According to S&P Global data analyzed by Bloomberg, banks have shut 1,915 more branches in lower-income areas than they opened between 2014 and 2018, with J.P. Morgan, Wells Fargo, and Bank of America at the front of the trend.
There are broad implications for neighborhoods when branches close. Less competition means fewer choices for banking services and, potentially, higher costs as a result. According to a 2014 study by economist Hoai-Luu Q. Nguyen, now an assistant professor of business at the University of California, Berkeley, the number of small business loans made drops by 13% for several years and isn’t offset by the entry of other banks.
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