Access to banking and credit are the kind of mundane concerns that exist in the background of our everyday lives, right up until the moments when we really need them, like when we need a mortgage to buy a house or a short-term loan to cover the next week’s expenses. Unfortunately, like so many other aspects of life in America, access to banking and sustainable sources of credit is geographically uneven, split across lines of class and race with wealthier and whiter communities served by institutions that help them build long-term wealth, while poorer communities and communities of color are served primarily by more predatory alternatives. Atlanta is no exception here, and as the city with the largest racial income inequality in the country, and a similarly large racial wealth gap, accurately measuring whose neighborhoods and communities have reliable access to financial services is an important step in creating a more equitable city for all.
Banking and lending inequalities are not a new concern here in Atlanta. Indeed, it was AJC journalist Bill Dedman’s Pulitzer Prize-winning series “The Color of Money” in 1988 that documented the extent of racist mortgage lending in Atlanta and led to significant reforms in mortgage lending around the country. However, lending requirements are only one part of banking access. Just as important is the issue of where banks are actually located. And as recent work from the Atlanta Regional Commission has shown, bank branch closures since the Great Recession have created a number of so-called “banking deserts” across the metro where communities are spatially isolated from banks. However, focusing on banking deserts only looks at where banks aren’t located. It doesn’t tell us what areas of the metro have lots of banks (and thus many options) and those that have only a few, nor does it show us where other potentially predatory financial services are located, and how the two might be related.
In a newly published article with Taylor Shelton in the journal Environment and Planning A: Economy and Space, we map the differences in where conventional banks and alternative financial services (or AFS) are located across the Atlanta metro. Starting from the ARC’s 10-county definition of the Atlanta metro, we identify a total of 972 banks and 492 AFS, including everything from check cashers and pawnshops to payday lenders and title loan offices. We were particularly interested in these AFS because many researchers and activists argue that they create barriers that prevent economically vulnerable communities from building healthy savings and credit opportunities while targeting them with predatory, high-interest loans that lock people into debt spirals. So, given the fact that there are almost twice as many banks as AFS in the metro area, we might assume that Atlanta is doing pretty well on the financial opportunity front, but the geography of these services tells a very different story.
The map above shows us the difference between conventional bank and AFS accessibility around the Atlanta metro. Blue areas are served predominantly by banks, while red areas have more AFS. Areas in the darkest colors, like central Fulton County and along the Buford Highway/I-85 corridor to the city’s northeast, have large amounts of both, and areas in gray have very few of either service. The northern portion of the metro area clearly has better access to conventional banks, while the southern-central areas are overwhelmingly served by predatory alternatives, and a number of places in the outer reaches of the metro area have very few financial services of any kind. The map below shows this same thing in a more straightforward way by comparing an area’s ratio of bank-to-AFS to the ratio for the whole metro, or what’s known as an odds ratio. Areas in pink have more banks than the metro average, while areas in green have more AFS than average. In total, these maps complicate the somewhat simplistic idea of banking deserts, instead showing that even in places where there are banks, the banking and finance industry provides fundamentally unequal services that tend towards the more predatory end of the spectrum.
Long-time readers of this blog – or even those of you with just a passing familiarity with Atlanta – will have noticed some clear demographic differences between these different geographic areas served by banks and those served by AFS. Unsurprisingly, we see a consistent pattern where wealthier, whiter areas have higher access to banks and lower access to AFS, and poorer, predominantly Black areas have relatively little access to banks and higher concentrations of AFS. To put it somewhat differently, across the wealthier and whiter areas in the northern part of the metro, people have abundant access to capital. But in the predominantly Black, southern part of the metro, capital has access to people. While living near different kinds of financial services certainly doesn’t necessarily mean that they are equally available or harmful to everyone, we can clearly see that exclusion from (or predatory inclusion into) this system follows the same time-worn patterns of racial and class exclusion we’ve come to expect here in Atlanta and across the country.
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