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Top Story:  OCC Helps Dayton Community Find Alternatives to Branch Closing

04/25/2014

By Hershel Lipow
Community Affairs

Every year, the OCC receives complaints from customers of national banks and federal savings associations that relate to credit cards, mortgages, and checking account disputes. But a number of public comments relate to bank mergers and consolidations and branch closing notices filed with the OCC’s Licensing Department.

Last year, residents of the Westown area of Dayton, Ohio, contacted the OCC alarmed about a PNC Bank branch closing in their community. They wanted the OCC to help keep the branch open and address the potential hardship of its closing.

Bank Examiner and Licensing Analyst Justin Holder (left), State Representative Fred Strayhorn, City Commissioner Dean Lovelace, and Deputy Comptroller Barry Wides met last fall in Dayton, Ohio to discuss a PNC branch closing in Dayton's Westown community.

Bank Examiner and Licensing Analyst Justin Holder (left), State Representative Fred Strayhorn, City Commissioner Dean Lovelace, and Deputy Comptroller Barry Wides met last fall in Dayton, Ohio to discuss a PNC branch closing in Dayton's Westown community.

“The OCC does not have the authority to postpone or prevent the closing of a bank branch. But it can hold a meeting in a low-to-moderate-income area to explore the feasibility of obtaining adequate alternative banking facilities and services if contacted by the public to hold such a meeting,” said Deputy Comptroller for Community Affairs Barry Wides.

Working with Licensing and Supervision, Community Affairs arranged a meeting in Dayton last fall to explore alternatives and learn more about the financial credit issues facing Dayton’s residents and businesses. The meeting drew a diverse group of approximately 80 community stakeholders representing state and local government, the clergy, the University of Dayton, and the banking community.

Julie Blake, Assistant Deputy Comptroller of the Cincinnati field office, joined Justin Holder, Bank Examiner and Licensing Analyst in the Northeastern District, and District Community Affairs Officers Norma Polanco-Boyd and Denise Kirk-Murray at the meeting. Polanco-Boyd serves as Dayton’s Community Affairs liaison and Kirk-Murray supports PNC Bank.

During the meeting, PNC Regional Vice President David Melin said PNC was not withdrawing from Dayton and that the bank would maintain several nearby branches and continue to operate its community development programs in the region. Residents responded that the branch closing would have a negative impact on the community, which is home to a large number of seniors who lack the transportation needed to access other branches and who are not comfortable using mobile banking technology.

Community Development Manager Karen Bellesi (right) discusses the PNC branch with Erica Bruton, from the City of Dayton.

Community Development Manager Karen Bellesi (right) discusses the PNC branch with Erica Bruton from the City of Dayton.

Speakers raised concerns that the overall level of lending and investment in the community would diminish. A local business owner stated that financial services are a community asset and that it is difficult to maintain an inclusive community when there is a shortage of assets like banks in the community. One religious leader called for the approximately 70 religious institutions in the area to change their banking relationships if banks leave the community.

Dayton’s City Manager Tim Riordan offered to convene a follow-up meeting with community leaders and financial institutions, and Wides encouraged all parties to continue their discussions. In closing the meeting, Wides said, “History proves that community-led solutions have a greater likelihood of success.”

Since that time, Kirk-Murray reports that PNC has met with representatives from the OCC and the community and has pledged to maintain an ATM nearby. “The bank is exploring new ways to educate its customers and make good on its pledge to provide banking services to the community,” said Kirk-Murray.

The Impact of Branch Closings on Communities

A 2011 study by the Federal Reserve Bank of Cleveland shows that the presence of brick-and-mortar bank branches encourages savings and provides greater access to credit with less risk of default. “In a competitive environment, banks and other institutions can often step in to fill the void and expand their market share and penetration,” said Norma Polanco-Boyd, a District Community Affairs Officer who works in the Cleveland field office.

According to research conducted by the Brookings Institution and affirmed by recent studies, non-mainstream financial agents, such as check-cashing centers, payday loan providers and pawnshops, often enter low-income communities after banks move out. “The FDIC estimates that roughly 30 million Americans either have no bank account or rely on these more expensive alternatives to traditional banking,” said Karen Bellesi, OCC’s Community Development Manager.

“Determining how well our banks are meeting these unmet credit needs is an important part of our CRA examination process,” said Assistant Deputy Comptroller Julie Blake. “In Cleveland and many other cities, banks have joined community partnerships that offer strong support for such efforts to expand financial services into underserved communities.”

Last Updated: 04/25/2014