A report by the National Community Reinvestment Coalition (NCRC), Bank Branch Closures from 2008-2016: Unequal Impact in America’s Heartland, finds that bank closures since the Great Recession have diminished access to financial services in both urban and rural areas. Lack of access to financial services can increase residents’ reliance on expensive alternative financial products and services, like payday loans and check-cashing services, and impede small business lending and growth.
Using geospatial analysis of bank branch data collected by the Federal Deposit Insurance Corporation (FDIC), the authors examined the distribution of bank branch closures between 2008 and 2016. Their analysis showed that:
- 6,008 bank branches were lost between 2008 and 2016, accounting for 6% of all bank branches nationally.
- Eighty-two percent of losses were in urban areas and 18% were in rural areas.
- The Baltimore, Chicago, Philadelphia, Las Vegas, and Detroit metropolitan areas lost 12 to 25% of their branches.
Branch closures in rural areas may result in greater challenges to bank access than closures in urban areas. The report analyzed the emergence of “banking deserts,” which are populated areas with no banks within 10 miles. Rural areas are more at-risk for banking deserts. Six hundred and fifty rural banking deserts exist across the country, and between 2008 and 2016, 86 new rural banking deserts appeared. Rural census tracts with a banking desert had a higher percentage of minorities, including Hispanics and Native Americans, than non-desert rural tracts. Rural census tracts with a banking desert also had higher poverty rates, higher housing vacancy rates, and lower home values than non-desert rural tracts.
Bank Branch Closures from 2008-2016: Unequal Impact in America’s Heartland is available at: http://bit.ly/2r4EuvR
Explore data from the report at: http://bit.ly/2qwCiB5