A banking desert is an area without traditional financial institutions and services. They are common in rural areas because large financial institutions are reluctant to operate in less populated areas that are less profitable. Two colleagues and I found that people who grow up in a bank desert on Native American reservations are at a financial disadvantage throughout their adult life. They are less likely to use traditional credit, such as a credit card or a mortgage. When they do, their payments are significantly higher than average, and they’re more likely to fall behind on payments. These effects persist even for people who move to areas with more banking services.
What still isn’t known
An important question that still hasn’t been answered is whether technology can help sol...Read More