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This article was written by the Consumers Union Southwest Regional Office.
Consumers Union maps confirm previous findings about the demographic characteristics of those who borrow from fringe lenders. Each map identifies the location of finance companies and pawn shops using addresses provided by the Texas Office of Consumer Credit Commissioner. The maps compare these locations to the median household income of each urban county ($27,000 for Harris County, $26,000 for Travis County and $31,000 for Dallas County) and to the minority population.
According to the maps, a majority of the fringe lenders in three Texas cities locate in neighborhoods where households have below median incomes. Clustering together, they dominate certain commercial districts in low income areas and portions of downtown.
The Consumers Union maps suggest a relationship between race and fringe lending that echoes the findings of a 1992 national survey sponsored by the Federal Reserve (see main report). In Harris County, for example, most finance companies and pawnshops locate in neighborhoods in which minorities comprise a majority of the population. A variation of this same pattern exists in both Austin and Dallas. In Austin's Travis County, pawnshops often locate in minority neighborhoods while most finance companies cluster in the areas surrounding minority neighborhoods. In Dallas County, most pawnshops are in minority neighborhoods, while about half of all finance companies are in minority neighborhoods and half are in areas surrounding minority neighborhoods.
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