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Study: Where Are Credit Unions Expanding and Trimming Branch Networks?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Vanishing bank branches have become a reality for most U.S. metro areas. According to a study by DepositAccounts.com, another LendingTree partner, from 2008 to 2018 all but seven of the 100 largest U.S. metro areas lost bank branches. When reviewed on a branches-per-capita basis, every single metro experienced bank branch loss. The trend of banks trimming their branch networks is unsurprising given that 71% of bank customers regularly do their banking online and 43% use banking services on mobile devices.

Credit unions appear to be filling some of the branch coverage gaps left by banks. In this study, our analysts compared the number of credit union branches operating in June 2019 to the number of branches operating five years earlier, and we found that credit unions had expanded in 50 of the 100 largest U.S. metro areas.

Not all major metro areas are seeing growth in credit union branches, however. A total of 45 metro areas saw contracting numbers of credit union branches over the 2014-2019 period, with Ohio and Pennsylvania hit especially hard by losses.

Key findings

  • Credit unions increased their footprints in exactly half of the 100 largest U.S. metro areas we analyzed. There were no changes in another five metros, and the number of branches decreased in 45 metro areas.
  • Accounting for population growth, credit unions increased their footprints on a per capita basis in 32 metro areas.
  • The number of credit union branches in Fort Myers, Fla., jumped an astounding 59% between 2014 and 2019, and grew 39% on a per capita basis.
  • Daytona Beach, Fla., and Charleston, S.C., saw the second and third largest branch growth rates, respectively, at 28% each. That represents growth in branches per capita of 17% and 16%, respectively.
  • Augusta, Ga., saw nearly one in four of their credit union branches shuttered in the last five years, which represented a 27% loss in branches per 100,000 residents.
  • Scranton, Pa., and McAllen, Texas, lost 20% of their branches over the last five years, a 19% and 24% loss in branches per capita, respectively.
  • America’s largest cities are losing credit union branches: The nine largest metros all lost branches.

Where credit unions are opening branches

Residents of sunny Florida may find they have plenty of credit union options available to them. Four metro areas in Florida found spots on the top ten list of where credit unions are expanding their branch networks.

Fort Meyers and Daytona Beach, Fla., held the number one and two spots, respectively. The number of credit union branches in Fort Myers grew a whopping 59% between 2014 and 2019. Daytona Beach saw a high rate of growth during that time period too, a 28% gain. Sand, surf and credit unions. What’s not to love?

Credit unions seem to be a growing trend in the south. Tennessee and South Carolina metro areas also made the top 10, meaning 60% of the top ten metro areas for credit union growth were in the south.

Where credit unions are closing branches

The trend of growing credit unions doesn’t touch every area of the country. In fact, quite the opposite is occurring in locations like Augusta, Ga., which lost around 25% of their credit union branches in the last five years.

Scranton, Pa., and McAllen, Texas, also experienced 20% contractions in the number of credit union branches. Pennsylvania and Ohio have been hit harder than other states by branch loss in recent years — as have some of America’s largest cities, including New York City and Los Angeles. The nine largest metro areas in the United States have lost credit union branches in the past five years.

Why credit unions acquire banks

In the past, most credit unions expanded by acquiring other credit unions. But in recent years, it has become increasingly common for credit unions to buy community banks. Acquiring banks helps credit unions expand, but purchasing small banks may be the key to their success.

Similar to credit unions, small community banks often have more personal relationships with their customers than large banks. These shared values would, in theory, help acquisitions between credit unions and small banks go more smoothly.

Credit unions vs. banks

For some communities that have lost access to bank branches, credit unions have swept in to fill the void. Daytona Beach and Melbourne, Fla., were two metro areas that found a spot in the top ten metro areas that lost bank branches from 2008 to 2018. In 2019, both of those locations fall within the top ten locations where credit unions are building branches.

Bank mergers are notorious for leaving communities underbanked. Large banks generally have higher fees and higher minimum required balances for deposit accounts compared to small banks. When there is a bank consolidation, it often becomes more expensive for low-income households to maintain bank accounts.

There is an existing pattern of deposit account fees and minimum required balances increasing after the acquisition of small banks by large banks. This occurs less when other small banks are the ones acquiring banks.

In 2017, the Federal Deposit Insurance Corporation (FDIC) found that 6.5% of households in the United States were unbanked, affecting approximately 8.4 million households. An additional 18.7% (24.2 million) of U.S. households were underbanked. The term underbanked refers to households that have a checking or savings account but have also obtained financial products and services outside of the banking system.

Credit unions have also been merging, but they may not be closing branches in the way that merging banks do. This may be because credit unions are purchasing other credit unions that have geographic radii away from the acquirer’s base. The National Credit Union Association approved 192 consolidations in 2018.  Mergers were approved for a variety of reasons such as declining membership.

