(Image Source: regularguy.eth / Unsplash)
April 2023
The state of banking across the nation has been on our minds at the Econ Quiz office over the past few weeks. Specifically, we are wondering if the rocky road faced by some of the nation’s large banks will affect banks in our rural communities.
In a June 2020 quiz we reported that the Federal Reserve Board of Governors asked about bank use in its 2016 Survey of Consumer Finances. Although rural and metropolitan bank users reported similar frequencies for activities such as visiting a bank branch in person (rural=78%, urban=79%), using direct deposit (rural=83%, urban=85%) or using automatic payments (rural=63%, urban=66%), there are some significant differences in banking habits that may be related to access to banking institutions.
Rural residents were more likely to be unbanked, with 9.2% of rural respondents to the 2016 Survey of Consumer Finances reporting that they do not have a checking or savings account as compared to 5.7% of urban respondents reporting the same. Among other challenges, 50% of rural respondents reported that their nearest bank branch was at least 10 miles away, and an overall 25% of rural respondents reported that their closest bank branch was at least 50 miles away. These consumers would be considered as living in banking deserts.
That brings us to today’s quiz question. In 2014, the Federal Reserve identified 1,132 banking deserts, which it defined as census tracts in which there are no bank branches within a ten-mile radius of the center of the tract. Nearly two-thirds, or 734, of bank deserts were located in rural areas. How many banking deserts were identified in Wisconsin?
A. 6
B. 22
C. 8
D. 1
E. 15
ANSWERS
Answer A. In the 2014 study, six banking deserts were identified in Wisconsin. All were in rural census tracts in the northern part of the state, with five of the six located in the Northwoods region.
