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The innovation-adoption framework is used to determine consumers' levels of awareness of AMIs and the degrees to which they are able and willing to evaluate andlor accept the complicated alternatives available to them. A mail survey of consumers in Illinois and Wisconsin was structured to compare previous studies on this topic and to compare consumers across various demographic categories. Results indicate that awareness of AMIs is increasing, as is the willingness to accept them with an initial interest rate discount and a limitation on the range over which the interest rate can fluctuate. Findings suggest that some consumers have moved beyond the information-gathering stage, now view nontraditional mortgages as a legitimate mechanism for financing home purchases, and are willing to accept certain configurations of these instruments.

Previous research has concluded that, in comparison to nonminority institutions, minority-owned banks have lower profitability and higher operating costs. This note examines such findings in the context of the expense preference theory of managerial behavior. Rather than focusing on the effect of regulated product markets, however, this research investigated whether imperfections in the capital markets, introduced through government deposit programs making low-cost funds available to participating minority banks, were associated with expense preference practices by minority bank managers. The results suggest that managers of minority banks did not practice the traditional forms of expense preference but instead appeared to act in a manner consistent with public policy objectives.