The benefits of banking with a credit union

For many, banking with a large bank chain might not be the best or preferred option. This is not just for financial reasons, but also for more personal ones. The FDIC’s 2017 National Survey of Unbanked and Underbanked Households found that some of the main reasons people don’t have bank accounts include:

  • Don’t have enough money to keep in an account: 52.7%
  • Don’t trust banks: 30.2%
  • Avoiding banks provides more privacy: 28.2%
  • Account fees are too high: 24.7%
  • Account fees are unpredictable: 20.2%

Other reasons respondents offered in the report include problems in the past with bank accounts, problems working with banks that don’t offer needed products or services and inconvenient bank hours and locations.

Credit unions may be a more desirable banking option for many people, as they often address some of these top complaints. Credit unions generally offer higher interest rates on their deposit accounts and more affordable loan products. The Credit Union National Association (CUNA) found that on average, households save $214 per year when banking with a credit union.

Other benefits of banking with a credit union may include a stronger sense of commitment to the community and a willingness to work with those who have poor credit histories. These benefits may be helping credit unions grow as banks continue to struggle.

Methodology

Analysts mapped branch addresses reported by state and federally chartered credit unions in their June 2019 call reports to the National Credit Union Administration to the addresses reported in June 2014 call reports and then compared the changes in the total number of credit union branches in the 100 largest metropolitan areas in the United States.

Branches per capita was calculated as the number of credit union branches per 100,000 residents in each period. Population data for the 2019 calculation was the July 2018 (the last available) U.S. Census Bureau’s American Community Survey, and July 2013 for the 2014 calculation.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jacqueline DeMarco
Jacqueline DeMarco |

Jacqueline DeMarco is a writer at MagnifyMoney. You can email Jacqueline here

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Study: Rent Is Higher Than Minimum Wage Pay in these 16 Cities

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Rent prices have increased by 2% to 4% nationwide each year since 2011, according to CoreLogic. While gains in federal and state minimum wage rules have somewhat mitigated the bite for lower-wage earners in certain areas, it’s often not enough to compete with the rising cost of housing. Meanwhile, the population of renters has increased, forcing renters to compete for a finite supply of rental housing, which is already pricing out some people.

Using data from the Joint Center of Housing Studies and the Economic Policy Institute, MagnifyMoney identified 16 cities where the median rent claims all of a minimum wage worker’s take-home pay, and then some. Let’s take a look at big cities that are more affordable and ones where the rent is too darn high.

Key findings

  • Austin, Texas, is the least affordable major U.S. city for minimum-wage workers. Austin’s median rent is equal to 143% of take-home pay at the minimum wage.
    • The median rent in Austin is $1,220 per month, while the city’s minimum wage stands at $7.25 an hour.
    • Austin workers making minimum wage would need to work about 200 hours a month to be able to afford the median rent of $1,220.
  • Chicago is the most affordable large city, with a minimum wage of $13 an hour. But even there, the median rent of $1,050 per month will claim 69% of a minimum-wage worker’s take-home pay.
    • In Chicago, minimum wage workers would need to work just over 96 hours to make enough to pay the median rent of $1,050.

If you are able to save some of your paycheck after rent and expenses, an online savings account with a high APY and no minimum balance may be a good place to start.

A closer look at where minimum wage doesn’t cover rent

The table below shows the median rent as a percentage of take-home pay for minimum-wage workers in 34 of the largest U.S. cities. In the top 16 cities listed, the median rent costs more than 100% of a minimum-wage worker’s monthly take-home pay.

In 12 of the 16 cities where the minimum wage to median rent ratio is the highest, minimum wage is less than $10 per hour. Half of these 16 cities earn at the federal minimum wage of $7.25.

But a higher minimum wage doesn’t necessarily translate to a lower percentage spent on rent. In San Francisco, for example, the high minimum wage of $15.59 is overwhelmed by the high median monthly rent of $1,860.

The following map offers a geographical visual of where you can expect to pay a larger (and smaller) percentage of your take-home pay on rent as a minimum-wage worker.

Of the cities we looked at, we found that median rent tends to eat up more of a minimum-wage worker’s take-home pay in the South. The Midwest, on the other hand, may be more affordable for minimum-wage workers, at least when it comes to rent.

Methodology

In December 2019, MagnifyMoney calculated the minimum wage of workers in 34 of the nation’s largest cities — those with a population of 300,000 or more in 2018 — to determine the relative affordability of rental housing. Our findings are based on data from the Joint Center of Housing Studies for median rent and the Economic Policy Institute for minimum wages. To find estimated take-home pay after payroll tax, we assumed 16% withholding in Social Security, Federal Insurance Contributions Act (FICA), Medicare and federal income tax.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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Study: The Best U.S. Cities for Working from Home

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Working from home has never been easier. Thanks to advances in technology, many professionals can plow through their to-do lists from the comfort of their couch. However, some cities are better for remote work than others.

