Washington D.C. — The National Bankers Association today announced the release of its latest research report, Credit in Context: Profiling Alternative Lending Use in MDI Communities. The report builds on NBA’s ongoing partnership with TransUnion to analyze credit use in communities served by Minority Depository Institutions (MDIs).
MDIs are mission-driven banks that locate in and serve minority and low-to-moderate income communities across the country. With more than 1,500 branches in nearly all 50 states, MDIs are uniquely positioned to provide affordable, responsible financial products in communities that often face limited access to mainstream credit.
Previous NBA research found that communities with at least one MDI branch present demonstrate stronger credit health—including higher credit scores, more available credit, lower utilization, and fewer delinquencies—relative to demographically similar communities without an MDI presence.
This new report extends that analysis to include both mainstream and alternative credit use. It provides the first comprehensive profile of the typical alternative credit user in MDI communities and examines how MDI presence influences access to safer, more sustainable credit pathways.
Key findings include:
Heterogeneity in credit health: There are meaningful differences both within and across communities served by MDIs.
Alternative credit users are highly constrained: These borrowers typically have very poor credit scores and limited access to mainstream financial products.
MDIs reduce reliance on alternative credit: MDI presence is associated with modest declines in alternative credit inquiries, particularly in majority-minority neighborhoods.
Borrowing is need-driven: The average alternative credit user borrows out of necessity, not preference.
Alternative credit products—including payday loans, auto-title loans, and other high-cost options—have long been recognized as costly substitutes that can drain resources and perpetuate cycles of debt. While proponents argue they provide access where traditional products do not, mainstream bank offerings—particularly those provided by MDIs—offer stronger consumer protections and a pathway to financial health.
“MDIs play a critical role as community anchors, recirculating funds, reinvesting in local development, and offering financial products that build resilience and wealth,” said Nicole Elam, President and CEO of the National Bankers Association. “This report underscores the importance of supporting and strengthening MDIs so they can continue to provide safe, affordable alternatives in communities too often targeted by predatory financial products.”
The full report, Credit in Context: Profiling Alternative Lending Use in MDI Communities, is available at https://www.nationalbankers.org/research-2025-credit-in-context.
About the National Bankers AssociationFounded in 1927, the National Bankers Association (NBA) is the leading voice for minority depository institutions, advocating for mission-driven banks that serve low- to moderate-income and underserved communities. Representing community banks across 43 states and territories, the Association promotes economic empowerment and financial inclusion. Learn more at www.nationalbankers.org.