*(Via Culture Banx) – For years the biggest U.S. bank J.P.Morgan (JPM +1.15%) has exemplified the industry trend of cutting back their branches in less affluent areas, now it’s taking a new approach to increase deposits in these communities.
The company plans to enter into nine new U.S. markets and 30% of the branches will be in low to moderate income areas.
Even though we live in a digital financial society, just how valuable are physical bank branches when it comes to closing the wealth gap?
Why This Matters: Increased competition with banks in underserved communities is a good thing for services such as personal checking and small-business lending. Bloomberg reported a 2014 MIT study found that even with other banks nearby, branch closures in low-income and minority neighborhoods made it harder for local businesses to get loans. In fact, the number of new small-business loans declined 13% in the years after a bank branch closed.
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