Better banking options needed

Michael Carney

A quick search of “banks in North Philadelphia” on Google Maps will yield dozens of results. However, a closer look will reveal that almost all of these results are simply ATMs rather than actual bank branches.

Between Lehigh Avenue and Vine Street, Google indicates that there are about a dozen banks in the area but more than 50 non-bank affiliated ATMs. This low frequency of banks is consistent across the rest of North Philadelphia. Center City, by comparison, has one-fifth the population and one-twentieth the land area of North Philadelphia, according to city-data.com – but the area has more than 100 banks and even more ATMs, according to Google Maps.

Despite its greater land area and population than Center City, North Philadelphia is generally avoided by most big banks. And when they do establish themselves here, they fail to recognize the consequences of outrageous bank fees on the neighborhood’s impoverished residents. A more socially conscious standard of banking practices in North Philadelphia would be a major step in the region’s economic regeneration.

In this financially burdened region of Philadelphia, much of the responsibility for spurring economic growth rests on banks. Low interest mortgages, auto loans, business loans, student loans, credit repair and tax resources are all essential services that would provide a better path towards an economically sound North Philadelphia.

North Philadelphia’s banks, although not many, can generally be found on or near Broad Street. However, since certain areas of North Philadelphia can be as far away as two miles east or west of Broad, many residents without cars are forced to use SEPTA.

“My bank is Wells Fargo and the closest one for me is on Broad Street near Temple,” said Kimberly Harris, a resident of North Philadelphia near 21st and Diamond streets. “But the problem isn’t just no banks, there’s also no places around here to spend the small amount of money I have. Most of my money is put toward bills. … With any money I have left over, my spending choices are limited.”

Residents like Harris must frequently decide whether to withdraw cash from a corner store ATM and pay a $3 surcharge or use two SEPTA tokens to take a bus to their bank and back.

In addition to it being expensive and often difficult for North Philadelphia residents to access cash, the big banks of the area hold residents to the same financial standards to which wealthier individuals are held. Requirements on checking accounts in order to avoid paying a monthly fee are the same for North Philadelphia residents as they are to Center City’s wealthy elite. Minimum balances should be made on a case-by-case basis, determined by an individual’s income.

The financial constraints do not end there. Account overdrafts, or spending more than one’s balance, can result in fees upwards of $35. Withdrawals from corner store ATMs can not only be assessed a $3 surcharge by the owner of the ATM, but may face an additional surcharge from the customer’s bank for not using his or her bank’s ATM.

With a median household income seven times higher in Center City’s richest zip code than North Philadelphia’s poorest one, according to the Pew Research Center, a flat fee structure like the one currently in place is exponentially detrimental.

The example of banking in North Philadelphia is just one of many instances in which poor urban residents face expenses that are disproportionate to their income. Big banks need to take a greater role in designing banking options for poorer individuals. Calculating fee structures and interest rates based on a zip code’s median income will make the fees associated with banking more manageable for poorer customers. In poor areas like North Philadelphia, a structure like this would increase demand for banking services and potentially impact the long-term economic success of this region and poor neighborhoods nationwide.

While many eyes are focused on Center City developments like the East Market Redevelopment Project and Dilworth Park’s renovations, few have shown the initiative to address the need for progress in North Philadelphia. North Philadelphia represents one-sixth of the city’s entire population, yet receives nowhere near one-sixth of the city’s resources.

Much of the neighborhood’s economic progress has been stifled by Center City’s growing appeal. This rapid growth of wealth in Center City’s neighborhoods have attracted many banks to expand and broaden their services. However, with little increase in income year-to-year in North Philadelphia, banks have chosen to avoid the market rather than take a role in its growth.

The connection between Temple’s economy and the economy of the rest of North Philadelphia is inseparable. While the banking problem may not be as significant an issue to Temple students as academics or staying safe around Main Campus, I suspect this issue is greater than most students believe. Banks are the foundation for less wealthy individuals to achieve financial success and few banks in North Philadelphia have contributed toward this goal.

The success of businesses near Main Campus and across all of North Philadelphia depends not only student patronage, but also on business from residents of the area. If the financial trend in North Philadelphia continues, economic activity is likely to decline. Although Temple students and North Philadelphia residents seem like two very different groups of people, our faith in each other’s financial success will determine the fate of the community we share.

Michael Carney can be reached at michael.carney@temple.edu

 

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