BofA Branch Cuts: Who’s Left Behind?
By Kirsten Valle Pittman and Gavin Off, The Charlotte Observer |
Nearly a third of the closures last year occurred in low- to moderate-income communities. And while that's roughly in line with the percentage of such branches in the bank's overall network, it worries some banking experts and consumer advocates, who say eliminating bank branches has a disproportionate effect on the poor and their neighborhoods, removing important community anchors and raising the cost of banking.
At a time when big banks across the country are stepping up efforts to cater to their most profitable customers, advocates worry that others could be left behind.
"The impact to the local economies could be devastating," said
Bank officials also say they continue to maintain -- and add -- more branches in low- to moderate-income neighborhoods than other big banks. Branches in those neighborhoods, where the household income is less than 80 percent of the geographic area's median income, made up 27 percent of the bank's total network at the end of 2011. That compares with 24 percent for
Since 2009, 38 of the 117 branches
Trimming branches
The nation's second-largest lender by deposits has shed a net 262 banking centers since the beginning of 2011, from
Of those, about 17 percent occurred in areas where the household income was less than half of the county's, the data show. The bank closed a branch in a neighborhood of
Closures in low- to moderate-income neighborhoods, calculated by a different method under federal regulators' guidelines, made up 31 percent of
U.S. banks and thrifts closed more than 760 branches in the year ending
But
In spring 2011, chief executive
The bank is shedding branches through sales, in addition to closures: In April, it announced it was selling 15 locations in
Going high-tech
Consumer banking executive
The bank plans to expand its coverage in top metropolitan areas and other places where it has a strong customer base and strong presence, she said. It's also ramping up technology and services and adding specialists who can "serve as a bridge to refer people to other parts of the bank," in some existing locations.
In early 2011, for instance, the bank began testing "specialty" branches in
The changes highlight a shift in consumer preference and bank strategy, executives have said. Year over year, foot traffic at
"In any retail network, you have to look at your network and adjust it as it makes sense, based on the changing market," bank spokeswoman
She said the bank considers multiple factors beyond raw numbers, from economic conditions to the "changing dynamic of our customers."
And it's hiring more employees who will interact directly with customers at branches. The bank will have hired 1,000 new small-business bankers and 1,700 financial solutions advisers by year's end, Pace said.
The changes mean that when a branch closes, it doesn't necessarily put customers in that area at a loss, she said. The bank is bringing more services closer to its customers, Pace said. And in some cases, big banks close branches to eliminate duplication, not to exit an area altogether -- meaning another location might be a few blocks or miles away.
Losing an anchor
Still, critics worry that the shift will leave smaller and less affluent markets behind. According to a recent report from the
"The bank branch, more so than any other business, is an anchor tenant for a neighborhood," coalition CEO
When a branch closes, small businesses often move down the street to the mall or to other neighborhoods, he said. And "hybrid lenders" -- from payday lenders to pawn shops -- take their place, offering banking services at higher costs.
Williams, the
Beyond serving customers or anchoring neighborhood shopping centers, visible bank branches are critical for encouraging upward mobility, educating people about banking principles and the importance of saving, he said.
"Think about the community you grew up in," Williams said. "The branch was a community center."
But community members and advocates remain concerned about a pullback in banking centers, Rust said. Business owners are among the most upset, he said, occasionally calling him to complain about having to drive miles away to deposit cash at the end of the day.
"When people call me, they're always surprised that it happened," he said. "They can't imagine why a bank wouldn't want to be in their community."
Pittman: 704-358-5248
___
(c)2012 The Charlotte Observer (Charlotte, N.C.)
Visit The Charlotte Observer (Charlotte, N.C.) at www.charlotteobserver.com
Distributed by MCT Information Services
Source: | McClatchy-Tribune Information Services |
Wordcount: | 1571 |
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News