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Study finds banks less available to working-class and minority communities

By: National Community Reinvestment Coalition

A new report by the National Community Reinvestment Coalition finds that most of the largest metropolitan areas of the United States have markedly lower numbers of bank branches in working class and minority communities than in the upper class and white neighborhoods.

"Are Banks on the Map? An Analysis of Bank Branch Location in Working Class Neighborhoods" draws the clear connection that without access to basic banking services, modest income families spend more of their limited resources for simple financial transactions.

“Despite the purchasing power that is clearly available in urban areas, these emerging markets have been left out of the mainstream banking industry,” says John Taylor, NCRC president and CEO. “Without banks in the neighborhood, un-banked families are paying exorbitant fees for services that are practically free for the rest of us. How can anyone climb out of poverty if they have to pay $35 to a check casher on a $585 payroll check?”

In "Are Banks on the Map?," NCRC surveys 25 of the largest metropolitan municipalities, including their surrounding areas (MSAs), and maps out the number of bank branches located in communities based on income-level and minority population. This report shows in 24 out of 25 MSAs, urban areas that have dense populations have fewer bank branches – therefore fewer mainstream banking opportunities – than the less populated suburbs. Without the ability to build relationships with the regulated banking community, working class and minority neighborhoods are more likely to use “fringe” services, such as payday lenders and pawnshops, for small loans. They are also more likely to have their home loans originated with mortgage brokers and subprime lenders, which often led to foreclosures and unmanageable monthly payments.
“There are an estimated 14 million US households that do not have regular access to bank services,” says Taylor. “If banks develop and expand their products needed by these communities, they would be helping themselves and the people they’re chartered to assist.”

At the top of the list with favorable bank branch/customer ratio, San Francisco, Miami, and Boston had higher than average number of branches in minority neighborhoods, whereas when controlling for income Houston, New York, Los Angeles and Chicago had relatively fewer.

Based on the findings in this report, NCRC calls for more attention to be directed to the regulated and unregulated financial services available in these communities and for the strengthening of the Service Test of the Community Reinvestment Act (CRA). CRA requires banks to meet the needs of the communities in which they are located. By enhancing the Service Test, the public will be able to adequately measure the number of branches in various communities to evaluate whether banks are providing the quality and quantity need in those areas.

Click here to read the study.

About NCRA
The National Community Reinvestment Coalition is a national non-profit membership organization that promotes economic justice and equal access to credit, capital and financial services to traditionally underserved communities. For more information on NCRC, visit or call 202-628-8866.