Neighborhood Racial Characteristics, Credit History, and Bankcard Credit in Indian Country

We examine whether concerns about lenders’ discrimination based on community racial characteristics can be empirically substantiated in the context of neighborhoods on and near American Indian reservations. Drawing on a large-scale dataset consisting of individual-level credit bureau records and utilizing approaches that aim to isolate supply from demand considerations, we find that residing in a predominantly American Indian neighborhood is ceteris paribus associated with lower awarded bankcard credit limits than residing in a neighborhood where the share of American Indian residents is low. We further find that consumer’s credit history is a robust and quantitatively more important predictor of awarded bankcard credit limits than racial composition of the consumer's neighborhood, and that the awarded bankcard credit limits do not depend on the consumer's location vis-à-vis a reservation.