Low-Income Neighborhoods Can't Bank on Anything

By Shannon in News on Mar 31, 2007 6:22PM

We may have a warped view of Chicago sometimes, but it seems like one trend we notice is that whenever new construction goes up, one bank branch or another is part of it. Gas station torn down at Fullerton & Southport? Replaced by a TCF Bank. Huge construction project (that looked vaguely like a castle as it was going up) at Diversey & Ashland? Lakeside Bank. New office tower at Dearborn & Madison? Fifth Third Bank on the ground floor. Yet, an investigative report released by Washington-based National Community Reinvestment Coalition says nay, we need more bank branches ... just not where they're going up now.

According to the report, 24 out of 25 major metropolitan areas have less banks per person in urban areas than in less-dense suburbs. A bigger cause for concern is that consumers in low- to moderate-income and minority areas have less bank branches to choose from, compared to middle- to high-income consumers. Reminds us of a Heckler article about another ATM opening up in a Wrigleyville resident's living room. But we digress. The NCRC notes that due to the lack of branches in less desirable areas, consumers are forced to seek out loans from mortgage brokers and resort to check cashers and payday-advancing stores for money. Those services often cost more than comparable ones found at banks.

We might not make out as badly as some other places, like New York or L.A., but there's really no winner in this kind of race. We already have the shame of "food deserts" in minority neighborhoods hanging over our heads; a "banking desert" isn't really what we need. As opposed to food deserts, however, a bank desert seems like it'd be easier to overcome. Just look at Bank of America.

Image courtesy of abmarfia.