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Financial Institutions

Variable Definitions:

Banks: The number of bank locations in a given area

Credit Unions: The number of credit union locations in a given area

Department of Homeland Security, Homeland Infrastructure Foundation-Level Data (HIFLD) 

Years Available:

Why are these variables important to measure?

This dataset includes banks that are insured by the Federal Deposit Insurance Corporation (FDIC). The number of banks in a neighborhood is a useful measure of residents’ access to mainstream financial services like checking and savings accounts, small business credits, and mortgages. Since the financial crisis in 2009, almost 5,000 bank branches have closed in the U.S., creating what some researchers are calling “banking deserts.” A banking desert is a census tract that has no bank branch within ten miles of the center of the census tract. This can be especially problematic for elderly and low-income residents without access to reliable transportation and can leave such communities vulnerable to predatory high cost lenders offering payday and vehicle title loans.

Credit Unions
This dataset includes credit unions that are insured by the National Credit Union Administration (NCUA). Credit unions can serve as key resources for community development through small loans that traditional banks are often unwilling to give. Credit unions differ from traditional banks in their not-for-profit, member-owned structure. They are governed in a democratic style with a volunteer board of directors and usually place a large emphasis on local community relationships. Because of their not-for-profit structure, credit unions are often able to make small loans to low-income consumers at competitive rates that for-profit banks would be unwilling to give. As a result, they can serve as a key component of the development of local business and infrastructure in low-income communities.

Morgan, Donald et al. “How do bank branch closures affect low-income communities?” World Economic Forum, 7 March 2016. Link

Tansey, Charles D. “Community Development Credit Unions: An Emerging Player In Low Income Communities.” The Brookings Institution, 1 September 2001. Link

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