2016/12/29 by Jacob Faber · 1 citation
Economics, Econometrics and Finance · Social Sciences · #Housing, Finance, and Neoliberalism #Housing Market and Economics #Urban, Neighborhood, and Segregation Studies
paper · doi:10.1177/1078087416684037
openalex publication_date 2016/12/29 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/30
The Great Recession was a consequence of widening inequality and the growth of a tiered financial services system, in which the rich and the poor have access to vastly different tools for wealth accumulation. The spatial organization of these dynamics created neighborhoods vulnerable to predation on behalf of subprime lenders and other fringe service providers. This project seeks to understand the reproduction of institutional marginalization in consumer finance. Results show that racially isolated neighborhoods in New York City, where subprime lending and foreclosures were common, were uniquely vulnerable during the Great Recession and were communities where check cashing outlets (CCOs) sprouted, highlighting a mechanism for the reproduction of inequality over time. CCOs cost more per transaction than a checking account—potentially totaling tens of thousands of dollars over a career. The link between widening financial services inequality and the recession’s consequences provides a strong impetus for safety net and community investment policies.