Record Pace of Bank Branch Closings May Finally Be Slowing

Source: American Banker

U.S. banks hastened a shift to digital platforms during the height of the pandemic and, in the process, accelerated the pace of branch closures in a trend that continues into this year. However, the Biden administration may have thrown a lifeline to brick-and-mortar banking. 

As enforcement of the Community Reinvestment Act intensifies under Biden, regulators are asking more questions about planned closures, working to ensure that residents of low- and moderate-income communities are not left without convenient access to physical banks — a hallmark of the CRA.

"If you have a branch in an LMI area" — low- to moderate-income market — "you have to be very careful to make sure your business justification reasons are very strong. And that means you probably need to have another branch very nearby," Ken Thomas, founder and CEO of Community Development Fund Advisors in Miami, said in an interview.