Bank Branch Closures and Banking Deserts in the Third Federal Reserve District States

This report finds that the loss rate of bank branches in the Third District states of Pennsylvania, New Jersey, and Delaware more than doubled during the pandemic. The three states combined lost 627 bank branches. This led to a significant increase (from 48 to 63) in banking deserts — areas with no bank branches nearby.

Most of the banking deserts in these states are in Pennsylvania and are more likely to be in middle- and upper-income and suburban areas. But the share of lower-income individuals living in banking deserts increased by about 30 percent in the three states. The number of lower-income, non-White, or rural banking deserts also increased from six to 11 from 2019 to 2022.

Increasing bank branch closures are a cause for concern, as banking deserts can limit opportunities for lower-income residents to improve their financial health and accrue wealth.