A new report shows that U.s. cities with the highest percentage of financial intermediaries in their cities are faring poorly compared to those with the lowest.
The report, by the nonprofit think tank Fairness and Equity Analytics, found that in a survey of more than 50,000 metro areas, only 6% had a bank that serves as a financial intermediary.
It also found that just 1% of metro areas with the most financial intermediary firms in their areas have fewer than 10 financial intermediators.
“Our data show that the economic impact of financial intermediary activities is not uniform across cities and states,” said Fairness & Equality CEO John D. McKibben.
“As a result, it is important to identify and tackle the specific problems that make it hard for many of these communities to maintain their financial stability.”
Among the issues highlighted in the report:There are many types of financial services.
A bank may be a financial advisor, a loan officer, a credit card company or a debt collection agency.
Many of these services are offered by large companies, but some of them are owned by small local firms that are often under-regulated by the federal government.
There are also some areas where the problem is more subtle.
For example, in Chicago, there is a large number of retail banks that provide consumer lending services.
But many of the banks are owned or operated by smaller, independent companies.
“These small banks have access to higher levels of risk and the banks have limited capacity to manage the risk of their customers,” said Robert Schmitt, senior research fellow at Fairness&Equal.
“The result is that customers have little or no confidence in these small banks.
They don’t feel comfortable lending money to them and often do not have the knowledge to understand their terms and conditions.”
In other cases, there are specific requirements for the banks.
For instance, if a customer wants to open a credit union account, the bank must certify that the account will be insured and not charge interest rates.
But these are just some of the issues, said McKibbon.
There are also specific ways to limit the size and scope of the financial institutions that exist in each community.
“If we are going to be able to provide financial services in the 21st century, we have to ensure that we have a system that is fair and reasonable,” said McKiba.
“That means ensuring that we do not allow large financial institutions to be too big or too small.”
The report also points out that banks are becoming more and more reliant on technology.
In particular, they are increasingly focusing on mobile banking, with more than a billion consumers using their phones as their primary source of financial information.
“We have to find a balance between the fact that consumers want to use their mobile devices to make financial decisions, and that these devices are becoming increasingly mobile,” said Schmitt.
“If you look at the number of financial transactions in the U.K., for instance, it has more than tripled since 2010.
And in the last year, the number has more or less tripled.
In other words, we’re not talking about a trickle-down effect, we are talking about an acceleration.”
The findings are consistent with previous research that has found that more than half of Americans are now using credit cards to pay for their groceries.
That has been a significant challenge in many communities because of the high cost of credit cards.
“For most people, the most important part of credit is that it allows them to use a credit line to buy things,” said D.B. Crowe, senior associate director for government affairs at the National Association of Realtors.
“But if you have to spend a lot of money on a card, you might as well spend it on a gas pump or a computer or whatever it is that you need to buy, and there are many other things that are available.”
Crowe said there has been an explosion in mobile payments in recent years, which has meant that many consumers don’t realize that they are using a credit or debit card, even though they are.
“It’s really a no-brainer for people to use mobile phones,” said Crowe.
“People have to be aware of that and they need to make sure they’re paying for the services that they’re getting from the credit card provider.”
The researchers also found significant disparities in the way banks treat customers.
In most areas, a bank can charge a higher interest rate than it would in a traditional bank.
And banks are more likely to charge customers fees than they are to charge them interest.
In addition, a significant number of the firms in the study were owned by for-profit companies.
For example, the report found that there are nearly twice as many for-profits in metro areas than non-profit organizations.
In many cities, the amount of money that non-profits are spending is far more than that of for-profit entities.
The same is true for small non-governmental organizations