Do “banking deserts” even exist? Examining access to brick-and-mortar financial institutions in the continental United States

Abstract

This study compares competing definitions of “banking deserts” and their applicability in characterizing access to physical financial institutions such as banks, credit unions, or farm credit lenders. Geostatistical techniques are used to locate and spatially analyze financial institutions in census tracts across the lower 48 United States. Logistic regression is used to identify the demographic, economic, and geographic determinants of access to financial institutions. Mapping results indicate that a significant majority of the U.S. population resides near at least one financial institution, challenging the suitability of the “desert” metaphor. Regression models instead measure the extent to which brick-and-mortar financial institutions serve a given area, finding that poverty, lower educational attainment, and lower population density, were consistently associated with being underserved by financial institutions.