variables, and mortgage lending activity in three U.S. metropolitan study areas: Las Vegas, Nevada; Los Angeles, California; and Miami, Florida. The neighborhood-level predictors of the presence of both AFSPs and BCUs are examined at the Census-tract level using Ordinary Least Squares (OLS) and simultaneous autoregressive (SAR) statistical models. The results reveal that sociodemographic variables, including median household income and race/ethnicity, have a significant predictive relationship on AFSP location, even when controlling for spatial clustering.

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