Federal inquiry's final report calls on regional communities to be shielded from further bank closures (2024)

A Senate committee's final report looking at the impact of bank closures in regional communities says Australians will continue to "pay the price" if regulations are not changed to limit branch closures.

It said private banks have failed regional Australians, and residents will continue to suffer without material change.

Since February 2023 the committee, under the title Bank closures in regional Australia,received more than 600 submissions, held 13 public hearings, and toured regional Australian towns where local branches have closed.

Its final report was handed down on Friday and made eight recommendations to the federal government, urging action to stem the impacts of regional bank closures.

"It is clear that the current model of banking industry self-regulation has failed to shelter regional Australia," the report said.

The committee found banks had "little incentive" to keep branches open.

It found "without regulatory intervention, banks will continue to close branches and communities will pay the price".

Almost 800 branch services have closed in regional areas between June 2017 and June 2023 according to data collected by the Australian Prudential Regulatory Authority.

That number accounts for more than one third of all regional bank branches.

Federal inquiry's final report calls on regional communities to be shielded from further bank closures (1)

The report from the Senate committee recommended the federal government guarantee "reasonable access to cash and financial services for all Australians".

It also recommended the government investigate the feasibility of a publicly-owned bank and set up a Regional Community Banking Branch Program (RCBBP).

"The objective of the RCBBP would be to help underwrite the establishment of community bank branches providing in-person banking services in regional, rural, and remote Australia," the report said.

"Local communities would be required to raise their own capital as well, but the government contributions could help lower the required amounts."

The committee reaffirmed its view that access to cash was vital to regional communities.

"Consideration could also be given to using this fund to help enhance financial services available at Australia Post," it said.

Face-to-face, cash services vital

The report noted that while cash use was declining across the country, cash and face-to-face banking were still important for many regional communities.

"Bank branch closures are devastating to many regional and remote communities," the committee's report said.

"Along with an increased need for cash, regional and remote communities are more dependent on face-to-face services.

"Many have a higher proportion of elderly, Indigenous, and/or disabled populations, and may be particularly exposed by bank branch closures."


The committee said vulnerable residents and small businesses can be left "high and dry" or forced to drive hundreds of kilometres to the nearest bank.

"As well as disadvantaging individuals living in regional and remote areas, bank branch closures — particularly the closure of a community's last bank — often have a devastating effect on the town's morale," the report said.

"The committee believes Australia's banks are failing to take these impacts seriously.

"In many cases, banks are simply walking away from communities where they have been a mainstay for decades."

In a statement provided to the ABC, the Australian Banking Association criticised the committee's recommendations.

"This report ignores the fact that 98.9 per cent of banking transactions now take place digitally and is driving reductions in branch visits, which have reduced by almost 50 per cent in recent years," the statement said.

The association warned against the idea of a public bank.

"Given the past catastrophic failures of state-owned banks in this country, Australians should be wary of suggestions of a new taxpayer-funded government-owned bank," it said.

"Further, a large government-owned bank would put the ongoing viability of the many small and medium sized banks that serve customers in regional and rural Australia at serious risk."

Pilbara community an example of pressures felt

The idea of a community-managed bank has previously been floated by Western Australia's Shire of Ashburton.

The shire, roughly the size of Bulgaria, has been without a branch since late 2022 and wants to see banking services provided through local government assets.

Committee member Matt Canavan heard stories from residents across the country but said one that stood out came from Tom Price, the largest town in Ashburton shire.

"It's in a major wealth-producing part of the nation, their shire produced two per cent of our nation's annual economic output," he said.

"Their closest bank branch is a 5 or 6 hour drive away across unsealed roads.

"So a lot of small businesses drive an hour to an airport in Paraburdoo and fly to Perth with suitcases full of cash, just to deposit their takings."

Federal inquiry's final report calls on regional communities to be shielded from further bank closures (2)

The committee travelled to the mining town of Tom Price in the Shire of Ashburton earlier this year and heard from residents about the challenges they faced since Westpac closed in 2022.

"Committee members were moved by challenges faced in [Tom Price] and the lack of support provided by the banking industry," the report said.

"The committee heard that every worker in the Shire of Ashburton produces almost 11 times the Australian average in value."

The resource-rich shire, with a population of around 20,000 people, produces nearly 12 per cent of WA's gross domestic product, largely through iron ore mining.

"This local government area, larger than some countries, has no bank branch," the report said.

Inadequate consultation upon leaving

The Senate report also recommended a code of conduct be developed that would force banks to undertake "meaningful consultation" with communities before a branch is closed.

