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Neighborhood Bank Branches Vanish at Record Pace

Many older customers have to travel to other towns for services

A closed bank branch

Mark Winfrey/Getty Images

Customers in “banking deserts” that need to deposit a check or get needed cash may have to plan ahead.

Tubac, Ariz., a town of 1,200 about 45 miles south of Tucson, has plenty of shops, restaurants and art galleries that make it a pleasant place for retirees. But pretty soon, one amenity that Tubac won’t have is a bank. The lone local branch is closing in April, though the ATM will be open until June.

Tubac is just one of many places where customers face the demise of neighborhood bank branches. A Wall Street Journal analysis of federal data found that more than 1,700 bank locations closed in the 12 months that ended in June 2017.

For Sue Grousd, a 69-year-old retiree in Tubac, the bank closing will mean driving to another town 18 miles away to complete wire transfers, have documents notarized or take advantage of other face-to-face services she’s accustomed to receiving from a familiar staff. For other customers with mobility problems, who depend on a van from the local senior center to take them on errands, depositing a check or getting needed cash may require planning.

“There is one other ATM at a tiny market that also has a gas station, but you have to pay a service fee there,” Grousd said in an interview this week.

The disappearance of bank branches is a trend that began in the wake of the Great Recession, when institutions started closing locations as a cost-saving measure and to cope with low interest rates and the increased cost of meeting regulations. With many younger customers going cashless and using mobile banking apps, banks can maintain their deposits with fewer locations, the Journal reported.

The Federal Reserve Bank of St. Louis reported last year on the phenomenon of “banking deserts” — census tracts with no bank branches within 10 miles. They found 1,132 such areas across the U.S., including 398 in cities, and identified 1,055 other “potential deserts” with just one local bank branch.