Study Charges Banks Flee 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 residents inner city and minority consumers–the so-called underserved–to opt for high-priced check-cashers, payday lenders and pane 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.