A bank that wants to close a branch has to tell the federal government 90 days in advance, with a detailed statement of reasons. It has to post a notice on the branch wall for the last 30 days and mail one to every customer of that office. In one narrow case, where an interstate bank closes a branch in a low- or moderate-income neighborhood, a resident can write in, and if the regulator decides the request is not frivolous it must consult community leaders and convene a meeting about alternatives.
Then the branch closes. The statute says so in plain terms: nothing the agency does under that section affects the bank's authority to close the branch, including the timing. The interagency policy that implements it goes further and tells banks the customer notice should state that the agency cannot approve or prevent the closing. The procedure is a disclosure regime wearing the costume of a review.
The Arithmetic Underneath
The run rate is steady rather than dramatic. FDIC-insured institutions operated 88,065 domestic offices in mid-2018, 84,972 in 2020 and 77,786 in 2023. The 2026 survey counts more than 75,000, down from more than 76,000 a year earlier, and the number of institutions fell from more than 4,400 to more than 4,200 in the same twelve months.
Two policy changes in May 2025 made the consolidation side easier. The FDIC rescinded the merger policy statement it had adopted the year before and reinstated the earlier one, and the Comptroller of the Currency rescinded its 2024 business combination rule, restoring expedited review and the streamlined application. Neither touches the branch-closing notice. They change how quickly the transaction behind the closings gets approved.
The Mechanics of a Desert That Forms One Branch at a Time
Researchers at the Federal Reserve define a banking desert as a census tract with no branch within two miles in an urban area, five in a suburban one or ten in a rural one, and a potential desert as a tract that becomes one if a single branch closes. By that measure there were 3,629 deserts and 3,094 potential deserts in mid-2024, holding 12.3 million and 11.1 million people. A year later the desert population was 12.8 million, with 11.6 million more in potential deserts, about 7.3 percent of the country.
The transition runs one way. Only 1 percent of the deserts recorded in 2023 were cured by a new branch opening the following year, and 96 percent of potential deserts were still potential deserts a year later. A closure that leaves the last branch standing registers as no loss at all in public statistics, but it converts the tract into a place where the next ordinary business decision removes banking entirely.
Who Is Left at the Counter
A Philadelphia Fed study published in May 2026 put 4.5 million Americans aged 65 and over in banking deserts or at risk of losing their last branch, 2.4 million already in one and 2.1 million one closure away, a count up 26 percent since 2019. More than 800,000 of those seniors have no home broadband.
The geography is not what the phrase suggests. Growth has been fastest in middle- and upper-income suburbs, led by New Jersey at 95 percent and Pennsylvania at 81 percent. Texas has the most affected seniors at 211,408, followed by Florida, North Carolina and California.
Behavior explains the exposure. Nearly a third of banked consumers 65 and older use a teller as their primary way of reaching an account, at a time when 48.3 percent of all banked households use mobile banking first. Older adults are the least likely group to be unbanked, at 2 percent, which is precisely why the branch, not the account, is the thing at risk.
What Replaces It
Usually an ATM, and the policy statement is clear that swapping a branch for one still counts as a closing. But ATM withdrawals fell from 5.1 billion in 2018 to 3.7 billion in 2021 while the average withdrawal rose to 198 dollars, the pattern of a shrinking network used less often for larger sums. Cash is not disappearing: 81 percent of consumers used it in the past month, and it still accounts for 14 percent of payments by number.
The notice requirement was written on the assumption that losing a branch is an inconvenience to be disclosed, which is a fair description of the first closing in a neighborhood and a poor one for the last. Two things are worth checking for anyone who banks in person. Whether the branch being used is the only one within a few miles, because that is the definition that decides what happens next. And what the fallbacks cost: a postal money order runs 2.65 dollars up to 500 dollars and is free to cash at a post office, cheaper than most alternatives and slower than all of them.
— John Stone