Bank Branch Closings Weigh on Rural Communities, Fed Finds

New research from the Federal Reserve found a majority of U.S. counties lost bank branches in recent years, and rural communities with poorer residents or large minority populations have been particularly hard hit. Fifty-one percent of the 3,114 counties in the United States saw net declines in the number of bank branches between 2012 and 2017, said the report released Monday, a result of industry consolidation in the wake of the financial crisis. A total of 794 rural counties lost a combined 1,553 bank branches over the five-year period, representing a decline of 14 percent in the number of institutions. “Some consumer segments appear to have been left without sufficient, convenient, and low-cost access to the financial services they need to manage their financial lives,” the Fed researchers wrote. The Fed researchers pointed out that loan interest rates increase as the distance between a business and the local branch of its lender grows.

Wall Street Journal (11/25/19) Yuka Hayashi
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