Rural America seeing 'considerable decline' in bank branches

Americans in rural areas of the country are watching local bank branches disappear before their eyes.

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A majority of counties lost bank branches between 2012 and 2017, according to new research from the Federal Reserve, including a “considerable” decline (of more than 40 percent) in branches within some rural counties.

Over the same time period, there was also a “substantial increase” in the number of communities that did not have a bank headquarters – the majority of which, again, were rural.

“More than 100 banking markets went from containing the headquarters of at least one bank to containing no bank’s headquarters. Almost all of these markets with no bank headquarters are rural,” researchers wrote.

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The affected rural communities tended to be home to a higher proportion of less educated, poorer and minority residents.

And while consumers and small business owners said they have found local of technological substitutes for some – but not all – services, those alternatives tend to cost more and are less convenient.

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Retail branches, for example, were important tools for resolving problems, submitting loan applications, deposits and withdrawals, the study found. Additionally, small business owners prefer to use local banks to access financial services.

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As previously reported by FOX Business, Democratic New York Rep. Alexandria Ocasio-Cortez and independent Vermont Sen. Bernie Sanders have floated a proposal known as postal banking to provide banking opportunities for low-income communities.

According to the lawmakers, 63 million Americans are underbanked and 90 percent of zip codes without a bank or credit institution are in rural areas.

Some of the proposed services a postal banking system could offer include low-interest loans, checking and savings accounts, debit cards, check cashing, bill payment, ATM services, online banking services and electronic money transfers.

Rural communities don’t just lack access to bank branches, however.

According to a report by the Federal Communications Commission, 80 percent of the 24 million American households that do not have reliable access to affordable high-speed Internet live in rural areas. The U.S. Department of Agriculture is currently working to build out telecommunications infrastructure in less densely populated areas.

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