2013 Theses Master's

Over-Leveraged: An Analysis of the Social Impact of Fringe Banking Establishments on Suicide Rates in New York City

Welton, Sarah

Non-bank institutions have become a more prominent player in the personal credit market in recent years, as the declining competitiveness of traditional banking has created incentives for non-traditional lenders to offer riskier loans to less credit-worthy borrowers. Through predatory lending practices, which target financially distressed individuals, these loans may have played a role in the increased suicide rate over the last several years. Consequently, the hypothesis of this study is as the prevalence of predatory lending establishments within a community increases, the suicide rate within that neighborhood also increases, as a result. The overall aim of this study is to test a causal model, which might explain if the increased rate of suicide, suicide ideation or attempts during the most recent economic downturn was exacerbated by an increase in fringe bank lending, specifically in neighborhoods in New York City. The model tests the hypothesis that some individuals, due to their community of residence, and exacerbated by their financially precarious situations, are more often exposed to predatory lenders. And as a result of the deceptive loan terms offered by these conveniently located lenders, these individuals may often experience more objective, financial stress, as well as more perceived, subjective stressors, putting them at an increased risk of suicide. The specific aims are: 1. To examine the prevalence of suicide, suicide ideation or attempts among communities within New York City. 2. To determine the prevalence of fringe bank loan co-locating within the neighborhoods that experience higher rates of suicide.