Tags: Financial Markets | Money | areas | boa | counties | metropolitan | wsj

Nearly 1600 Bank of America Branches Closed Since 2009

Image: Nearly 1600 Bank of America Branches Closed Since 2009
(Roman Tiraspolsky/Dreamstime)

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Wednesday, 20 September 2017 10:42 AM Current | Bio | Archive

Bank of America was hit hard by the 2009 financial crisis and has closed 1,597 bank branches over the past eight years.

The Wall Street Journal reports this as a major strategic shift "to rekindle sagging profits and focus on major metropolitan areas." One example given is that the bank shut all of its branches in Indiana a few years back. This year, it will be opening a new branch in Indianapolis while ignoring the rural areas and small towns of the Hoosier State.

Back in 2009, Bank of America had branches in 725 U.S. counties. By 2016, that had fallen to 472 counties.

While the financial crisis may have prompted Bank of America’s specific move, the underlying trend is being driven by new technology. In my recent book, "Politics Has Failed: America Will Not," I noted that "just about everything you used to do at a local bank branch can now be done on your smartphone. In fact, the only thing your phone can’t do is issue paper money. But that doesn’t matter so much when you have phones, digital wallets, and credit cards to pay for what you need."

These changes raise questions about whether we need branches at all. In my book, I highlight this disruptive reality as "a prime example of a good change being achieved through a hard transition."

Fintech companies will provide consumers with more choices and fewer hassles.

Also from Scott Rasmussen's "Politics Has Failed: America Has Not," "But that transition will be costly for those who lose their job and for the banks that need to unload tremendous amounts of real estate assets. The ripple effects will spill over and hurt the commercial real estate market as well.

"As branches are closed, hundreds of millions of square feet of commercial space will become available. In some communities, the closing of a local bank branch may be the final straw that dooms a downtown area. Eventually, the benefits will outweigh the costs, but the process of change is always difficult."

Each weekday, Scott Rasmussen’s Number of the Day explores interesting and newsworthy topics at the intersection of culture, politics, and technology. Columns published on Ballotpedia reflect the views of the author.

Scott Rasmussen is a Senior Fellow for the Study of Self-Governance at the King’s College in New York and an Editor-At-Large for Ballotpedia, the Encyclopedia of American Politics. His most recent book, "Politics Has Failed: America Will Not," was published by the Sutherland Institute in May.To read more of his reports — Click Here Now

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These changes raise questions about whether we need branches at all.The ripple effects will spill over and hurt the commercial real estate market.
areas, boa, counties, metropolitan, wsj
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2017-42-20
Wednesday, 20 September 2017 10:42 AM
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