Federal Reserve: Bank closures hitting rural areas hardest

Capitol Bureau

TOPEKA, Kan. (KSNT) – Banks have been closing at a high rate around the country. A government study found that more than 6,000 banks closed between 2012 and 2017.

The Federal Reserve report said it’s small communities that suffer the most when a bank closes.

More than half of all counties in America had more banks in them close than open or stay the same. The study found the rate is worse in rural areas.

Banks closing can impact a community’s population, as well as whether a person gets a loan to buy a house or build a company.

Silver Lake Bank began in the town of Silver Lake 110 years ago. Now it has five branches.

President of the bank, Patrick Gideon said having a bank stay open is important for rural areas.

“I think a community bank is the same equivalent as a grocery store in town, that you’ve got to have those in order to keep a town viable and alive,” Gideon said.

He said that a bank in a small town is good for both the bank and the community.

“The model for a community bank accept the deposits for the people in the community, and you turn around and loan the money back to the people in the community to keep it going, so it’s a circle of life, it’s a process that has to work to keep it all healthy, and happy, and vibrant,” Gideon said.

The study found that the hardest-hit rural areas tended to be poorer and less educated.

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