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Working Paper
Cost of Banking for LMI and Minority Communities
Bank accounts are critical for participation in the modern economy. However, these accounts frequently require maintenance fees and incur overdraft charges. We assess whether minimum account balances to avoid fees, account maintenance fee amounts, and non-sufficient funds charges are systematically different in LMI and majority-minority communities, and find that they are generally higher. For example, the minimum account balance to avoid fees in a non-interest checking account is about $50 higher in LMI Census tracts than in higher income tracts, and $75 higher in majority-minority tracts. ...
Working Paper
Cost of Banking for LMI and Minority Communities
We test whether minimum account balances to avoid fees, maintenance fee amounts, and nonsufficient funds charges are systematically different in LMI and majority-minority communities relative to other communities and find that they are generally higher. The minimum account balance to avoid fees on a noninterest checking account is about $45 higher on average in LMI Census tracts than in higher income tracts, and more than $70 higher on average in majority-minority tracts than in majority-white tracts. We investigate potential sources of these differences such as bank business models, ...