The consolidation of financial institutions in the United States – yes, including credit unions – is hitting rural populations and communities extra hard, leaving residents without the basic financial services they have been used to in order to grow or maintain their economic health or financial inclusion efforts.
A rapid exodus of in-person banking services is in progress, as rural communities are ten times more likely than urban areas to be located in a banking desert, according to research conducted by the Consumer Financial Protection Bureau (CFPB). Stakeholders have detailed how stark declines in the number of financial institutions in rural regions have had a particularly negative effect. Such declines, in turn, led to the arrival of certain non-bank alternatives like predatory payday lending outfits that charge outright abusive high fees and interest rates.
These all-too-familiar banking deserts throughout the U.S. only exacerbate the damage to the financial health and inclusion efforts of those rural communities who require the financial stability a financial institution like a credit union community development financial institution (CDFI) can provide.
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