Financial Discrimination: Consumer Perceptions and Reactions

Miranda Reiter, Di Qing, Kenneth White () and Morgen Nations
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Miranda Reiter: School of Financial Planning, Texas Tech University, 1301 Akron Ave, Box 41210, Lubbock, TX 79409, USA
Di Qing: Department of Consumer and Design Sciences, Auburn University, Auburn, AL 36849, USA
Kenneth White: Norton School of Human Ecology, University of Arizona, 650 N Park Ave, Tucson, AZ 85721, USA
Morgen Nations: School of Financial Planning, Texas Tech University, 1301 Akron Ave, Box 41210, Lubbock, TX 79409, USA

IJFS, 2025, vol. 13, issue 3, 1-26

Abstract: Access to traditional financial institutions plays a key role in enhancing positive financial outcomes. However, some consumers within the United States experience discrimination from these same institutions. In particular, discrimination based on race and gender has historically been tied to outcomes such as lower service quality and a lack of access to credit. While the previous literature has discussed some of the discriminatory practices that these groups have faced, there is a lack of research on how these groups respond to discrimination from financial institutions. Through a series of logistic regressions, the authors analyzed how race, ethnicity, and gender are related to reporting experiences of discrimination. The authors then explored how consumers react to discrimination by looking at five reported reactions. Primary results show that Black consumers were more likely than most other racial groups to experience financial discrimination. Additionally, women were less likely than men to report financial discrimination. Race was shown to be a significant factor in four of the five reactions to discrimination, while gender was a factor in two of the reactions. The findings further show that after experiencing financial discrimination, most individuals turned to non-traditional financial services as a direct result of the bias or racism.

Keywords: financial institutions; bias; racism; consumer vulnerability (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
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