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Bank Branches Disappear From Poor Neighborhoods Like Longwood, Bronx

The same areas were targeted by predatory mortgage lenders
Pawnshops, gold-buying stores, and check-cashing services abound in the Longwood area in the Bronx
Pawnshops, gold-buying stores, and check-cashing services abound in the Longwood area in the BronxPhotographs by Clement Pascal for Bloomberg Businessweek

After opening more than 15,000 branches across the U.S. in the decade leading to the financial crisis, banks are retreating from lower-income neighborhoods, even as the industry posted its second most profitable year on record. Lenders have shut 1,826 branches since late 2008, and 93 percent of closings have been in postal codes where the household income is below the $52,762 national median, according to census and federal banking data compiled by Bloomberg.

The decline limits access to basic financial services for people who don’t have bank accounts and forces them to pay fees for such activities as cashing checks and settling utility bills. “It’s very hard for people to get an economic toehold in neighborhoods without banks,” says Sarah Ludwig, co-director of the Neighborhood Economic Development Advocacy Project, a New York-based community support center.