Federal inquiry's final report calls on regional communities to be shielded from further bank closures (3)

PilbaraInland Chamber of Commerce and Industry's Sylvia Winkler said she supported the inquiry's recommendations.

"Community-based solutions could actually help remote and regional communities access cash," she said.

"If there are ways to support community-led solutions that's absolutely something that the government should do."

Ms Winkler presented to the Tom Price hearing in March where she shared testimony of how local businesses and community members had suffered.

West Australians were shocked earlier this year when Bankwest made the announcement they would be closing all 60 of their remaining branches, with some set to transition into Commonwealth Bank branches.

Bankwest came under fire by the Senate banking inquiry following the decision, with senators suggesting the bank had not adequately consulted with local communities before announcing the decision.

The report will be tabled in the Senate and presented to the government for consideration.

Federal inquiry's final report calls on regional communities to be shielded from further bank closures (2024)


Why are all the US banks closing? ›

Brian Adams, a professor at the University of Portland, said mergers and acquisitions, the rise of online banking, inflation and interest rates have all contributed to the recent closures.

Which banks are closing in 2024? ›

Bank of Scotland, Halifax and Lloyds to close 177 branches in 2024/25 – here's the full list, plus alternatives
  • Bank of Scotland – 26 branches closing.
  • Halifax – 70 branches closing.
  • Lloyds – 81 branches closing.

Which banks are closing the most branches? ›

More have closed since then, too. Between Bank of America, Chase, US Bank, Capital One, PNC Bank, Wells Fargo and TD Bank, another 400-plus have already closed in 2024. (Wells Fargo leads the pack with at least 88 bank closure filings, according to the Office of the Comptroller of the Currency.)

How many bank branches are closed in Australia? ›

Branch closures: 'We recognise this may be difficult'

Despite the resistance, bank branches are coming down fast. In 2022, CHOICE reported that 575 bank branches had closed between 2017 and 2021, and more than a third of ATMs in rural areas were shut down.

What happens to your money if a bank closes? ›

For the most part, if you keep your money at an institution that's FDIC-insured, your money is safe — at least up to $250,000 in accounts at the failing institution. You're guaranteed that $250,000, and if the bank is acquired, even amounts over the limit may be smoothly transferred to the new bank.

Why are all banks closing my accounts? ›

For instance, your bank may suspect you're a victim of identity theft or that your account is engaging in money laundering or wire fraud. Excessive bounced checks or overdraft fees: Banks often close the accounts of customers who frequently bounce checks.

What is the most stable bank in the United States? ›

JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.

Which banks are failing in 2024? ›

Republic First Bank reported unrealized securities losses in excess of its equity as early as June 2022. State regulators closed Republic First Bank in April 2024, marking the first bank failure of the year.

What banks are in financial trouble? ›

List of Recent Failed Banks
Bank NameCityState
Heartland Tri-State BankElkhartKS
First Republic BankSan FranciscoCA
Signature BankNew YorkNY
Silicon Valley BankSanta ClaraCA
2 more rows
6 days ago

Are banks going cashless? ›

More than half of all bank branches no longer handle cash. Seven out of ten consumers say they can manage without cash, while half of all merchants expect to stop accepting cash by 2025 (Arvidsson, Hedman, and Segendorf 2018).

What happens if my bank branch closed? ›

If your local bank branch closes, you might consider searching for a nearby branch, finding a convenient ATM, banking online or switching to a different bank altogether. If you're searching for options because your branch recently closed, you're not alone.

Is Australia going cashless in 2024? ›

She estimates that Australia will enter into a cashless society by 2030, slightly later than Commonwealth Bank's prediction of 2026, and argues for government regulation of digital payment services to help navigate the transition.

Why are so many US banks failing? ›

Consulting firm Klaros Group analyzed about 4,000 U.S. banks and found 282 banks face the dual threat of commercial real estate loans and potential losses tied to higher interest rates. The majority of those banks are smaller lenders with less than $10 billion in assets.

Why is the US bank crisis? ›

Triggered by sizable deposit outflows, this event raised concerns about the soundness of the rest of the US banking sector, in particular, other banks of similar or smaller size with large amounts of uninsured deposits, unrealized losses, and commercial real estate exposures.

Which US banks are in trouble? ›

List of Recent Failed Banks
Bank NameCityState
Heartland Tri-State BankElkhartKS
First Republic BankSan FranciscoCA
Signature BankNew YorkNY
Silicon Valley BankSanta ClaraCA
2 more rows
6 days ago

Is Chase Bank closing in 2024? ›

Chase bank branch closures are expected in the following California cities during 2024: Garden Grove. German Oaks. San Diego.


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