A growing proportion of Americans lack access to even the most fundamental banking services as major US banks continue to shutter branches around the country.
According to a notice sent by the Office of the Comptroller of the Currency (OCC) on Friday, Bank of America closed 21 branches in the first week of October.
There were 15 bank branches that Wells Fargo closed, while US Bank and Chase reported cutting 9 and 3 branches, respectively.
About 54 locations either closed or announced they would be closing between October 1 and October 7. Three of the total closings occurred in Kentucky’s Louisville. California was home to eight of Bank of America’s 21 closings.
On Friday, major financial institutions in the United States released their financial results for the third quarter. Both banks’ earnings grew as a result of the rise in interest rates.
Studies found that 51% of consumers were very or somewhat concerned about the falling number of bank branches, this month’s closures come as no surprise. Only 18% of respondents indicated they were completely unconcerned.
The survey also discovered that black Americans face greater barriers when trying to obtain brick-and-mortar services. Compared to only 8% of white Americans, 14% of black Americans reported not having a local branch.
Major US banks are continuing to close branches across the US, leaving an increasing number of Americans w/out access to basic financial services
— Michael Rae Khoury (@Vltra_MK) October 13, 2023
54 locations in the last week 👀
The Cyber & Certificate Authority madness hasn't even started yet!
Financial Storm = en route ⛈️ https://t.co/XpXo4vGY3a pic.twitter.com/iwisXgHZLG
Sen. Sherrod Brown (D-Ohio) wrote to the OCC in March to request an investigation into how bank closures affect low-income neighborhoods.
The OCC must be notified whenever a bank closes a branch. OCC appreciates the importance of bank branches and is committed to ensuring access to banking services in all areas, a spokeswoman stated.
They further pointed out that the law that mandates notification of the ‘main regulator of closures’ for banks and credit unions does not give the regulator the right to object to the closure.
It was also pointed out that not all US banks are subject to OCC oversight.
According to S&P Global Market Intelligence, 1,144 national and regional banks shut down in 49 states between January 1 and July 31, with the rate of closures being higher in some regions than others.
It’s a zip code lottery for Americans nationwide when it comes to getting inside a branch.
Studies where conducted covering the period of January to August of this year and found that the state of New Jersey has the greatest rate of bank failures compared to other US states.
About nine locations were shuttered for every one million New Jersey residents. After that came Connecticut, North Dakota, and finally Virginia.
Vermonters, on the other hand, were spared the worst of the bank branch closure massacre, as none of the state’s branches were shuttered during this time.
There was fewer than one branch closure for every one million people in each of Nebraska, West Virginia, South Carolina, and Idaho.
The Covid-19 epidemic was a major impetus for banks to abandon physical locations in favor of digital services.
Fear of spreading the virus discouraged households from exchanging cash and instead prompted the rise of digital payment apps like Venmo and Block Inc.’s Cash App.
Digital transactions increased by 12.4% year-over-year in Q1 2020, according to a Federal Reserve research.
