Rural Appalachian area in Tennessee. Rural Appalachian area in Tennessee. (Credit/Shutterstock)

Credit unions and community banks have historically served an essential role in providing core financial services to underbanked populations in rural locations that larger institutions tend to avoid. In recent years, community banks have faced increasing challenges to maintain profit, while credit unions have struggled to keep up with the number of banking options that larger institutions provide. From increased labor and real estate costs to a lack of efficient tools and technical knowledge, it is getting harder to justify keeping smaller branches open across the country. While the unbanked population has fallen to 4.5% in the U.S., rural Americans still depend on physical branches for access to cash and credit. Keeping these institutions open is a critical part of increasing access to financial services in underserved communities.

Understanding the population that these institutions serve, and how these customers and members interact with them, is key to understanding their value. In many cases, the customer/member base may be older and less affluent, thus slower to adapt to mobile technology. This makes the presence and availability of human tellers all the more critical. Rural Americans are less likely to have a sufficient credit history and more likely to use non-bank credit, resulting in rural consumers paying more for credit. Ultimately, community banks are three times more likely to locate their offices in a non-metro area, while holding the majority of banking deposits in U.S. rural and micropolitan counties. If these institutions leave, there is little to no safety net for rural Americans in need of credit.

Complete your profile to continue reading and get FREE access to, part of your ALM digital membership.

Your access to unlimited content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including and

Already have an account?


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2023 ALM Global, LLC. All Rights Reserved.