(Epoch Times) Americans in rural parts of the country have been hit hard by bank closures as they lose access to services for which they struggle to find substitutes, raising their costs and contributing to their economic malaise, according to a newly released study.
Researchers at the Federal Reserve said in a new study (pdf) that, as post-crisis banking industry consolidation brings branch closures, “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.”
People hit the hardest by the trend—which has seen 51 percent of America’s 3,114 counties lose bank branches—are those on low incomes and lacking reliable transportation, as well as small business owners and seniors.
One of the ways people adapt to bank closures is by using online financial services. The authors note, however, that the shift to digital channels is slow for certain groups: seniors, the poor, the less educated, and those who live in rural areas.
But even people who have moved to online banking to meet some of their financial needs—mainly for basic functions like checking balances—reported that they rely on branches for deposit and withdrawal transactions and for resolving problems.
“Community banks are the lifeblood of rural America and the heart and soul of our small businesses and communities,” said Bret Afdahl, Chairman of the Conference of State Bank Supervisors.
Despite the benefit of local bank branches for communities, the trend for closures is likely to continue.