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Beyond ATM access: How a lack of banking options affects rural communities

Beyond ATM access: How a lack of banking options affects rural communities

ATMs can be found all throughout metropolis areas, which means a substantial portion of the U.S. population has access to these money-dispensing machines. After all, Americans have been opting out of rural lifestyles in favor of city and suburban living in recent years. However, this trend has left many small, non-urban communities with diminishing resources, in particular financial services. Across the nation, people are living with a virtual lack of access to essential money-related services, including brick-and-mortar banks and ATMs.

As suburbs and cities grow, rural areas lose out on banks and ATMs
Urbanization began around the 19th century, when young people started migrating en masse toward major cities like New York, Chicago and San Francisco in search of jobs, opportunities and a more communal way of life. As demand for real estate in the country's most bustling metropolises continued to grow, however, so too did the cost of living within city limits. Soaring prices have pushed populations out of city centers, but people haven't gone too far: According to a 2017 report from FiveThirtyEight, low-density suburbs around large metro areas experienced the most pronounced growth in 2016. These regions offer residents relatively easy access to city services without the financial burden that comes with an urban address.

But as the suburbs of hubs like Austin, Texas, and Charleston, South Carolina, experience a revitalizing boom, the nation's more isolated, traditionally agrarian regions continue to be left behind. FiveThirtyEight reported that clear population declines have been visible in the country's oil-producing and Rust Belt states, where many communities are considered rural.

This mass exodus has left the nation's countryside with limited resources. Along with businesses like medical clinics and grocery stores, financial institutions have been disappearing from small, rural communities. A lack of access to economic needs as basic as an ATM machine can have serious consequences for towns that are already dealing with isolation and dwindling populations.

Banks, credit unions and ATMs are essential for rural success
The state of Iowa has been a prime of example of the American shift from a rural to urban way of life. According to USA Today, Iowa saw its five biggest cities expand greatly between 2000 and 2010. During the same time, its five most rural counties - located in the western part of the state - lost 10 percent or more of their populations. The Des Moines Register reported that between 2010 and 2015, Iowa experienced a 3.6 percent decline in branch offices, and a staggering loss of 50 bank charters. Figures are similar for credit unions.

In small towns like Lucas, Iowa, which boasts a modest population of 215 residents, the lack of access to ATMs, tellers and other basic banking services has been a growing concern. Lucas is one of Iowa's many rural communities that lost their local financial institutions between 2014 and 2015, reported the Des Moines Register. Residents of these areas have bucked the idea that digital banking can replace the brick-and-mortar experience, telling the source that the financial services void has had negative consequences for residents.

"It just makes banking very inconvenient. I know in this day and age you do everything on computers, but there's a lot of people who still like to do their banking in person," John Anderson, the mayor of New Hartford, Iowa, whose bank shuttered in 2012, explained to the Des Moines Register.

An ATM opportunity for banks and credit unions
This intense demand for financial services in the country's rural communities can be seen as an opportunity for banks and credit unions to expand their operations and enhance their reputations. By providing people with a reliable, brick-and-mortar establishment where they can use ATMs, deposit money and discuss fiscal options, banks and credit unions can become trusted, valued members of the country's rural towns.

April 27, 2017