Rural communities are facing increasing limited access to bank branches, according to a new report issued by the National Community Reinvestment Coalition (NCRC).
With more than 6,000 bank branches closed since the 2008 financial crisis, overall access to branch offices has declined. However, the NCRC’s “Bank Branch Closures from 2008-2016: Unequal Impact in America’s Heartland” details what it describes as 86 new “banking deserts” that have appeared in rural areas since 2008, with some rural communities left with only one or two bank branches. Furthermore, 25 percent of all rural bank closures were in majority-minority census tracts, with Hispanic and Native American communities being impacted the hardest.
“The rise of banking deserts in America does not bode well for our national economy,” said NCRC’s President and CEO John Taylor. “Cities and towns and rural communities weaken as branches close. A mobile phone is no substitute for a full-service bank branch. You may be able to deposit a check with a phone, but try developing an ongoing relationship with that Internet branch in order to procure a small business loan or a mortgage or even different types of consumer credit. Bank branches are there to manage a community’s wealth as well as to reward shareholders of the bank. Yet those branches are often closed in order to create more profitability for the bank, even when those branches are viable, without consideration of what happens to people and businesses in those communities.”