Banking desert
Banking deserts are areas with inadequate banking services. They are usually in rural space due to being less populated, thus there are less profit opportunities for large institutions.[1]
Especially vulnerable to the issues associated with banking deserts are low-income residents and the elderly. If basic financial services are unavailable, residents become "vulnerable to predatory lenders and pricey check cashers".[2] In the US, banking deserts are more often found in communities of color than they are elsewhere.[3]
History
Banking deserts had been mentioned as early as the 1870s, by Tullio Martello and Augusto Montanari in their book, Stato attuale del credito in Italia e notizie sulle istituzioni di credito straniere, regarding
Bank deserts have been growing in the United States since the 1990s. Due to federal deregulation, mainstream banking companies were allowed to focus the most on more populated and profitable areas and close banks that didn't produce much revenue, which were usually those in low-income communities and places consisting of people of color. This made way for higher-priced
Impact
It's much harder for citizens to build wealth, credit, and savings with only expensive alternative services and without a physical bank nearby.
See also
References
- ^ PBS NewsHour. Retrieved March 30, 2020.
- ^ "'Banking Deserts' Spread Across Low-Income Neighborhoods". NPR. 13 November 2013. Retrieved 16 May 2015.
- ^ Watson, Andrea V. (27 October 2014). "Banking Desert Communities, More Blacks Live in Them". Chicago Defender.
- ^ Einaudi 2008, p. 142.
- ^ "Postal Banking to the Rescue in both Canada and the U.S." Canadian Union of Postal Workers. 4 June 2014. Retrieved 16 May 2015.
- ^ a b Despard, Mathieu (March 13, 2016). "Life in a Banking Desert". The Atlantic. Retrieved March 30, 2020.
- ^ Ross, Janell (June 15, 2019). "How Itta Bena, Mississippi, became a banking desert". NBC News. Retrieved April 6, 2020.
Bibliography
- Einaudi, G. (2008). Rivista di storia economica. G. Einaudi.