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Banking deserts are areas with inadequate banking services. They are usually in rural space due to being less populated, thus there are less profit opportunities for large institutions.
Especially vulnerable to the issues associated with banking deserts are low-income residents and the elderly. If basic financial services are unavailable, residents become "vulnerable to predatory lenders and pricey check cashers". In the US, banking deserts are more often found in communities of color than they are elsewhere.
Bank deserts have been growing in the United States since the 1990s. Due to federal deregulation, mainstream banking companies were allowed to focus the most on more populated and profitable areas and close banks that didn't produce much revenue, which were usually those in low-income communities and places consisting of people of color. This made way for higher-priced alternative financial services, such as payday lenders and check-cashing stores, to occupy these areas. The amount of banking branches in the United States peaked at 99,163 during the Great Recession and fell to 88,070 by 2018; major cities that have had banks close the most in non-white areas include Baltimore, Chicago, Philadelphia, Detroit and Las Vegas.
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