Cities that are more appealing to telecommuters have higher earning power for the remote workers who live there and more remote work opportunities. Additionally, cities with longer commute times also make it more appealing for residents to choose to work from home.

To determine the best cities for working from home, MagnifyMoney combed through the Census Bureau’s 2018 1-Year American Community Survey. We examined the 100 largest U.S. cities by the number of workers, classifying them by metrics related to how many people work from home, their earning power and their cost of living.

Key findings

  • Gilbert, Ariz. is rated the best place to work from home, due to a sharp rise in the number of people working from home, which indicates more remote work opportunities, as well as the fact that remote workers there make $1.32 for every dollar earned by the average worker.
  • The second best place to work from home is Atlanta, thanks to factors like a rise in people working from home from 2017 to 2018 and good pay for remote workers. Additionally, local housing costs in Atlanta were equal to just 27% of earnings for the average person who works from home.
  • Aurora, Colo. comes in third, with residents who work remotely skipping out on the 30-minute average daily commute there.
  • The worst city to work from home was Toledo, Ohio, which had a low and stagnant number of people working from home, indicating few remote work opportunities. Those who do work from home in Toledo generally earned less in comparison to average earnings.
  • The second worst city to work from home was El Paso, Texas, followed by Greensboro, N.C.
  • On average, across the 100 cities analyzed, working from home tended to pay better than not working from home.
  • Overall, the number of people working from home is fairly flat, suggesting that the so-called “telecommuting revolution” has yet to come to fruition.
  • Long commutes did not necessarily translate to more people working from home. While New York and New Jersey had the longest average commutes, they did not see much of an increase in the number of people working from home.

Best cities for working from home

Topping our study’s ranking of the best cities to work from home is Gilbert, Ariz. Gilbert, a suburb located southeast of Phoenix, measures just over 72 square miles and has a population of more than 230,000.

Our study found that the average person working from home in Gilbert makes $1.32 for every dollar the average person makes, earning it a tie for the 20th spot regarding that metric. Gilbert also ranked high for two metrics measuring the city’s overall work-from-home climate. It ranked fourth for its share of remote workers, with 4.90% of residents working from home, and sixth for the percent change in the number of people working from home from 2017 to 2018, a 1.20% year-over-year increase. Additionally, the average commute time of a typical worker in Gilbert is 28 minutes, earning Gilbert the 27th spot for that metric as telecommuters are saving nearly half an hour each way.

All of these metrics contributed to Gilbert’s overall top ranking, making it a great option for telecommuters looking for a balanced lifestyle of good pay, a remote work-friendly culture and a decent chunk of time saved from commuting.

Atlanta snags the spot for the second best city to work from home, thanks to the high earning power of remote workers and a culture friendly to telecommuting. Atlanta has a high work-from-home rate, with 4.50% of people working from home, earning it a sixth-place ranking for that metric. Remote workers in Atlanta make $1.13 for every dollar the average worker pulls in, and housing costs accounted for just 27% of a remote worker’s earnings, landing it the 22nd spot for that metric.

Rounding out the top three for our study on the best cities to work from home is Aurora, Colo. Aurora’s rankings were boosted by the fact that remote workers in Aurora make $1.41 for every dollar that the average person makes — earning the city the 11th spot for that metric. The city also boasts 3.50% of people working from home, which landed it in 19th spot for that metric. Additionally, workers in Aurora had an average commute time of 30 minutes, which means, conversely, remote workers get to skip out on a half hour long-commute, earning the city the 18th spot for the commute time metric.

Overall, the best state to work remotely seems to be Arizona — three cities, all Phoenix suburbs, cracked our study’s top 10 best cities to work from home ranking: Gilbert (first), Chandler (seventh) and Scottsdale (tenth). Another state with a strong presence in our study’s top 10 best cities to work from home is Colorado, with Aurora ranking second and Denver ranking sixth.

Worst cities for working from home

The U.S. city falling to the bottom of our study’s ranking — making it the worst city to work from home — is Toledo, Ohio. Located in the northwest region of Ohio, Toledo has a population of around 276,000.

Remote workers in Toledo pulled in far less than the average worker, earning just $0.58 for every $1 earned by an average worker and resulting in the city ranking 99th for that metric. Additionally, remote workers in Toledo spent an average of 51% of their earnings on housing, underscoring remote workers’ overall low earning power. Toledo also had a staggeringly low percentage of residents working remotely — 0.90% — which indicates the poor overall culture of remote work and opportunity in the city.

