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“It Depends”: How Discretion in the Financial System Contributes to Exclusion and Marginalization

The project: Access to banking and credit are important tools in overcoming poverty. But studies have shown that bias plays a role in the banking system, which may impact consumers most in need of financial services. This project gathered in-depth, qualitative information about the impact of decision-making among front-line financial service employees. Employees that regularly interact with consumers in financial service institutions make many discretionary decisions, such as charging overdraft fees, which have been shown to be biased. In turn, biased decisions can further marginalize low-income consumers and consumers of color and mitigate the benefits of anti-poverty programs. Ensuring that consumers can continue to engage with and trust their financial institutions is paramount in preventing and alleviating poverty.

The process: The researchers interviewed 36 frontline financial service employees in Southeast Michigan, focusing on a daily narrative of experience and decision-making. The in-depth interviews were recorded and transcribed for thematic analysis to reveal patterns. 

Results: The study revealed frontline financial service employees follow highly predictable, patterned narratives around banks’ sales culture, social biases and moral judgments, and exclusion and marginalization. Frontline financial service employees use these narratives to deem customers worthy of responsible banking in ways that advantage wealthier and White customers and exclude and marginalize Black, brown, and poor White customers. While most banks appear to offer standardized products and services, class- and race-based stratification in the delivery of these financial products and services enables customers’ ongoing exclusion, exploitation, and marginalization


Terri Friedline, U-M School of Social Work