JPMorgan Chase planning push in banking deserts
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JPMorgan Chase wants to replenish banking deserts — areas with very low branch access in the U.S. — by opening nearly 100 new locations in low-income areas, WSJ reports.
Why it matters: The pandemic accelerated the trend of bank branch closures, which have disproportionately impacted communities with high concentrations of lower-income, Asian, Black and disabled residents, many of whom still prefer to bank in person.
- By the numbers: A recent study from the Philadelphia Fed shows that areas of the country that are predominantly Asian and Black saw the biggest declines, -7.6% and -6.6%, respectively, in local bank offices between 2019 and 2023, compared to the country's overall change (-5.6%).
- And the only group that gained banking deserts significantly faster than the 6.4% overall national rate were majority-Black communities (+10.1%).
Flashback: Bank consolidation in the wake of the Great Recession and a rise in mobile banking businesses kicked off the wave of branch closures more than a decade ago.
- The trend picked up pace during the pandemic as banks shrank their physical footprint to cut costs.
The latest: As of Q2, Wells Fargo, PNC and U.S. Bank closed the most number of local outposts over the past 12 months.
- JPMorgan Chase bucked the larger trend and opened three, and it's said it plans to add more than 500 over the next three years.
- Over the past five years, the company has also been testing a branch format that features added public spaces for financial literacy workshops and small businesses.
What they're saying: "If they didn't work, we wouldn't do them," JPMorgan Chase CEO Jamie Dimon told WSJ about expanding the format nationwide.
