Study Finds Banks Less Available to Working Class & Minority Communities
WASHINGTON, March 29 /PRNewswire-USNewswire/ -- 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 Houston, New York, Los Angeles and Chicago
had relatively fewer in these communities.
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.
Log onto http://www.ncrc.org for the complete study Are Banks on the
Map? and see the interactive map depicting the findings in all 25 MSAs.
NCRC 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 us on line at http://www.ncrc.org or call 202-628-8866.
SOURCE National Community Reinvestment Coalition
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Related links:
http://www.ncrc.org
CONTACT:
TeAnne Chennault, of National Community
Reinvestment Coalition, +1-202-464-2718, Cell: +1-301-343-0742
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