Racial Disparities in Financial Complaints and the Role of Corporate Social Attitudes

105 Pages Posted: 1 Nov 2021 Last revised: 11 Nov 2024

See all articles by Rachel M. Hayes

Rachel M. Hayes

University of Utah - David Eccles School of Business

Feng Jiang

University at Buffalo - School of Management

Yihui Pan

University of Utah - Department of Finance

Huayi Tang

University of Utah - David Eccles School of Business

Date Written: October 18, 2021

Abstract

Using consumer complaints filed with the Consumer Financial Protection Bureau as a measure for the quality of financial products and services, we present evidence of racial disparities in the service quality received by consumers. Consumers in high minority communities file more complaints than those in low minority communities, and the racial gap in financial complaints increased by more than 60% during the COVID-19 pandemic. Using a triple-difference approach, we establish the role of corporate social attitudes, reflected in, for example, inclusive promotion practices and diversity in leadership, in mitigating the complaint racial gap and its pandemic-period increase. Our results shed light on how inclusive corporate culture filters through an organization to benefit minority communities, and underscore the effect of corporate social attitudes on important stakeholder outcomes.

Keywords: racial disparity; corporate culture; corporate social responsibility; COVID; CFPB

JEL Classification: M14; G21; G23; G50; J15

Suggested Citation

Hayes, Rachel M. and Jiang, Feng and Pan, Yihui and Tang, Huayi, Racial Disparities in Financial Complaints and the Role of Corporate Social Attitudes (October 18, 2021). Available at SSRN: https://ssrn.com/abstract=3952885 or http://dx.doi.org/10.2139/ssrn.3952885

Rachel M. Hayes

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

Feng Jiang

University at Buffalo - School of Management ( email )

344 Jacobs Management Center
Buffalo, NY 14260
United States
716-645-3225 (Phone)

Yihui Pan (Contact Author)

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

Huayi Tang

University of Utah - David Eccles School of Business ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

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