MOORHEAD, Miss.–One credit union’s effort to step in and fill a void created when a bank closed a branch in a small town and created a “banking desert” has been recognized in the national media.
Hope Credit Union has opened a branch in Moorhead, Miss., filling the vacuum of financial services created when Regions Bank closed its branch here two years ago.
"That was actually the only bank in our community and the next-closest bank was probably 8, 9 miles to Indianola," Mayor George Holland told National Public Radio. "I was thinking, 'What are we going to do?'"
NPR noted there were a record number of bank branch closures during the pandemic in 2020, with banks closing 3,324 branches last year, according to a tally by S&P Global Market Intelligence.
"The reality is, the vast majority of the activity that happens in a branch is not revenue generating," Steven Reider, president of the consulting firm Bancography, told NPR. "In fact, it's cost-carrying activity."
In the case of Moorhead, it is located in the heart of the Mississippi Delta, home to largely African American community that Hope Credit Union has been serving and championing.
Pushed to Payday Lenders
The report noted that when banks close, the impact can go beyond inconvenience by pushing people to more expensive options such as check-cashing stores or payday lenders.
NPR pointed out that even though a lot of banking can now be done online, an FDIC survey found that 83% of people still met with a teller or other bank employee at least once during 2019. That same year, more than 40% of rural customers made at least 10 visits to the bank.
Mayor Holland told NPR Regions’ exit and Hope Credit Union’s arrival has actually been a benefit, as the credit union has signed up more members, offers more services and even added an ATM — something Regions did not offer.
"I can't say enough about what that meant to us to be able to bank right here in our town," Holland told NPR. "To be able to have all these resources right here in our town without having to travel."