Bank Branch Distance Stable Amid Consolidation, New Fed Report Finds

Over the past 20 years, the location of the nearest full-service bank branch for urban consumers has remained stable at 1.5 miles and has improved for rural customers, falling from 4.6 miles to 4.3 miles, despite an increase in bank consolidation, according to a new report from the Federal Reserve Bank of Cleveland.

Within urban areas, the report found that the average distance to a branch remained at one mile for low- and moderate-income communities. Middle-income communities saw the distance fall from 1.8 miles to 1.5 miles, and upper-income neighborhoods saw the distance to a bank branch increase slightly from 1.6 miles to 1.7 miles during the past 20 years.

“Urban consumers on average have not experienced a significant change in their ability to access a full-service bank branch, and rural consumers saw full-service branches become more accessible,” the report said. In addition, bank consolidation has resulted in banking institutions increasing their number of branches—from 11 to 19 full-service branches on average, the report said, adding that “bank consolidation provides consumers access to larger networks of branches and has caused no significant change in a customer’s physical proximity to branches on average.”