Study Charges Banks Flee From the Underserved

WASHINGTON - The banks are abandoning the largest cities and their minority communities in favor of the upper class and white neighborhoods, according to a new a new study.

The study, by the National Community Reinvestment Coalition, concludes that the drop-off in mainline banking services has forced inner-city residents and minority consumers-the so-called underserved-to opt for high-priced check-cashers, payday lenders and pawn shops for many of their financial services needs.

The NCRC recommends that regulators pay closer attention to the financial service providers-unregulated, as well as regulated-in those communities, and strengthens the Community Reinvestment Act, which requires banks to serve those communities. The study will pose a political dilemma at a time the banks want to force CRA on credit unions, based partly on a study issued by the same group claiming credit unions are not adequately serving the underserved.