Use of Bank and Nonbank Financial Services: Financial Decision Making by Immigrants and Native Born

Abstract

This study examines the joint decisions made by immigrant and native‐born families about whether or not to have a bank account and to use nonbank financial services (NBFS). Immigrant families, especially those from Mexico or other Latin American countries, have a higher probability of using NBFS than native‐born families, regardless of their banking status. Residing in concentrated ethnic enclaves or being a US citizen, however, lowers the probability of using these services. Similarly, native‐born Black and Hispanic families are more likely to use these services than native‐born White families. Our findings support continued efforts to encourage mainstream participation among immigrant and minority native‐born families. Having access to mainstream financial services can help these families establish financial stability and economic mobility. To our knowledge, this is the first comprehensive study of immigrant families' joint decision making about using NBFS and bank account ownership.