NY Times: City’s Poor Still Distrust Banks

[marmar]

City’s Poor Still Distrust Banks

By CHRISTINE HAUGHNEY
Published: August 17, 2009


In 1986, when the Lower East Side had just one bank in a 100-square-block area, the high numbers of residents without bank accounts alarmed the city but did not surprise anyone.

In the years since, the number of bank branches has skyrocketed, with the big names compelled to open in underserved areas. Community credit unions have sprung up from Washington Heights to Bedford-Stuyvesant. Outreach workers have taken to the streets to draw the “unbanked” — many of them the city’s poorest, living check to check — into the system and away from the high-fee world of check-cashing and money orders.

But none of it has worked. In Manhattan, long the world’s banking capital, 12 percent of households still do not have a bank account, compared with the national average, 8 percent, according to recently released data by the Pew Charitable Trusts.

“We’ve seen little change in the population we’ve served in the last 20 years,” said Michael Callaghan, executive director of Nazareth Housing, which counsels Lower East Side residents on their finances.

If there were a public face for the challenges outreach workers face in this battle — distrust of banks first among them — it might be Jose Alberto Abreau. Community advocates and credit union workers have repeatedly stopped by the Lower East Side bodega where he works, but he shakes his head no each time. ...........(more)

The complete piece is at: http://www.nytimes.com/2009/08/18/nyregion/18cash.html?_r=1&ref=nyregion

[aquart]

1. Now me, when I see three and four banks per block...I worry.

Because if retail businesses can't survive and pay rent in those spaces, WHERE IS THE MONEY COMING FROM TO SUPPORT THE BANKS?

[FarCenter]

2. New York City is way overbanked

The retail branches operate at a loss in the city. They are supported by the home loan, auto loan, credit card, and commercial banking businesses.

During various mergers, they have been under a lot of political pressure not to close branches.