The NAFCU Journal March-April 2020 - 8

THE BOTTOM LINE

Serving Rural America
By Curt Long

R

ural areas are a frequent topic of media focus.
Stories of their slow demise are abundant, citing
hollowed-out factories, outmigration to urban areas
and a shrinking tax base. It is true that rural population growth has been essentially flat in recent years. While
there have been brief times in previous decades when that
was the case, the persistently slow rural population growth of
recent years is unique (see Chart 1a). The Bureau of Economic
Analysis recently completed county-level GDP estimates,
allowing for aggregation among urban counties (those in a
metropolitan statistical area, or MSA) and rural ones. Those
figures show that urban area real GDP growth has been, on
average, one percentage point higher than rural GDP growth
since 2013 (see Chart 1b).

in rural counties, while banks have turned their attention to
metro areas. Large banks in particular have almost completely
avoided building new branches in counties outside of an MSA,
with only 55 such branches built in the past five years.

These trends would appear to carry some large implications
for financial institutions. A report from the Federal Reserve at
the end of last year noted that the number of bank branches
in rural counties declined 14 percent between 2012 and 2017.
Furthermore, households in rural areas are far more likely
than urban households to use branches as their primary
method for accessing banking services (38 percent rural vs.
22 percent urban, according to the 2017 FDIC National
Survey of Unbanked and Underbanked Households). With
banks increasingly focused on denser, higher-income urban
areas, credit unions are increasingly filling the gap left by
their departure.

Recent Branching Trends

NAFCU's analysis of branch data extends
the work by the Federal Reserve by adding
the type of institution. Table 1 shows that
for older branches (those that have been
in existence for more than five years),
community banks have far greater concentrations in nonmetro areas than either large
banks (those with $10 billion or more in
assets) or credit unions. Metro areas host
90 percent of large banks' older branches
and 84 percent of credit unions' older
branches. However, more recently credit
unions have increasingly built branches
8

THE NAFCU JOURNAL  MARCH-APRIL 2020



The NAFCU Journal March-April 2020

Table of Contents for the Digital Edition of The NAFCU Journal March-April 2020

The NAFCU Journal March-April 2020 - Cover1
The NAFCU Journal March-April 2020 - Cover2
The NAFCU Journal March-April 2020 - 1
The NAFCU Journal March-April 2020 - 2
The NAFCU Journal March-April 2020 - 3
The NAFCU Journal March-April 2020 - 4
The NAFCU Journal March-April 2020 - 5
The NAFCU Journal March-April 2020 - 6
The NAFCU Journal March-April 2020 - 7
The NAFCU Journal March-April 2020 - 8
The NAFCU Journal March-April 2020 - 9
The NAFCU Journal March-April 2020 - 10
The NAFCU Journal March-April 2020 - 11
The NAFCU Journal March-April 2020 - 12
The NAFCU Journal March-April 2020 - 13
The NAFCU Journal March-April 2020 - 14
The NAFCU Journal March-April 2020 - 15
The NAFCU Journal March-April 2020 - 16
The NAFCU Journal March-April 2020 - 17
The NAFCU Journal March-April 2020 - 18
The NAFCU Journal March-April 2020 - 19
The NAFCU Journal March-April 2020 - 20
The NAFCU Journal March-April 2020 - 21
The NAFCU Journal March-April 2020 - 22
The NAFCU Journal March-April 2020 - 23
The NAFCU Journal March-April 2020 - 24
The NAFCU Journal March-April 2020 - 25
The NAFCU Journal March-April 2020 - 26
The NAFCU Journal March-April 2020 - 27
The NAFCU Journal March-April 2020 - 28
The NAFCU Journal March-April 2020 - 29
The NAFCU Journal March-April 2020 - 30
The NAFCU Journal March-April 2020 - 31
The NAFCU Journal March-April 2020 - 32
The NAFCU Journal March-April 2020 - 33
The NAFCU Journal March-April 2020 - 34
The NAFCU Journal March-April 2020 - 35
The NAFCU Journal March-April 2020 - 36
The NAFCU Journal March-April 2020 - 37
The NAFCU Journal March-April 2020 - 38
The NAFCU Journal March-April 2020 - 39
The NAFCU Journal March-April 2020 - 40
The NAFCU Journal March-April 2020 - Cover3
The NAFCU Journal March-April 2020 - Cover4
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