Payday lenders and economically distressed communities: A spatial analysis of financial predation

Abstract

The payday lending industry has grown considerably in recent years, reflecting both widespread economic insecurity and market neglect by the traditional banking sector. Outlets are now commonplace in many communities across America. Accused by many of predatory practices, payday lenders can be viewed as financial hazards in already economically distressed communities. Using a Geographic Information System (GIS) and associated statistical analyses, this paper examines the social ecology of payday lending along the Front Range communities of Colorado. Comparison of means and logistic regression results reveal how communities' composition by class, occupation, race/ethnicity, nativity, age, and military affiliation affect their likelihood of hosting payday lending.