Journal of Financial Intermediation Vol. 63 2025
Do minority banks matter?
Abstract
This paper estimates the elasticity of minority credit supply to deposit shares of Minority Depository Institutions (MDIs). I use within-county tract-level variation in exposure to the Community Reinvestment Act and show that if a census tract loses MDI presence following a merger between an MDI bank and a community bank, its minority mortgage credit declines by 40%. These effects are driven by the loss of operationally efficient MDIs, and about half of the overall impact is attributable to the loss of mission alone. A 1% increase in county market shares of such tracts leads to roughly a 3% decrease in county-level minority homeownership.
- DOI
- 10.1016/j.jfi.2025.101163
- Volume
- 63
- Pages
- 101163
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib