JPMorgan Opening Dozens of Branches in Low-Income Communities
J.P. Morgan Chase reportedly wants to open almost 100 branches in low-income communities.
As the Wall Street Journal (WSJ) reported Tuesday (Oct. 2), this effort will include inner cities and rural towns where banks have for years been shuttering brick-and-mortar locations.
The new branches will feature the basics of banking — tellers, ATMs, etc. — but also offer services for small businesses and host financial literacy workshops, the report said. It’s a model the banking giant has been testing for five years and now plans to expand nationwide.
“This is not just ‘do-gooding,’ this is business,” J.P. Morgan CEO Jamie Dimon said in an interview with the WSJ. “We measured these branches by number of customers, deposits, investments, and the model works.”
In addition, the bank will also hire 75 community managers for some of these branches, people who will work with community organizations and help residents learn how to grow their wealth.
“What we’re doing is a comprehensive approach to lifting a community economically,” said Diedra Porché, head of community and business development at J.P. Morgan Chase.
The report notes that although banks are legally required to offer services and lending in lower-income areas, many have been reducing their presence amid consolidation. And studies have shown the reduction they’ve made to mortgage lending since the 2008 financial crisis have disproportionately impacted nonwhite Americans.
A report earlier this year from the Federal Reserve identified the rise of “banking deserts” in the U.S., affecting 12 million Americans. These are locations where banks are outside a certain radius: two miles for urban communities, five miles for suburban communities, and 10 miles for rural towns.
“Overall, the number of bank branches declined by 5.6 percent from 2019 to 2023,” the Fed wrote on its blog.
“By asset size, large banks ($10 billion to $50 billion) and very large banks (greater than $50 billion) had the most closures, dropping by 11% and 12.6%, respectively. Community banks, which have assets of less than $10 billion, increased their footprint by adding 1.1% more branches,” the report added.
J.P. Morgan’s push to open banks in low-income areas is part of its larger effort to expand its brick-and-mortar presence. The bank earlier this year announced plans to open 500 branches and renovate another 1,700. Rival Bank of America said last month it would open 165 “financial centers” around the country by 2026.
PYMNTS examined the thinking behind the expansion earlier this year, noting that while the banks “conceded that local offices won’t supplant the convenience digital banking offers, both also said they recognize physical locations give consumers a place to go when they want to discuss loans or seek financial advice.”
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