The effects of bank and nonbank provider locations on household use of financial transaction services

The Financial Services Environment and Schools' Savings Rates in the San Francisco Kindergarten to College Program

“…Other measures of distance previously used in studies that explicitly examine the effects of brick‐and‐mortar financial service locations were ruled out given their limited applicability for San Francisco—a dense urban area. Goodstein and Rhine () use the number of bank and credit union branches and alternative financial service providers per capita (density) within 5 miles of household census tract centroid. Cohen‐Cole () uses the number of payday lenders within 3 miles of an individual residence (3 miles = 4,828 m).…”

“…A wide literature documents variation in the local financial services environment across neighborhoods and communities (Barr et al ; Celerier and Matray ; Dunham et al ; Fowler, Cover, and Kleit ; Toussaint‐Comeau and Newberger ). Manifestations of these variations include the densities and proximities of banks, credit unions, and alternative financial service providers (Dunham ; Dunham and Foster ; Goodstein and Rhine ; Jorgensen and Akee ), which are often spatially patterned after neighborhoods' and communities' racial and economic makeup. Neighborhoods of color tend to have lower average densities of bank and credit union branches than their White counterparts, net of socioeconomic controls (Dahl and Franke ; Ergungor ; Goodstein and Rhine ; Graves ; Hegerty ; Jorgensen and Akee ; Morgan, Pinkovskiy, and Yang ; Tranfaglia ; Smith, Smith, and Wackes ; Richardson et al ).…”

“…Manifestations of these variations include the densities and proximities of banks, credit unions, and alternative financial service providers (Dunham ; Dunham and Foster ; Goodstein and Rhine ; Jorgensen and Akee ), which are often spatially patterned after neighborhoods' and communities' racial and economic makeup. Neighborhoods of color tend to have lower average densities of bank and credit union branches than their White counterparts, net of socioeconomic controls (Dahl and Franke ; Ergungor ; Goodstein and Rhine ; Graves ; Hegerty ; Jorgensen and Akee ; Morgan, Pinkovskiy, and Yang ; Tranfaglia ; Smith, Smith, and Wackes ; Richardson et al ). For instance, census block groups in the 1990s with higher percentages of Black residents had significantly fewer bank branches than the county average in Cook County, Illinois, which includes the city of Chicago (Graves ).…”

“…Bank branches are also located disproportionately farther away from neighborhoods of color, potentially increasing the costs for residents to access and use financial services in terms of transportation and time. Whereas the average individual travels a median distance of only 2 miles to the bank branch where they opened their checking account (Amel, Kennickell, and Moore ; Goodstein and Rhine ), residents of Native tribal communities travel a median distance of 8 miles to the nearest bank branch (Jorgensen and Akee ). This distance is four times farther than the national median and nearly consistent with the 10‐mile benchmark used to define a “banking desert” (Morgan, Pinkovskiy, and Yang ), a term introduced in the late 1990s referring to areas abandoned by banks and credit unions (Dahl and Franke ; Hegerty ).…”

Use of Bank and Nonbank Financial Services: Financial Decision Making by Immigrants and Native Born

“…See Birkenmaier and Fu (), Prager (), Goodstein and Rhine (), Gross et al (), Smith, Smith, and Wackes (), Rhine and Greene (), Barr (), Dunham (), and FiSCA (n.d.).…”