Banking deserts becoming more widespread, including in Capital Region

Here's a new phrase for your business dictionary: Banking desert.

As with "food desert" and "child care desert," it denotes the absence of something - in this case, a full-service, brick-and-mortar branch of a financial institution, whether retail or commercial bank, savings and loan association, or credit union.

The Federal Reserve, the U.S. central bank responsible for monetary policy, posted a dashboard earlier this year to identify and drill down into the characteristics of banking deserts and potential deserts, which are delineated by census tract. "Deserts" signify an area without a physical branch; "potential deserts" could become deserts if the one existing branch in the tract closes.

Soon thereafter, the Federal Reserve Bank of Philadelphia, one of the Fed's 12 operating arms nationwide, took an exhaustive look at the rise of banking deserts since the COVID-19 pandemic.

By the numbers, it found that banking deserts increased between 2019 and mid-2023 by 217, totaling close to 3,600 as financial institutions across the country - particularly the larger, national ones - closed branches.

During the period, New York gained five deserts as it lost some 450 banking offices.

The report says the Great Recession of 2007 to 2009 put an end to U.S. branch expansion, but that the 2020 pandemic sped up closings as foot traffic to offices declined and online and mobile banking took off.

Despite those technologies, "physical banking still plays an important role in some communities," according to the report, citing its preference among older adults, rural residents and lower-income populations who may lack appropriate devices or broadband service.

Most branch losses - and thus banking desert growth - occurred post-COVID in higher-income, suburban and predominantly white communities, the report says, noting that there are more suburban and majority-white census tracts across the country.

Locally, the desert dashboard shows little change between 2019 and 2023.

Schenectady County, for instance, had no banking deserts throughout the period, but the census tract that includes Duanesburg and Delanson could potentially become one.

In Albany County's Helderberg Hilltowns, the tracts for Berne and Rensselaerville qualify as deserts, and nearby Knox is denoted as a potential desert. The village of Altamont also has that potential.

In Saratoga County, the large census tract around the town of Day in the northwest corner is considered a desert, while the neighboring town of Edinburg tract is a potential desert, as is the town of Galway tract.

In the east, along the Hudson River, the tract outside the village of Schuylerville stretching toward Saratoga Lake also qualifies as a potential desert, while the adjacent Town of Northumberland tract was added as a desert in 2021.

Separate federal data show that the branch count for the Capital Region metro has declined since the Great Recession, down to 267 as of June this year from a 30-year high of 322 branches in 2009.

MarleneKennedyisafreelance columnist.Opinionsexpressedin hercolumnareherownandnot necessarilythenewspaper's.Reach heratmarlenejkennedy@gmail.com.