Queens Residents Being Passed By
Today, Rep. Anthony Weiner (D – Queens and Brooklyn), a member of the House Energy and Commerce Committee, released a report showing that although the number of banks in New York City has increased by 191 since 2006, many outer borough neighborhoods are being left behind. Over the last four years, the wealthiest borough, Manhattan, has gained 73 more banks; while only 37 additional banks stand in Queens, the City’s largest borough.
Even in the midst of an economic recession, the number of bank branches in New York City has increased by 12% since 2006. The boom, unfortunately, has largely been concentrated outside of Queens, leaving local residents without the benefits that a financial institution can offer.
Over the last four years, the number of banks in the Queens has only grown by 37. Conversely, the number of bank branches in Manhattan, the richest borough in the City, has increased by 73 – twice the growth in Queens.
Access to banking institutions and their credit and investment capital is essential to creating and retaining jobs, developing affordable housing, and supporting small businesses. But, banks in this city are disproportionately serving those of us who live in Manhattan.
In South Jamaica, only one additional bank has opened since 2006 – increasing its total from zero branches to one. Similarly, no new branches have opened in Corona, Queens over the past four years, leaving residents with access to only three banks. During that same period, Soho has added six additional banks for a total of 45. Small businesses are the life-blood of many communities here in Queens, and we need to make sure the flow of funding is made available to Queens businesses.
On average, there are 19 banks for every 100,000 Queens residents – one of the lowest averages in the City. In Manhattan, there are 43 branches, on average, for every 100,000 residents. In the least populous borough, Staten Island, there are 22 banks, on average, for every 100,000 residents.
"Neighborhoods in Queens are being squeezed out of the benefit a local bank can provide,” Weiner said. “We need better incentives and a stronger regulatory authority to increase the presence of banks in neighborhoods that need them the most. Banks can't keep getting a free pass when they are not meeting standards set by Congress."
Highlights of the Weiner Study:
- Since 2006, New York City has seen the addition of 191 bank branches. The borough of Queens, however, accounts for only 19% of that net growth.
- On average, there are 19 banks for every 100,000 Queens residents. Manhattan, on the other hand, averages 43 branches for every 100,000 residents, and Staten Island residents benefit from 22 banks, on average, for every 100,000 people.
- Nearly 70% of the bank growth in the last four years occurred in neighborhoods where the median income was above $40,000.
- In neighborhoods with a median household income above $53,000, there is a bank for every 2,300 New Yorkers, whereas neighborhoods with a median household income below $31,000 have only one bank for every 9,000 people.
- Queens, the City's largest borough, added 50% fewer bank branches than Manhattan.
- In Corona, Queens, residents are presently served by only three banks. In Manhattan’s Turtle Bay, there are currently 64 banks open.
Washington and Albany have both established programs meant to encourage banks to provide services in poorer neighborhoods – but they have proven to be insufficient. The New York State Banking Department offers tax breaks, job training, and public fund deposits to banks that set up shop in underserved communities. And in 1977, Congress created the Community Reinvestment Act (CRA) to prohibit financial institutions from under-serving low-income areas and ensure equal access to housing finance resources, consumer and business lending, community investments, and low-cost services.
Four federal agencies were selected to rate banks on their effort to serve the needs of low-income neighborhoods. But the regulators, representing the Federal Deposit Insurance Agency (FDIC), Office of Thrift Supervision (OTS), Office of Comptroller of the Currency (OCC), and The Federal Reserve (The Fed) rated over 98% of banks as either Outstanding or Satisfactory even though the banking industry continues to deny the mortgage loan applications of African Americans and Latinos twice as frequently as those of whites. Further, the agencies are largely without the authority and power to require banks to open branches in underserved areas.
To help address the banking disparity in Queens, Rep. Weiner proposed the following measures:
The Weiner Plan:
- Revise the Community Reinvestment Act’s (CRA) bank examination ratings so that branch distribution and low-income services receive more weight
- Allow CRA administrators, i.e. FDIC, to penalize banks that receive poor ratings through fines and through denying expansion and merger requests
- Incentivize banks to offer and actively market a portfolio of safe, no fee services to low income customers. This can be achieved by revising the CRA’s service test to give banks who offer these services higher ratings. These ratings could then be used to reward banks in a variety of ways.
