Banks saw opportunity in COVID: to shutter branches, hastening a shift to online banking. It’s been hard on small businesses, older people & those who rely on public transit:
In July, on a day so hot people ran errands only if they had to, a steady flow of customers pulled up to the Bank of America branch in Winthrop center. No tellers or loan officers worked inside — their absence felt since the start of the pandemic — but the two cash machines in the lobby were busy. By day’s end, the branch would close permanently, even its ATMs.“Today was the last day this one’s open,” she said.
“Whether it was intentional or not, given who does online banking, very likely it will have a disproportionate effect on lower-income people in neighborhoods,” said former Congressman Barney Frank, a longtime advocate for fair lending and banks treating customers equitably. Bank of America, which reported profits of $32 billion last year, has permanently closed 39 branches in Massachusetts, one quarter of those in low- or moderate-income areas. But the overall impact has been greater because the bank also kept more than 20 branches “temporarily” closed during COVID — some for over two years as of early September.
“The in-person service was totally closed, and [they] were directing customers to the lobby for the ATMs,” George said. He experienced that himself, while trying to make deposits for his group, and had to explain to a bank staffer that as a small enterprise he didn't have an ATM card. Bank of America did not comment on reasons for closures or lack of in-person services at specific branches. According to spokesman Matthew Card, temporary shutdowns came in places where the bank saw fewer customer visits, or when a larger location was available nearby that allowed for physical distancing. The bank also has had trouble staffing some branches due to COVID.
Card said the bank maintains about 30% of its branches in low- and moderate-income communities nationally, including in Massachusetts. He said the bank remains committed to its physical presence in the state, with about 160 branches and almost 1,000 ATMs.While national banks must get regulatory approval to open branches, very little is required of them to close branches.
In a statement, Santander spokeswoman Nancy Orlando said, “We constantly re-examine our branch network in light of changing customer preferences.” She also said, “These efforts have included some branch consolidation.” a spike in branch closures far larger than they'd expected during the pandemic. While banks eliminated 11,820 branches nationally in the 10 years before COVID, they closed more than 4,000 just from March 2020 through October 2021.
Van Tol noted that cutting services at branches can become a self-fulfilling prophecy, driving customers away if there are long lines and insufficient staffing. "There’s a recognition that banking is evolving away from branches. And some of that is probably understandable and appropriate, given changes in technologies. But especially in low- and moderate-income communities, that is going to reduce access."Federal banking regulators are working to update CRA, in part to reflect changing technology and the decline in physical branches. But closing offices does not relieve a bank of its obligations to customers.
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