Rural Idaho banks struggle to stay open

Not all rural Idaho cities have their own banks or credit unions, but tiny Pierce, population 600, was lucky. Earlier this year, the former White Pine Credit Union merged with Idaho Central Credit Union (ICCU), based in Pocatello.

“That community wouldn’t have had access to a financial institution if we weren’t able to go in and merge with the small credit union that was there,” said Laura Smith, director of public relations. The next closest city is Orofino, more than 30 miles away. The White Pine branch has 1,185 members because it supports surrounding areas as well, she said.

White Pine isn’t typical for ICCU, which usually opens in cities of 10,000 people or more, Smith said, though it has a branch in Jerome. Merging with the larger ICCU network offered other advantages as well. “We were able to put an [automated teller machine] up there and there hadn’t been one for a very long time, if ever,” she said. “Those kinds of products and services we might take for granted are really important to those smaller communities.”

Keeping rural branches open is challenging, said Bruce Lowry, president and CEO of Ireland Bank, Idaho’s oldest state-chartered bank, based in Malad City. Ireland Bank has rural branches in Carey, Downey, and Grace, all with populations under 1,000.

“We feel it is important to provide banking services to these underserved markets whenever we can for as long as we can,” Lowry said. “It becomes increasingly difficult each year to be profitable in these areas and to attract qualified employees willing to live and work in a small town.”

First Federal Bank, based in Twin Falls, has branches in several smaller Magic Valley cities. “We have not closed any branches and do not plan to,” said Jason Meyerhoeffer, president and CEO. “In fact, most of our branches are in rural markets already.”

But across the United States, rural areas are losing branches, according to Banking Deserts in America, a study from the Washington, D.C.-based National Community Reinvestment Coalition. Two new “deserts” – regions that lost a branch with no other branch within 10 miles – opened in Idaho in recent years, in Craigmont and Arco, said Bruce Mitchell, senior researcher.

There’s not much anyone can do to stop a bank, credit union or other institution from leaving a market, said Trent Wright, president of the Boise-based Idaho Bankers Association.

“If there’s not enough traffic to support the brick and mortar, they have to move on,” Wright said.

Idaho has more branches today than at any other time in its history, he noted, adding that he has verbal commitments from several large banks that they plan to expand in Idaho due to its growth.

“Is every rural community going to have a bank?” Wright said. “No, but they never have.” Businesses located in rural areas keep that in mind when looking for credit, he said, adding that he’s yet to find a business that said it couldn’t open in a rural community because it didn’t have a bank branch. Technologies such as mobile banking can also help serve rural communities without branches, he said.

The problem is, rural Idaho doesn’t always have access to internet or mobile data either. “That was one of the things I learned about going to Pierce,” Smith said. “Being able to access your money from your mobile devices isn’t always possible,” though she found internet more readily available than mobile data.

For now, people living in or passing through Pierce still have their financial institution. “Whenever we put in a new branch or have a new location, it offers our members more options and more accessibility,” said Smith. “There’s probably not a lot of people driving through Pierce, but just being in that area of the state and being part of everything North Idaho has to offer is part of our strategy of being engaged in all the communities where we are.”

The city without a bank

Not every rural city is as lucky as Pierce. Take Grand View, in Owyhee County, which lost its single bank branch a year ago. “We have to drive to Mountain Home, about 25 miles,” said Jodi Jewett, city clerk and treasurer, who also works for the Department of Motor Vehicles office for the county. She makes the trip once a week herself, for both the city and the county. “It’s been a really big hit for our community.”

The biggest hit has been for the city’s seniors. The previous bank put an automated teller machine in the gas station when it left. “That’s great for the younger generation, but the older generation doesn’t understand technology and how it works,” Jewett said. Instead, once a week the senior bus drives to Mountain Home, while other elderly people have their children do their banking for them, she said.

As an agricultural community, the city has a high population of H-2A temporary agricultural workers, mostly from Mexico and Peru, who are there March through December. They too have a problem with banking, because they cannot go more than 25 miles from their home base, Jewett said, and going to Mountain Home to do their banking takes them out of that radius.

Pioneer Federal Credit Union, based in Mountain Home, has been approached about opening in Grand View. “We’ve looked into it a little bit,” said Elizabeth Thomas, vice president of marketing and development, who lives between Grand View and Murphy herself and commutes to Mountain Home. The Mountain Home office has drive-up “personal teller machines” open from 7 am to 7 pm Monday through Saturday, as well as its myPioneer Personal Assistant application, which lets customers video-conference with employees. “You can open a loan, transfer money – pretty much anything other than get physical cash or physical items,” she said, adding that satellite and CenturyLink internet service is generally available. “It’s not the highest resolution, but it’s not cutting out the whole time,” she said.

Meanwhile, the Grand View branch stands empty. One bank expressed interest, but couldn’t do it last year, Jewett said. “They said maybe this year,” she said. “But we’ve never heard anything back from them. So we’re still sitting bankless.”