Landscapes of financial exclusion: Alternative financial service providers and the dual financial service delivery system

This research addresses equity in geographic access to financial services. As financial products and services continue to become more accessible and affordable, many low- to moderate-income Americans remain unbanked and underbanked, relying instead upon informal, alternative financial service providers, including check cashing outlets and payday lenders. While geographic access to affordable financial products and services assists in the successful asset building strategies of economically vulnerable households, concerns that access to financial services is uneven persist. This article uses geographic information systems and spatial binary logistic regression analysis to test the hypothesis that sociodemographic characteristics and mortgage lending variables have a predictive relationship on the presence of financial deserts-census tracts where check cashing outlets are more prevalent than banks-in southeastern Pennsylvania. Results of comparison of means and regression analysis reveal that these tracts are associated with higher than average population density, lower levels of median household income, a higher proportion of Black and Latinx residents, and higher levels of mortgage application denial. This article contributes to the ongoing debate over the emergence of a two-tiered or dual financial service delivery system, whereby financial products and services are bifurcated based on socioeconomic status and geography.