In a data snapshot published Tuesday, the CFPB highlighted some of the unique challenges facing rural Americans, including an increased reliance on physical bank branches, given the limited access to high-speed internet and online banking options in many of these communities. The CFPB noted that rural customers visit bank tellers\u2014often at community banks\u2014\u201cat nearly double the rate of urban and suburban customers,\u201d according to a 2020 FDIC analysis.<\/p>\n
\u201cCommunity banks are three times more likely to locate their offices in a non-metro area, and community banks hold the majority of banking deposits in U.S. rural and micropolitan counties,\u201d the CFPB said. \u201cAccording to the FDIC, in 2012 there were more than 600 counties\u2014or almost one out of every five U.S. counties\u2014that had no other physical banking offices except those operated by community banks.\u201d<\/p>\n
The bureau noted that bank consolidations have contributed to the expansion of so-called \u201crural banking deserts,\u201d which the Federal Reserve Bank of St. Louis defines as \u201ccensus tracts in which there are no branches within a 10-mile radius from the tracts\u2019 centers.\u201d The CFPB report pointed out that \u201clack of broadband access is a major limiting factor\u201d in filling the banking needs of these communities. \u201cOnly 75.6% of rural people had access to a smartphone compared to 86.2% in urban areas and 88.4% in suburban areas and only 68 percent of rural households had access to the internet in their home, which was a much lower rate than urban households (79.5%) and suburban households (84.5%).\u201d<\/p>\n
The American Bankers Association\u2019s 2021 Bank Access Report noted that most \u201cbanking deserts\u201d are in actual deserts, with the median bank desert containing just 7.6 people per square mile. \u201cFor perspective, about a quarter of banking deserts lie in census tracts that are geographically larger than the state of Rhode Island yet contain a median of just 3,000 people,\u201d the ABA report said. In the average rural low-income Census tract, a consumer is within a 10-mile commuting distance of nine bank branches, compared with four for moderate-income rural tracts, six for middle-income tracts and 10 for upper-income tracts.<\/p>\n