Last month Wachovia silently closed one its North Philadelphia bank at Front and Alleghany. It was a bank closing, like many of this city’s bank closings, that went unnoticed by much of Philadelphia and came unexpectedly to the citizens around it. It marks a trend: the rapid closing of banks in low income neighborhoods.
To add insult to injury, across the street from the vacant Wachovia bank a check cashing place opened up. Such places are notorious for overcharging people to get their checks chased. “Grand Reopening – Current 1 Check Cashing” read the sign.
The problem
In the past five years, according to Community Legal Services, over 30 bank branches were closed in Philadelphia. These closings, plus the historical lack of banks in low income neighborhoods, leaves poor neighborhoods with few options to get their government checks or paychecks cashed, get loans for housing repair, or get loans for their businesses.
Without access to startup capital, or capital to keep houses in good repair, neighborhoods fall into disrepair and abandonment. People’s houses begin to fall down. Someone might not have the small amount of money to fix the roof. And without the money to immediately fix that roof, water damage gets worse and worse, until eventually the house is a moldy, damp mess.
Groups like ACORN has fought for money to go into home repair for low-income citizens. And that’s been effective in stemming the tide. But the abandonment of poor neighborhoods by banks is a raging river, rapidly moving on.
The Solution
Two bills put forward by Wilson Goode, would help would help stem this tide.
The first would be a broad measure to insure that any additional closings by any bank have to be announced 120 days in advance. While we can’t stop banks from closing branches altogether, that gives at least some time for the community to brace itself or provide itself with alternatives.
The second would strike Wachovia from being on the list of approved depositories for the City. This is not a slap on the wrist. It is a very strong step that I would prefer we not have to take. But, besides closing these two branches, Wachovia has not been as effective as it could be in providing capital in poor neighborhoods. It does not have a lending program for basic home repairs. It’s been one of the worst banks in giving people a hand to buy homes. It is dead last among the city depository banks in home loans to African-Americans. And my understanding is that it has refused to enter into written Community Reinvestment Act agreements with any organizations in the city, agreements that would assure that money deposited by the city and its residents goes back to people in the city.
Negotiations with Wachovia that would make this second bill unnecessary are still ongoing. And, with good will on all sides, they can be successful.
Get involved
I am blogging about is to ask you to contact you city council members to support these bills, which will be voted on in committee tomorrow. You can fax your City Council members from Hallwatch’s faxbank: www.hallwatch.org
It’s time that these bank closings don’t go unnoticed.