“Banking deserts” in U.S.

 

Banking Retreat

Low interest rates and added regulation designed to head off another global financial crisis has made it more expensive and complicated to run a banking operation these days.  Gone are the heady days when banks were building 200 new brick and mortar locations a month in the U.S. market, leading up to the market top in 2008, when there were 100,000 bank branches in the U.S.—35 for every 100,000 adults, twice as many, per capita, as Germany.

Today, lenders are cutting back.  Since the financial crisis, banks have closed an average of three branch offices a day, and the pace has picked up.  In the first half of 2017, a net of 869 brick-and-mortar bank branches shut their doors.

Community organizations have noted that much of the cutback has occurred in areas where less-wealthy people live, and in rural areas there are now more than 1,100 “banking deserts” in the U.S.—defined as places where consumers have to drive at least ten miles to the nearest bank branch.  At the other end of the spectrum, half of Americans, chiefly from wealthier neighborhoods, live within one mile of their nearest bank.

The lack of banking locations hits small businesses and homeowners the hardest, since many of their lines of credit are dependent on relationships.  The local banker knows them and their character, even if their balance sheets might not be spotless.  A study in 2014 found that when branches close, new small business lending falls by 13% in the surrounding area.  In low-income areas, the impact comes in at something closer to 40%.

Source:

http://www.economist.com/news/finance-and-economics/21725596-banks-have-shuttered-over-10000-financial-crisis-closing-american?fsrc=scn/tw/te/rfd/pe

About Objectively Speaking

Tom Batterman, founder of Vigil Trust & Financial Advocacy and Financial Fiduciaries, LLC is in the business of representing the best financial interests of his clients. Having provided objective, fee-only financial management services for over two decades, he specializes in managing the investment and related financial affairs of individuals and mutual insurance companies who do not have the time, interest or expertise to manage such matters on their own. As an objective, unbiased professional who takes on a fiduciary responsibility to his clients, he guides clients to the financial decisions they would make themselves if they had years of training and experience and the time and expertise to fully research and understand all of their options. Founded in 2010 as an outgrowth of Vigil Trust & Financial Advocacy, Financial Fiduciaries, LLC is a financial management solution for individuals and mutual insurance companies who recognize they do not have the time, interest or expertise to properly attend to their financial matters on their own. While there are many financial “advisors”, most of them have investment products to sell and the “advice” they provide is geared toward getting their clients to engage in a purchase. As one of the rare subset of advisors known as “fiduciary advisors”, Financial Fiduciaries does not sell any investment product so its guidance is not compromised by conflicts of interest which plague ordinary advisors. Prior to his employment in the financial industry in financial advocacy and trust positions, he worked at a private law practice in the Wausau area in the areas of estate planning, tax, retirement planning, corporate organizations and real estate. He is a graduate of the University of Wisconsin-Madison and the UW-Madison Law School and has during his career held Series 7, 24 and 65 securities licenses. A longtime resident of the Wausau, Wisconsin Area, Tom is active in the community. He enjoys golf, curling, skiing, fishing, traveling and spending time with his family.
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