Study: More banks for the rich, fewer in low-income areas
Despite recent cutbacks, the number of U.S. bank branches is significantly higher now than six years ago—but only in more well-to-do areas, The Los Angeles Times reports. A new study from SNL Financial finds the number of bank and thrift offices has risen 8.4% since 2006 in areas with median incomes of $100,000 and up—but has fallen 1% in areas with median incomes of less than $25,000. "We are very concerned that regular folks who may not happen to have a lot of money are being pushed methodically out of mainstream banking," says Alan Fisher, executive director of the California Reinvestment Coalition. "The regulators allowed subprime and expensive credit card lending, and now they are standing by while the financial divide widens through the methodical efforts of the big banks to serve the wealthy and exclude those who are not." But industry officials are taking issue with the study, noting many big banks made acquisitions of others during the financial crisis—such as Wells Fargo & Co.'s takeover of Wachovia Corp.—which resulted in many closures because the surviving bank wound up with overlapping offices. Bank consultant G. Michael Moebs of affluent Lake Bluff, Ill., says the study is skewed because its time frame started with 2006, a record year financially for many banks, and then included years of extreme stress for the industry. Read the full story for all the details here.
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