More Americans are left without access to basic financial services as banks have closed more than 1,000 branches this year, revealed.
Data from S&P Global Market Intelligence shows that between Jan. 1 and July 31, 1,144 national and regional banks across 49 states were closed — and companies are exiting some areas faster than others.
While California saw the most closures in absolute terms, New Jersey suffered the largest losses per capita, totaling 83. It was followed by Washington DC and Connecticut. Vermont was the only state that didn’t lose a single bank branch.
The latest wave of closures brings the total to 10,680 since 2019. A handful of these were small regional banks, but the majority represented national banks such as Wells Fargo, Chase and US Bank.
Even if the rush to stationary branches continues, it could abate. In 2022, the total was 3,066 – almost three times the number killed in seven months this year. According to S&P, banks had a total of 78,121 active branches nationwide at the end of May.
While California saw the most closures in absolute terms, New Jersey suffered the largest losses per capita, totaling 83. It was followed by Washington DC and Connecticut
While a handful of closures affected small regional banks, national banks like Wells Fargo, Chase and US Bank accounted for the majority
North and South Dakota were both significantly affected, suffering an average of 7.7 and 5.5 bank closures per million residents, respectively.
The closures in the South were less pronounced than in other parts of the country, although Alabama experienced 22 bank closures for its relatively small population of 5 million, according to 2022 U.S. Census data.
PNC has been the worst offender this year, closing a total of 201 bank branches in just seven months. Close behind were US Bank and Wells Fargo, which closed 185 and 160 branches respectively.
A spokesman for Wells Fargo told this week that while stores are closing in many regions, fewer successful markets are opening.
“While the total number of stores continues to decline, new stores are opening in high-growth neighborhoods of existing markets, allowing us to offer greater store convenience,” it said in a statement.
“We may also open new branches by merging two older existing branches into a more convenient location.” they added.
Experts warn that with inflation ramping up and the cost of living rising, customers may prefer to discuss their finances face-to-face with their bank.
Branch offices are a lifeline for anyone who wants to speak to a staff member in person or complete simple tasks such as cashing a check, making a simple deposit, or accessing cash.
The dwindling number of branches means residents have to travel long distances to get to the nearest bank – which often hits vulnerable and elderly customers hardest.
According to the National Community Reinvestment Coalition, a third of the sites that closed between 2017 and 2021 occurred in areas that were predominantly low-income and majority-minority.
With increasing closures, communities are at risk of becoming so-called “banking deserts” — if they don’t have access to a bank or credit union within 10 miles — and making residents increasingly vulnerable to falling prey to high-priced borrowing options like short-term loans.
Banks are increasingly relying on digital services – a development that was enormously accelerated by the Covid 19 pandemic.
According to data from S&P Global Market Intelligence, PNC has closed 201 stores this year. Pictured is a store in Round Rock, Texas
Pictured is a US bank branch in Walnut Creek, California. This year alone, the bank closed 185 branches
Fear of virus transmission discouraged households from exchanging cash and encouraged them to use digital payment apps like Venmo and Block Inc.’s Cash App.
A Federal Reserve study showed a 12.4 percent increase in digital transactions in the first quarter of 2020 alone.
However, some customers may be reluctant to use internet banking or have limited access to these services, making them more reliant on physical branches.
The closures are not just limited to small banks in rural communities, but also affect large legacy banks in densely populated areas.
And many more are planned. This month, Wells Fargo filed notices with the Office of the Comptroller of the Currency that the company would close an additional 37 stores.
Most bank branch closures in the US are overseen by the OCC, which assesses the impact of these openings and closures on affected communities.
“OCC recognizes the importance of bank branches and is committed to supporting access to banking services in all communities,” a spokesman for the agency told .
They added that while closures must be notified to the federal agency, individual banks do not need their approval.
“Under Statute 12 USC Section 1831-r, an insured custodian must notify its principal regulator and branch customers of its intention to close a branch.” Branch is closing,” they wrote.