Selected Articles in Progress

The Role of Race, Class, and the Density of High-Cost Financial Markets

2024 Best Paper in Urban Entrepreneurship Award

Abstract: Payday lenders and check cashers have garnered attention because they are more expensive than traditional banking, target the poor, credit-poor, and racial minorities. Research has made clear that neighborhood conditions affect racial inequality, although it is unclear the contributions of high-cost financial market density. Developing a new racialized political economy perspective this paper examines if high-cost financial market density varies across neighborhoods, leveraging a dataset of every financial provider in the United States from 2011-2018. Analyses show that the density of fringe economy services is lower in communities with higher incomes. However, high-income neighborhoods with larger percentages of Black residents exhibited more fringe economy service locations compared to similarly high-income neighborhoods with a larger percentage of White residents. Exposure to dense high-cost financial market density, regardless of income, is heightened for Black people in the U.S; likely further restricting Black economic life. Under review.

Public Money, Private Politics: Race, Payday Lenders, and the CARES Act

Research funded by the Russell Sage Foundation

Abstract:The political processes surrounding the Coronavirus Aid, Relief, and Economic Security (CARES) Act offer valuable lessons about race and politics in the United States. The CARES Act simultaneously provided 1) unconditional cash transfers totaling $850 billion to address severe, widespread financial hardship of U.S. taxpayers and 2) over $580 million from the Paycheck Protection Program (PPP) to financial actors such as payday lenders and debt collectors. These financial actors are notorious for predatory practices towards the poor, credit-poor, and racial minorities, underscoring a critical tension between public money and private financial actors. An analysis of how these predatory financial actors, who initially were not eligible for the PPP loans, end up being eligible for funds reveals how private financial actor interests prevail. Thus, these politics created a moment of unprecedented government support for 1) everyday people and 2) a thriving fringe economy of predatory financial actors whose business model profits from people’s financial vulnerability. Ultimately, this analysis points to how the policy changed, even as a loud minority of public actors articulated concerns for vulnerable populations. It shows how these financial providers, and their congressional supporters emphasized the importance of their eligibility. Specifically, the financial providers characterize themselves as “financial first responders in times of crisis” as they advocate for their eligibility for PPP loans. By examining and making such processes visible, this paper highlights the limits and possibilities of the interplay of public and private actors in securing societal well-being. In preparation for submission.

Race, Money, and Place: Consequences of Fringe Economy Use for Political Engagement

Abstract: Combining interview data and statistical methods, this study identifies a financial channel pivotal to understanding the relationship between race, income, and political engagement: the fringe economy. The fringe economy refers to financial services, such as payday loans and check-cashing, that charge high interest rates or fees to people with limited access to traditional financial services (e.g., banks). Frequent use of fringe economy services increases levels of political engagement among racial and ethnic minorities, but differing fringe economy state regulations shape the behavior of these private actors that creates differential access to these particular kinds of services, which dampens participation. This finding suggests that the frequency of using costlier resources provided in the fringe economy decreases the relationship between the fringe economy and political engagement. This research highlights that resource provision can be a worthwhile policy pursuit for increasing minority involvement in politics but only if there are better means of resource provision, with fewer long-term problems. These findings present a micro-level account of the influence of financial insecurity, private businesses, and political capacity, one that holds implications for scholarship and public policy on the persistence of racial and participatory inequality. In preparation for submission.