Standing Strong in Financial Deserts: How Credit Unions Step Up

In some communities, the nearest bank is more than an hour’s drive. For others, the last branch closed and never returned. These places are known as financial deserts – locations where everyday tasks like cashing a paycheck, opening a savings account, or applying for a small loan becomes a major hassle rather than a simple errand. Today, an estimated 12.3 million people live in areas defined as banking deserts, with another 11.1 million in “potential deserts.”

Credit unions are built to do something different. As not-for-profit cooperatives, they exist to serve their members and communities for the long haul. That model changes how and where they place or expand branches, make lending decisions, and provide services—keeping financial access open where it might otherwise disappear.

Operating With Community at the Center
Because members are also owners, credit unions make decisions with people, not profits, at the center. When other institutions leave, credit unions often remain. Research shows they “cured” deserts in 36% of cases by opening where no branch existed before—despite holding only 20% of all branches nationwide. That presence ensures in-person banking where no one else is willing to go.

The difference shows up in lending, too. Rather than relying solely on rigid formulas, credit unions consider local context and personal history. They also provide counseling that help individuals and families avoid costly alternatives, building stability instead of pushing people to the margins.

Designed to Stay
Even with high overall account access, 19 million households were underbanked in 2023, meaning they still relied on costly nonbank products. These challenges fall heaviest on lower-income, younger, Black, Hispanic, and Native households. By offering affordable accounts, emergency loans, and personalized guidance, credit unions provide a guardrail against instability and a path toward financial security.

When the last branch leaves town—or when a family faces an unexpected bill—credit unions stay. That steady presence is how communities move from getting by to building up.

Want to Learn More?
Backbone is a national coalition of credit unions committed to ensuring no community gets left behind in a financial desert. We can connect you with credit union leaders, members, and advocates who are working every day to bring access, stability, and opportunity back into the communities that need it most.

Reach out to [email protected] or visit backbone.us to learn more.

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