Date of Award
5-2026
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Economics
Committee Chair/Advisor
Howard Bodenhorn
Committee Member
Matthew S. Lewis
Committee Member
Molly Espey
Committee Member
Yichen Christy Zhou
Abstract
In my dissertation, I study credit access in diverse urban communities, the role of the financial institutions that serve them, such as Minority Depository Institutions (MDIs) and non-MDIs. The first chapter studies the effect of bank branch closures (both MDIs and non-MDIs) on credit access in these diverse urban communities. MDIs are US community banks that are owned and operated by minority populations, such as Black-owned, Asian-owned, Hispanic-owned banks or Native-owned banks. The second chapter studies the proximity of Black-owned banks to historically segregated urban neighborhoods. More specifically I study whether surviving Black-owned banks are more likely to be present in historically "redlined" urban areas, that were also heavily populated by minorities in the past. I also investigate the roles these banks currently serve within their communities.
In the first chapter, I investigate the role of urban community banks, MDIs in promoting credit access in underserved, diverse urban neighborhoods. I construct a panel dataset, employ an event-study design and treat MDI and non-MDI branch closures within census tracts as interventions. The effects are largely minimal, with a few notable exceptions: 1) Asian MDI branch closures lower mortgage originations within the Asian community, 2) Hispanic MDI branch closures lower small business loan (SBL) originations to small firms, while, 3) non-MDI branch closures lower mortgage originations within Black communities served by Black MDIs. Surprisingly, non-MDI branch closures precede an increase in total SBL originations. Using lender-level Herfindahl–Hirschman index, I show branch closures do not lead to more concentrated lending markets, rather encourage entry of non-local and non-bank lenders. The results highlight the evolving and decreasing role of physical bank branches and relationship banking in an increasingly digital banking landscape.
In the second chapter, I study the present-day proximity of MDIs to historically segregated urban neighborhoods. Using a Poisson Generalized Estimating Equation (GEE) framework, I investigate whether MDIs are more likely to exist in "redlined" census tracts based on the Home Owners' Loan Corporation's (HOLC) "residential security maps" in 1930s. I find the expected number of Black MDIs increase 10%, whereas those of non-MDI banks decrease 1% for each 10% increase in the tract's redlined area. I also find Asian MDIs and Hispanic MDIs locations are negatively correlated with the tract's redlined areas. Rather, their expected numbers increase 34% and 13% for each 10% increase in Asian language and Spanish speakers at the tract level respectively. The results show how historical federal policies continue to influence the modern banking landscape and how Black-owned banks co-exist with larger banks in their local markets.
Recommended Citation
Razzak, Noara, "Credit Accessibility in Diverse Urban Communities and the Dynamics of Their Lending Markets: The Case of Minority Depository Institutions" (2026). All Dissertations. 4250.
https://open.clemson.edu/all_dissertations/4250