Credit Where It's Due

Wherry, Frederick F.; Seefeldt, Kristin S.; Alvarez, Anthony

doi:10.7758/9781610448840

Cited by 46 publications

(8 citation statements)

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“…Unlike affluent households, which predominantly access housing credit, less wealthy households often resort to consumer loans, hindering their ability to amass valuable assets. Furthermore, their reliance on AFS like payday loans not only marginalizes them from the mainstream financial markets but also renders them invisible in the credit system, preventing them from debt-based wealth accumulation (Wherry, Seefeldt, and Alvarez 2019). Thus, my research highlights an organizational process of debt-based wealth accumulation that stratifies household wealth.…”

Section: Contributionmentioning

confidence: 89%

In the Red: How Bank Concentration Fuels Debt Burden for Households, 1995–2019

2024

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From 1995 to 2019, the average household debt burden in OECD countries increased from 71% to 127%. While financial deregulation and welfare retrenchment have been identified as key contributing factors, the impact of bank concentration on this trend has remained less understood. This study explores the contribution of bank concentration to household debt burden by analyzing data from the Luxembourg Wealth Study, covering over one million households across 16 affluent democracies during the same period. Results show that an increase in country-level bank concentration leads to a higher household-level debt burden. To uncover the mechanisms at play, I evaluate two hypotheses: market power and resource partitioning. Contrary to the expectations of the market power hypothesis, causal mediation analysis indicates that the relationship between bank concentration and household debt burden is not mediated by increased profitability in the banking sector. Instead, the evidence supports the resource partitioning theory, highlighting the significant role of nonbank financial organizations. Notably, the study finds that the non-housing debt burden of low-income households is particularly influenced by the proliferation of these organizations. This research sheds light on an overlooked driver of household indebtedness, illustrating an organizational process of debt-based accumulation that stratifies household wealth.

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Section: Contributionmentioning

confidence: 89%

In the Red: How Bank Concentration Fuels Debt Burden for Households, 1995–2019

2024

Preprint

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“…The literature on financialization yields further insights in understanding the complexities of the role of finance in everyday life (Epstein, 2005; Krippner, 2005; French et al ., 2011). Similar to the concept of citizenship—which in an ideal world entails a sense of belonging, dignity and respect—the term ‘financial citizenship’ has been coined to denote pathways and barriers within the financial system (Wherry et al ., 2019). Complex financial ecologies influence the degree to which consumers are both excluded and included in the broader financial system (Leyshon, 2021).…”

Section: Discussionmentioning

confidence: 99%

FRINGE FINANCIAL ECOLOGIES AND PLACE‐BASED EXCLUSION: A Tale of Two Cities

Dunham¹,

Foster²

2023

Int J Urban Regional Res

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Access to safe and affordable financial services is essential to the economic well‐being of individual households and entire urban neighborhoods. However, prior research raises concerns about spatial inequities in the distribution of brick‐and‐mortar financial services offerings—either mainstream financial institutions or alternative ‘fringe’ financial service providers—and the resulting implications for financial inclusion and social justice. This study uses a novel method to identify fringe financial ecologies that captures the recent tandem processes of abandonment by mainstream financial institutions and the proliferation of alternative financial service providers. We explore how fringe financial ecologies potentially overlap existing inequalities of race, class and subprime mortgage lending in two US metropolitan areas, Los Angeles, California, and Miami, Florida. Our results raise concerns that communities of color, low‐income neighborhoods and otherwise vulnerable segments of the population are disproportionately at risk of both financial exclusion and predatory targeting. We find that fringe financial ecologies are associated with a high prevalence of subprime mortgage lending. The results advance an understanding of financial ecologies that raises awareness about place‐based financial exclusion as a form of systemic racism in the broader context of the national reckoning with racial justice in the US.

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“…That is, dignity is about centering the humanity in the people around us and treating them with regard. In the academy, it means affirming the humanity of each person we encounter, whether in-person or online, in the classroom or at conferences, and with peers, mentors, staff, and students (for an example of how dignity operates with regard to economic activity, see Wherry, Seefeldt, and Alvarez 2019). This means allowing ourselves and others to set boundaries that are respected and not violated.…”

Section: Foundational Principlesmentioning

confidence: 99%