About Those "Financial Deserts" - Are They Real? Or A "Financial Mirage"?

  

    ✅ There is a bit of a flaw in that financial desert "logic"!

😎 An inquiring mind might ask:"Where did this idea of "financial deserts" come from? Want to take a guess? 

From the Federal government, of course, via the Federal Reserve! Not to point out the obvious, but isn't there currently a national uproar about the efficacy and efficiency of our government at the national level - including the Federal Reserve. Have you noticed that, or is it just me? 

Lets take a quick look at the "invention" of the idea of financial deserts by the Federal Reserve (see chart above from Fed website - you can zoom in to see better). This is the Fed's example of a financial desert in urban Indianapolis, Indiana. The definition of an "urban financial desert" being "no bank branch within 2 miles". In the third panel (2021), you see "an urban financial desert" has developed because there is no bank branch within 2 miles of the center [orange] of the circle. Got it?

✅  Here perhaps, with these "financial deserts" constructs, is an easy example of why our Country is engaged in such a heated debate over the federal government. Look again at that third (2021) desert panel and note that each of the "red dots" represents an open, existing bank branch. Okay? Ready?

Now instead of drawing a 2 mile circle around the "orange center" , what if you drew a 2 mile circle centered on each of the "red dot existing banks"? Here's a mock up of what you would end up with:   

                                                  .

😎 Bingo! Everyone (well, almost everyone!) within the original Fed circle is now within 2 miles of a bank! ... the overlapping circles centered on open, existing bank branches make the "desert" begin to disappear!

✅ Accidental oversight or purposeful, "wishful thinking" by our government?

  ... crisis of confidence in our Legislature over a H.187 slither? You bet! Facts ... and the truth should matter.

Serving The Underserved In North Carolina: The "H.187 CU UpDate" Ducks Accountability..

  A reasonable request.

✅ Credit unions confront a surge of questions over accountability, transparency, and credibility - and not just in North Carolina!

Let's try a slightly different take on H.187 today. Here is the key talking point - those "financial deserts" - being used by the CCUL to sway legislators opinion: 

😎 Source: BNC [link] - " The Carolinas Credit Union League (CCUL) is pitching the legislation [H.187] as a way to restore financial services to economically distressed communities vacated by traditional banks. It’s seeking looser requirements for people to join nonprofit credit unions, creating opportunities for expansion into under-served “banking deserts” and serving people living at or below the poverty line, according to Dan Schline, the league’s president."

😎 “Credit unions have been serving North Carolinians for more than 100 years," added CCUL President and CEO Dan Schline. "This bill reflects our continued advocacy for expanding financial access where it’s needed most."

Here's the rub: Every citizen of North Carolina, in every North Carolina county and community, whether living above or below the federal poverty line is already eligible to join multiple credit unions - and has been able to join for years! 

😎 Why do these "financial deserts" continue to exist in North Carolina? Why haven't credit unions stepped up to solve the problem?

Here's how credit union critics challenge our credibility: "Although credit unions are supposed to focus on people who are “under-served” and of “modest means,” they are not required to collect data or report on their progress in meeting this mission. Studies show that credit unions increasingly serve upper-income ." - The Tax Foundation (2024).

✅ Would the Carolinas' Credit Union League have any problem with adding a requirement within H.187 for credit unions to open and maintain branches to serve these " financial deserts"? It would be useful for credit unions to also report annually on the progress made to resolve the "financial desert" problem! Okay?

  Why duck? Anything at risk from a little "put up or shut up"... other than our credibility?