Living outside the Financial Mainstream: Alternative Financial Service Use among People with Disabilities

ABSTRACT

This study explored factors related to the use of alternative financial services (i.e., payday loans, prepaid debit cards, pawn shops, auto title lenders, and rent-to-own stores) among a nationally representative sample of U.S. adults (N1 = 27,564), and a sub-sample of people with disabilities (PWDs) (N2 = 1,232). Using secondary data from the Financial Industry Regulation Authority’s 2015 National Financial Capabilities Study (NFCS), two separate logistic regression models revealed several significant individual and institutional level factors that predicted alternative financial service use among both samples. The full-sample model was found to be significant, χ²(10) = 3,917.22, p < .001, as was the sub-sample model, χ²(10) = 193.43, p < .001. Additionally, it was found that PWDs were twice as likely to use alterative financial services than people without disabilities. Further research is recommended to empirically explore the consequences of alternative financial service use among PWDs. Implications of this study are targeted toward social work researchers, policy makers, and human service practitioners.

KEYWORDS:

• People with disabilities
• poverty
• alternative financial services
• financial capability