The second worst city to work from home, according to our study, is El Paso, Texas. Remote workers in El Paso also had dismal earning power, with people who work from home making just $0.81 for every dollar earned by the average worker, and housing costs accounting for 45% of remote workers’ earnings. Like Toledo, El Paso also had a relatively low percentage of remote workers overall, with 1.60% of people working from home, placing the city 87th for that metric.

Meanwhile, our study found that Greenboro, N.C., is the third worst city to work from home. Greensboro ranked last for the metric measuring the growth in the number of people working from home, with 1.90% fewer people working remotely in 2018 compared to 2017, indicating a possible decline in remote work opportunity there. Remote workers also weren’t saving a particularly significant amount of time by telecommuting, with the average commute time for residents in Greensboro being just 21 minutes.

Overall, our study found that there are bad cities for working from home nationwide, from the Northeast all the way to the West Coast.

What happened to the “telecommuting revolution”?

Roughly a decade ago, as technology became more advanced and workforces became increasingly mobile, there were predictions of a “telecommuting revolution” in which more and more employees would begin working remotely.

Indeed, a recent study from FlexJobs found that between 2005 and 2017, remote work has grown 159%. However, this massive explosion in growth in the last decade and a half slowed to just 7.9% between 2016 to 2017 — evidence that the movement is losing steam.

Our study also found a fairly stagnant remote workforce in the 100 most populated U.S. cities from 2017 to 2018. Even the city that ranked first for the metric measuring the growth of the number of people working from home from 2017 to 2018 — Irvine, California — had just a 2.40% increase in the number of telecommuters. Additionally, our study revealed a slew of cities in which there were a smaller share of remote workers in 2018 than there were in 2017, including Washington D.C., Orlando and St. Louis.

While the number of remote workers might not be completely stagnant, these are certainly signs that the telecommuting movement might be slowing down. So, what’s to blame for the seemingly slowing growth of the “telecommuting revolution”? One explanation might be linked to perceived worker productivity. In 2013, for example, Yahoo yanked its employees’ remote privileges and shortly after cited increased levels of productivity and employee engagement.

Additionally, a 2018 survey from Randstad USA found that employees might not be buying into the idea either. While 82% of workers said being able to work from home helps them maintain their work-life balance, 62% said they still prefer working in the office, a number that was even higher among younger generations.

Advantages and disadvantages of working from home

As is the case with clocking your 9-to-5 hours in a cubicle, there are both advantages and disadvantages to working from the comfort of your couch.

Advantages of working from home

  • Potentially higher pay: Our survey found that in many cities, remote workers raked in more money than non-remote workers. For example, in Norfolk, Va., the average remote worker made $1.68 for every dollar earned by the average worker. One reason for this could be that, according to the BLS, the more popular occupations for remote work include jobs in management, business and finance, all of which tend to be higher-paying.
  • Money saved on transportation: The cost of commuting is not something to overlook. Depending on the state in which you live, you could spend between $2,000 to $5,000 a year on commuting costs. Working from home enables you to save thousands of dollars a year.
  • Money saved on childcare: One of the biggest incentives for working from home is the flexibility it allows — especially for parents with kids to care for. For working parents, the cost of childcare can add up to hundreds of dollars a week. If a parent works from home, they might be able to avoid paying for a daycare service or nanny.

Learn how you can maximize your savings with the best online savings account offers. 

Disadvantages of working from home

  • Strain on relationships with colleagues: Working from home could have a negative effect on your relationships with your colleagues. At least one study has found that remote workers were more likely to report that their co-workers treat them poorly and exclude them.
  • Lack of work-life balance: When your home doubles as your workspace, it can be difficult to unplug. Indeed, one survey from Remote.co found that unplugging after work hours is the biggest challenge among telecommuters. Achieving a healthy work-life balance when you work from home can certainly be a challenging obstacle to overcome.

Methodology

For our study, we looked at data from the 2018 Census Bureau’s 1-Year American Community Survey. Metrics analyzed included:

  • The percentage of people who work from home.
  • Earnings for people working from home relative to average earnings of local workers.
  • The percentage point change in the share of workers working from home from 2017 to 2018.
  • The percentage point change in earnings for people who work from home from 2017 to 2018.
  • Housing costs as a percentage of income for people working from home.
  • Average commute time.

To create the final rankings, we ranked each city in each metric. Using these rankings, we created a final index based on each city’s average ranking. The city with the best average ranking received the highest score, while the city with the lowest average ranking received the lowest score. The cities were then indexed based on the best possible score.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sarah Berger
Sarah Berger |

Sarah Berger is a writer at MagnifyMoney. You can email Sarah here