Tuesday Topic: Branch Deserts

The sad part about the US Bank story is that it will be used as a blanket condemnation on all banks and bankers as evil-doers. It's interesting to read the comments on the article and Kristof's responses. (https://www.nytimes.com/2020/02/01/opinion/sunday/us-bank-fired-employee.html#commentsContainer)  A part of one of his replies:  "...we've seen a shift to a rigged capitalism that is less inclusive, less about stakeholders -- the kind in which Amazon pays negative federal income tax. So I personally don't think we need socialism, I think we just need a better regulated capitalism, with unions to check corporations, reminiscent of the way capitalism worked from 1945 through the 1970s."  A call for increased regulations. At least one commenter called for the firing of Cecere.  I also read that the initial report that the employee gave the customer the money out of her own pocket was incorrect - the supervisor gave her the money to give him out of HER own pocket.  I always wonder what the untold parts of these stories are.

Back to the splash-back on all of us....we all know that if each of us told every story of us going above and beyond to help customers and our communities, no one would have the time or inclination to read them all.  Once in a while a do-good story like that will go viral, and I always think that stories like that happen frequently but don't get noticed.  If we were better at telling our stories, maybe our image would be better, but then again when we brag on ourselves, it turns people off.  Not sure what the solution is.

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Mary Fowler
Chief Executive Officer
The Peoples Bank
Magnolia AR
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Original Message:
Sent: 02-04-2020 09:03
From: Barb Rehm
Subject: Tuesday Topic: Branch Deserts

I love stories that bring statistics to life and this one in American Banker does just that. It's about what happened in a rural town – Duncan, Ariz. – when its last bank branch closed nearly four years ago. Here are the statistics: the total number of U.S. bank branches declined only twice between 1934 and 2009, but it has now fallen for six consecutive years. The 78,014 branches that were open in 2018 represented a 6.6% decrease from 2012. Here is the impact: Duncan lost leaders, donations, and sponsorships; it's having a hard time attracting new residents; and lending has dried up. But the biggest impact revolves around cash. With the nearest bank branch 40 miles away, businesses are holding onto cash rather than depositing it – a risky practice. Local merchants are hoarding small bills because they are hard to come by. Customers use credit cards more than cash, driving up interchange expenses for local businesses. Filling the gap is the Post Office where Duncan residents buy a stamp and ask for cash back and businesses turn their cash into money orders. "The post office is the unofficial bank," the electric cooperative's CEO told the newspaper. That makes me wonder what role banking deserts could play in the public policy debate around expanding the financial services the U.S. Postal Service may offer.

And one final thought today – a follow up to a story in one of our Weekly News Roundups earlier this year. Remember the story about U.S. Bank firing an employee and her supervisor for giving a customer $20 on Christmas Eve? The New York Times columnist Nicholas Kristof wrote a brutal column on Sunday, saying U.S. Bank had lost its soul much like tobacco and pharmaceutical companies. After the column ran, U.S. Bank CEO Andrew Cecere called Kristof and vowed, "I will fix this." The whole mess is a good lesson for bankers everywhere.

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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
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