Banks closing branches in poorest U.S. nabes

February 23, 2011 02:21PM

Banks have been shuttering branches at a heightened pace in the wake of the financial crisis, and that trend is disproportionately hitting low- and middle-income neighborhoods nationwide, according to the New York Times. In fact, although banks shuttered more branches overall than they opened in 2010 — the first time that’s happened in 15 years — they actually expanded their presence in the wealthiest areas. Government regulations stipulate that financial institutions serve poor neighborhoods, but banks are nonetheless expected to continue shuttering branches in the neediest areas in the coming years — an attempt to cut costs in the fact of restrictions on overdraft fees typically targeted at their low-income customers. Between 2008 and 2010, the number of bank branches in neighborhoods with a median household income of below $50,000 declined by 396, while in neighborhoods where the median household income was above $100,000 saw 82 branches added. The declines have advocates worried that predatory lenders will step in to fill the need for brick-and-mortar banking in the areas that are lacking. [NYT]