Weiner:More Bank Branches,But Not For The Poor
Congressman Anthony Weiner, a member of the House Energy and Commerce Committee, along with Council Member Letitia James (WF- Clinton Hill), released a report on Monday that has found that since the year 2000, the number of bank branches in New York City has increased by 338, or 27 percent. But in the midst of this boom, New York City's low-income neighborhoods are being left behind. The study found that over the last six years, the 20 wealthiest neighborhoods in the city have gained 88 more banks; while only nine additional banks stand in the poorest 20.
The number of bank branches in New York City has increased by 27 percent since 2000, which contrasts sharply with the previous five-year period. From 1995- 2000, the number of banks actually fell by 11.5 percent. Unfortunately the boom has largely been concentrated in wealthy neighborhoods, leaving low-income New Yorkers without the benefits a financial institution can offer.
Access to banking institutions and their credit and investment capital is essential to create and retain jobs, develop affordable housing, and support small businesses. But, banks in this city are disproportionately serving wealthy New Yorkers. For instance, there is a bank for every 4,035 New Yorkers living in neighborhoods with a median household income above $30,000 - but there is only one bank for every 10,447 people in neighborhoods with a median household income below $30,000.
Further, over the last seven years, the number of banks in the Bronx, the borough with the lowest median income, only grew by 24. The number of bank branches in Manhattan increased by 168.
"Poor neighborhoods in this city are being squeezed out of the benefit a local bank can provide," said Rep. Weiner. "We need better incentives and stronger regulatory authority to increase the presence of banks in neighborhoods that need them the most. Banks can't keep getting a free pass when they are not meeting standards set by Congress."
Highlights of the
In the last six years, in neighborhoods where the median income is above $35,000, there are 263 more banks, whereas neighborhoods with a median income below $35,000 have only gained 75.
In Brownsville, Brooklyn, which has a median income of just over $20,000, residents are served by only three banks, down from four in 1995. In Murray Hill, Manhattan, with a median income of $66,000 there are 33 banks currently open, which is up from 24.
Since the year 2000, over half of the net growth of banks occurred in Manhattan. In comparison, the number of bank branches in the Bronx only increased by 24. That means one new bank for every 55,527 Bronx residents, versus a new bank in Manhattan for every 9,149 people.
In Brooklyn, the city's largest borough, the number of additional banks is almost three times fewer than in Manhattan.
Washington and Albany have both established programs meant to encourage banks to provide services in poorer neighborhoods - but they have proven to be insufficient. The New York State Banking Department offers tax breaks, job training, and public fund deposits to banks that set up shop in underserved communities. And in 1977, Congress created the Community Reinvestment Act (CRA) to prohibit financial institutions from underserving low-income areas and ensure equal access to housing finance resources, consumer and business lending, community investments, and low-cost services.
Four federal agencies were selected to rate banks on their effort to serve the needs of low-income neighborhoods. But the regulators, representing the Federal Deposit Insurance Corporation (FDIC), Office of Thrift Supervision (OTS), Office of Comptroller of the Currency (OCC), and The Federal Reserve (The Fed) rated over 98 percent of banks as either Outstanding or Satisfactory, even though the banking industry continues to deny the mortgage loan applications of African- Americans and Latinos twice as frequently as those of whites. Further, the agencies are largely without the authority and power to require banks to open branches in underserved areas.