Federal Reserve Says Bank Closures Devastating Rural Communities

WASHINGTON, DC – According to new research from the Federal Reserve, rural communities have been disproportionately affected by bank consolidation and closures. Between 2012 and 2017, the number of bank branches declined by 7 percent nationwide. Urban communities lost 5,756 branches, while rural communities lost 1,533 branches. The Fed found that more than 100 banking markets went from having at least one local bank to having none. While urban communities lost more total branches than rural areas, the survey noted that the effect of branch closures tends to be magnified in rural areas. Of the 44 counties the Fed considered “deeply affected” by branch closures, 89 percent were located in rural counties. The effects of losing a bank or branch are not limited to financial services alone. Community members say the rural areas lose an important source of financial advice, civic leadership, personal banking relationships, and a source of community reinvestment.