In a worrying trend, 64 US bank branches have filed for closure in a single week, leading to questions about the impact on consumers. Prominent banks such as PNC Bank and JPMorgan Chase are among those shutting down multiple branches in various states. According to data from the US Office of the Comptroller of the Currency, Pittsburgh-based PNC Bank topped the list with 19 closure filings, followed closely by JPMorgan Chase with 18. Citizens Bank, US Bank, and Bank of America have also submitted closure requests.
Most of these closures are strategically concentrated across multiple states. PNC Bank’s closure filings include branches in Pennsylvania, Illinois, Texas, Alabama, New Jersey, Indiana, Ohio, and Florida, while JPMorgan Chase has filed for closures in Ohio, Connecticut, South Carolina, and other states. Citizens Bank announced eight closures, primarily in New York and Massachusetts, while US Bank made seven filings, including branches in Tennessee, Missouri, Wisconsin, Ohio, and Illinois. Bank of America closed five branches, including locations in New York, Texas, Massachusetts, and California.
These closures follow a disturbing long-term trend that has seen a significant number of bank branches shutting down in recent years. Data from the National Community Reinvestment Coalition reveals that between 2017 and 2021, 9% of all bank branches nationwide closed their doors permanently. During the COVID-19 pandemic, this closure rate doubled, with a staggering 3,012 branches shutting down last year alone and only 958 new branches opening, resulting in a net loss of 2,054 branches. It marks the third consecutive year with a net closure exceeding 2,000 branches.
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The surge in closure filings can be attributed, in part, to the increasing popularity of digital banking, a trend that accelerated during the pandemic. More Americans are opting to manage their finances using mobile devices, thereby reducing their reliance on physical bank branches. According to a survey by the American Banking Association, eight in ten Americans used a mobile device to manage their bank accounts at least once in the previous month.
While banking institutions have touted the convenience and security of digital banking, many are concerned about the potential negative effects of branch closures, particularly in small towns. When bank branches close, it often results in a decline in small business lending and activity within the area. Moreover, consumers in these regions may be forced to turn to alternative financial services that could expose them to unregulated and predatory practices.
The closure of bank branches also has implications for employment and local communities. When a branch shuts down, important commercial tenants and employers are lost, exacerbating the economic challenges faced by these areas. The National Community Reinvestment Coalition warns that as bank branches become scarcer, more individuals may find themselves unbanked or underbanked, thus impeding their access to essential financial services.
PNC Bank, in particular, has been aggressively pursuing cost-saving measures, with 19 branches set to close in locations such as Pennsylvania, Alabama, Texas, New Jersey, Florida, and more. These closures are part of the bank’s broader strategy to focus on online banking services, aiming to make 60% of its banking business exclusively digital. However, concerns have been raised, stating that the loss of physical branches may limit customers’ access to crucial banking services, especially in rural areas where digital connectivity might be limited.
As the wave of bank branch closures continues keep a close eye on the impact on consumers, small businesses, and local communities. The potential consequences of restricted access to financial services in certain areas raise concerns for those who emphasize the importance of maintaining a robust physical banking presence alongside the advancements in digital banking.