CFPB reports on rural banking deserts

Federal Issues CFPB Consumer Finance Rural Communities

On April 19, the CFPB released a report regarding the challenges faced by Americans in rural communities. According to the report, in 2012, over 600 counties “had no other physical banking offices except those operated by community banks.” The report also noted that bank consolidation has contributed to the expansion of “rural banking deserts,” which the Federal Reserve Bank of St. Louis defines as “census tracts in which there are no branches within a 10-mile radius from the tracts’ centers.” The CFPB report identified lack of broadband access and lower access to smartphones as limiting factors to banking access. It also provided a snapshot of economic challenges facing rural people and communities, including: (i) rural communities have lower incomes and higher poverty rates than the rest of the country; (ii) lower likelihood of having a credit record; and (iii) nearly 1-in-5 U.S. households have past-due medical bills.