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Bank branch closures continue at alarming pace

There was a 5.13% loss of bank branches across the United States from 2017 through the third quarter of 2020, a new analysis found. 

The analysis, from the National Community Reinvestment Coalition (NCRC), revealed a net loss of bank branches in every state over the four-year time period. Since 2017, more than 4,400 branches were lost across the country, bringing the total number of branches closed since the Great Recession started in 2008 to over 13,000.

Nationally, low- and moderate-income (LMI) neighborhoods lost as many as 6% of their branches, higher than the overall national average, with state and local impacts showing significantly higher losses. For example, in Alaska, almost 18% of branches that existed in medium- to high-minority (MHM) communities were lost. In Idaho and Hawaii, the number of branches that existed in LMI neighborhoods in 2017 declined by up to 16% by 2020.

While mobile and internet banking are often cited as the key drivers of bank branch closures, the rapid pace of bank mergers since the Great Recession are more likely the driving factor in many closures.

“The impact of these closures is severe, especially on rural and lower-income urban communities where few branches exist at all,” said Jesse Van Tol, CEO of NCRC. “These communities are left vulnerable to payday lenders, online installment lending and contract buyer scams. These closures also make it harder for local businesses to secure loans to expand their business, and in high minority and low- to moderate-income communities that already lack many branches even a small loss is particularly concerning.”

However, since the start of the pandemic, the rate of closure appears to have fallen off when compared with previous years, with July seeing a net increase of 34 new branches, and August and September seeing smaller losses compared to recent years. This suggests that the pandemic may have slowed the rate of closure, at least temporarily. There are several possible explanations for this, and it is still possible for this trend to reverse itself, so further analysis is warranted. 

To read the full report:

Research Brief: Bank Branch Closure Update (2017 – 2020)

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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