Working Paper
Bank Branch Presence and Access to Credit in Low-to-Moderate Income Neighborhoods
Banks specialize in lending to informationally opaque borrowers by collecting soft information about them. Some researchers claim that this process requires a physical presence in the market to lower information collection costs. The author provides evidence in support of this argument in the mortgage market for low-income borrowers. Mortgage originations increase and interest spreads decline when there is a bank branch located in a low-to-moderate income neighborhood.
Suggested Citation
Ergungor, O. Emre. 2006. “Bank Branch Presence and Access to Credit in Low-to-Moderate Income Neighborhoods.” Federal Reserve Bank of Cleveland, Working Paper No. 06-16. https://doi.org/10.26509/frbc-wp-200616
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