Bloomberg Businessweek

 FINANCE Bloomberg Businessweek March 11, 2019

25

THE BOTTOM LINE Although it says it isn’t giving short shrift to

low-income communities, JPMorgan sees its future serving more of

the country’s wealthiest banking customers.

Consumer advocates warn that branch closings
risk leaving scores of low-income areas with weaker
competition for services such as checking and
small-business lending. And a 2014 study by econ-
omist Hoai-Luu Q. Nguyen, then at MIT, found that,
even with other banks nearby, branch closures in
low-income and minority neighborhoods made
it harder for local businesses to get loans. “Bank
branches are a crucial part of financial access,” says
Scott Astrada, director of federal advocacy at the
Center for Responsible Lending.
JPMorgan, the biggest U.S. bank, announced
plans a year ago to open 400 branches. In the
13 months through January, it’s applied to open
185 new branches, with 71 percent of them in
more affluent areas. The bank in that time has
given notice to regulators of its intention to shut
187 branches. About half of those are in neigh-
borhoods where household income is below the
national median of $60,336, according to regula-
tory and U.S. Census Bureau data.
Anne Pace, a JPMorgan spokeswoman, says
a national view of the data is skewed because
it doesn’t adjust for regional income differ-
ences. “In our footprint, Chase has significantly
more branches and more deposits in low- to
moderate-income neighborhoods than any other
competitor,” she wrote in an emailed statement.
“Even when we’ve consolidated branches, we
continue to grow market share in those neighbor-
hoods. In the vast majority of cases, the next clos-
est branch is less than two miles away.”
JPMorgan prefers a measure that excludes states
where it doesn’t have a presence. Using that, it had
26 percent of its branches in low- and moderate-
income areas, while Wells Fargo & Co. and Bank of
America Corp. each had 29 percent, according to
data from JPMorgan. In response to questions from
Bloomberg News, JPMorgan said 30 percent of new
branches will be in such communities, up from an
earlier pledge of at least 20 percent.
Nationally, banks shut 1,915 more branches in
lower-income neighborhoods in the four years
through 2018 than they opened, according to S&P
Global Inc. The three largest consumer banks—
JPMorgan, Wells Fargo, and Bank of America—led
the way, S&P said. A spokeswoman for Wells Fargo
says it serves “significantly more markets than any
other national bank peers, including in underserved
communities.” A spokeswoman for Bank of America
says about one-third of its network is in low- and
moderate-income neighborhoods, “and that has
been consistent over a number of years.”
At a Feb. 26 investor conference, Jamie Dimon,
JPMorgan’s chief executive officer, said the bank’s

“biggest opportunity” is wealthy customers.

JPMorgan has captured just 1 percent of the mar-

ket catering to customers with at least $250,000 in

investments and accounts, Dimon said. “It’s not

that hard to say, ‘Why not 10 percent?’ ” he said.

JPMorgan isn’t planning to close branches only in

low-income areas. Some in Westchester County, N.Y.,

and well-to-do suburbs of Chicago, Houston, and Los

Angeles are slated to go. Meanwhile, a portion of its

proposed branches in the Washington, D.C., area

are in low-to-moderate-income communities. The

rest will dot richer places, such as the two branches

bookending a mile stretch of Wilson Boulevard in

Arlington, Va., which already has a dozen banks.

—Michelle F. Davis

*THROUGH JAN. 31, 2019; DATA: OFFICE OF THE COMPTROLLER OF THE CURRENCY; U.S. CENSUS BUREAU

Where the Money Is

JPMorgan Chase branch openings and closings since Jan. 1, 2018*

by median household income of branch zip code

Openings Closings

Branch openings and closings in Manhattan and the Bronx

Median household

income of all zip codes

with branch openings

$81.3k

...and branch closings

$61.5k

0 50 100 150 $200k

20

10

0

Gateway Center at

Bronx Terminal Market

$27k

Washington Heights

Median household income:

$53k

Broadway and 149th

$44k

Broadway and 96th

$82k

Hudson Yards

$85k

8th Ave. and 23rd

$123k

Chinatown

$106k

Madison Ave. and 47th

$118k

Madison Ave. and 88th

$112k