Home > Finance News > 2009-33: Determinants of the Locations of Payday Lenders, Pawnshops and Check-Cashing Outlets

2009-33: Determinants of the Locations of Payday Lenders, Pawnshops and Check-Cashing Outlets

August 20th, 2009

A large and growing number of low-to-moderate income U.S. households rely upon alternative financial service providers (AFSPs) for a variety of credit products and transaction services, including payday loans, pawn loans, automobile title loans, tax refund anticipation loans and check-cashing services. The rapid growth of this segment of the financial services industry over the past decade has been quite controversial. One aspect of the controversy involves the location decisions of AFSPs. This study examines the determinants of the locations of three types of AFSPs–payday lenders, pawnshops, and check-cashing outlets. Using county-level data for the entire country, I find that the number of AFSP outlets per capita is significantly related to demographic characteristics<br>of the county population (e.g., racial/ethnic compositio

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