More bank branches closing

For the first time in 15 years, banks across the United States are closing branches faster than they are opening them, eliminating locations in Massachusetts, other parts of New England, and the rest of the country.
Bank of America, the nation’s largest bank, plans to close 1 in 10 branches nationwide by 2014, including some in Massachusetts. Webster Bank of Waterbury, Conn., plans to close a half-dozen branches, including one in Mansfield, in October. Rockland Trust and Community Bank of Brockton are each closing three branches.
Overall, banks have eliminated more than 1,400 US locations in the past two years. And almost every week, more branches go dark.
“The industry is overbranched,’’ said Bob Meara, senior analyst with Celent, a financial research firm in Boston. “Banks are doing triage with their branch networks and closing the least profitable ones.’’
The branch closings will probably affect people who have business that is difficult to conduct electronically, such as retailers trying to obtain small bills and coins, or customers who prefer giving or getting their money in person. Advocates for the poor also worry that lower-income neighborhoods will feel the brunt of branch closings, forc ing more residents to turn to payday lenders, check cashing services, and other institutions that typically charge higher fees.
“Residents of those neighborhoods will be paying much more to cash their checks, to get loans, and to do their business,’’ said Jesse Van Tol, a spokesman for the National Community Reinvestment Coalition, a Washington advocacy group. “It’s a trend that threatens to create a dual banking system in America: one for the wealthy and one for everybody else.’’
But analysts and industry executives say the country is still brimming with banks; the number of branches per capita has nearly tripled since 1970. “I don’t think it will impact any disadvantaged neighborhoods,’’ said Bruce Spitzer, spokesman for the Massachusetts Bankers Association.
Many banks are shutting branches as a slow economy, struggling housing market, and increasing regulation push them to slash expenses. New restrictions on credit card charges, debit card fees, and overdraft penalties could potentially cost them billions of dollars a year. Banks are also seeing sluggish demand for loans and recording steep losses from foreclosures.
But the trend is also a recognition that branches are not as critical as they once were. Customers increasingly do their banking through the Internet, smartphones, and ATMs. Webster Bank found that most customers only need to visit branches for complex transactions, such as setting up a new business account or applying for a home equity line of credit, said Webster spokesman Robert Guenther.