Do Metropolitan Areas have Equal Access to Banking?

A Geographic Investigation of Financial Services Availability
Policy Paper
Feb. 1, 2017

Metropolitan areas are places where the majority of residents in the U.S. live and work. Each of these areas has unique features regarding education, employment, public transit options, arts, recreation, and worship opportunities. Each metropolitan area also has a unique financial services landscape—a mix of both mainstream and alternative financial services, which may offer households different types of products and services to help manage resources and make ends meet. 

While prior research has examined the geo-spatial distribution of mainstream and alternative financial services within particular cities and metropolitan areas, little is known about how the availability of these services varies across metropolitan areas for the entire country. For instance, what is the availability of financial services in the Kansas City area, where the "snowbelt" city's poverty rate is slightly higher than the national average, 30 percent of residents are Black, the population is growing, and the Federal Reserve and FDIC both have branches? And, how does the availability of Kansas City area's financial services compare to that of the Detroit area, where the "rustbelt" city's poverty rate is nearly three time the national average, 83 percent of residents are Black, the population is shrinking, and major manufacturing companies closing? Or the Riverside, CA area, a "sunbelt" city located in the San Joaquin Valley with an agriculture-based economy, a poverty rate that is higher than the national average, and a Latino population of 48 percent? Variation in this availability may indicate that households living in different communities have greater or lesser access to financial services to promote financial stability. 

Using financial services and community demographic data for 356 metropolitan statistical areas (MSAs) across the U.S., we compared the concentrations or densities of bank and credit union branches and alternative financial services.