In July, on a day so hot people ran errands only if they had to, a steady flow of customers pulled up to the Bank of America branch in Winthrop center. No tellers or loan officers worked inside — their absence felt since the start of the pandemic — but the two cash machines in the lobby were busy. By day’s end, the branch would close permanently, even its ATMs.
Local resident Donna Winter was angry that a long inconvenience had turned permanent.
“Today was the last day this one’s open,” she said. “That leaves me walking all the way up to the bridge in order to do even a basic transaction,” at an ATM-only site. The nearest full-service Bank of America branch for this oceanside town, home to a mix of blue- and white-collar workers, was now an 18-minute drive away, in Revere. On public transit, the trip could take about an hour.
The pandemic was an opportunity for Bank of America, the region's largest bank, and others to speed up closures and consolidations – shuttering branches in a slew of neighborhoods. All told, banks have closed at least 230 branches across the state since the start of COVID, one quarter of those in low- and moderate-income areas, according to Federal Deposit Insurance Corp. data and WBUR analysis.
They have permanently closed not only 39 locations in Boston, but dozens of others, including in cities like New Bedford, Springfield, Brockton and Worcester, places where large swaths of residents live on less than the state median income.
Branch closures have an outsized impact on some customers: small businesses that deal in cash; city dwellers reliant on public transit; older customers who’ve long done business in person; as well as people with low or moderate incomes and those for whom English is a second language.
“Whether it was intentional or not, given who does online banking, very likely it will have a disproportionate effect on lower-income people in neighborhoods,” said former Congressman Barney Frank, a longtime advocate for fair lending and banks treating customers equitably.
Bankers acknowledge that the pandemic accelerated branch closures. They say more customers than ever took to banking online during the pandemic. Even technology holdouts changed their habits, often out of sheer necessity.
But as the economy reopened, many people across the income spectrum expected their local bank branch to be there for them if they needed it. In numerous cases, that didn’t happen.
A WBUR analysis of branch closures tracked by the FDIC found that Citizens Bank and Santander Bank — the second- and third-largest bank systems in the state — each has shut down 36 branches in Massachusetts since the start of the pandemic. Of those, 33% of the Citizens branches were located in low- and moderate-income areas, as classified by the Federal Financial Institutions Examination Council. Many of those were in supermarkets, where the bank says they’ve been replaced by ATMs. For Santander, about 22% of the closures were in low- and moderate-income areas.
Bank of America, which reported profits of $32 billion last year, has permanently closed 39 branches in Massachusetts, one quarter of those in low- or moderate-income areas. But the overall impact has been greater because the bank also kept more than 20 branches “temporarily” closed during COVID — some for over two years as of early September.
Together, the shuttered Bank of America branches represent 30% of its pre-COVID branches here, and some $12 billion in customer deposits. No other banking company kept branches out of service for so long. Most institutions, if they closed branches, reopened them within about a year, according to the Massachusetts Bankers Association.
During COVID, Bank of America shut down branches for longer than others
The protracted limbo has stung in many quarters, particularly in neighborhoods that historically have had to fight for banking services.
Small businesses and restaurants dot the streets of Nubian Square in Roxbury, and many commuters pass through daily at a large city bus station. This neighborhood formerly known as Dudley Square is historically diverse, and home to low- and moderate-income residents.
Robert George, executive director of Roxbury Main Streets, a community nonprofit that supports local businesses, said Bank of America’s multiple closures at the Roxbury branch during COVID, and reduced service as recently as this summer, were frustrating as the neighborhood worked to emerge from the pandemic slump.
“The in-person service was totally closed, and [they] were directing customers to the lobby for the ATMs,” George said. He experienced that himself, while trying to make deposits for his group, and had to explain to a bank staffer that as a small enterprise he didn't have an ATM card.
“Here in Nubian Square, Roxbury itself, it's a hub," George said. "I don't think they can show me any statistics claiming it's not heavily utilized. The bank is always busy. So it's an important, integral part, especially for a number of the businesses that exist here.”
Customers had entrusted the branch with nearly $240 million in deposits, according to the FDIC. During a July visit to the branch by WBUR, a security guard said the ATMs were open but branch visits were by appointment only.
Bank of America did not comment on reasons for closures or lack of in-person services at specific branches. According to spokesman Matthew Card, temporary shutdowns came in places where the bank saw fewer customer visits, or when a larger location was available nearby that allowed for physical distancing. The bank also has had trouble staffing some branches due to COVID.
George said he understood the pandemic precautions, but not the service reductions over many months. He said it was hard to forget how banks had disappointed the community before — during the financial crisis, and in decades prior, when they “redlined” in areas like Roxbury — by failing to make loans and serve low- and moderate-income customers.
“It’s about you providing appropriate equity in services,” he said. “When you see that history and you see this type of behavior, antennas go up again.”
According to the bank, normal service was restored at the Roxbury branch in mid-August. Most of the bank’s remaining temporary closures are slated to reopen in October; some of those will be renovated. Nationally, the bank still has 6% of its branches temporarily closed, and expects most to reopen by year end.
Card said the bank maintains about 30% of its branches in low- and moderate-income communities nationally, including in Massachusetts. He said the bank remains committed to its physical presence in the state, with about 160 branches and almost 1,000 ATMs.
Little oversight of closures by federal officials
While national banks must get regulatory approval to open branches, very little is required of them to close branches. They are required to file a form with their federal bank regulator — the Office of the Comptroller of the Currency — that includes reasons for the closure. Among the forms reviewed by WBUR, banks varied widely in how much detail they provided. No notification is required for temporary closures.
Smaller, state-regulated banks in Massachusetts do have to seek approval from state overseers when they close a branch.
In its Winthrop closure filing with the OCC, Bank of America said the branch would be “closed into” the Revere branch, located about 4 miles away. It said the branch was closing “due to its close proximity and overlap with a nearby branch and to support investment in other locations.”
Proximity is relative. Taking buses and the Blue Line from Winthrop center to the Revere branch requires multiple transfers and can easily take more than an hour.
A March letter to the Winthrop branch’s customers, who had $154 million in deposits there, said the location “will remain closed on Tuesday, July 19, 2022, as it has been for the last several months.”
In reality, the branch had been closed for over two years.
Banking online expands, but many still rely on branches
All three of the large banks said COVID sped up changes to where they are investing in branches and technology.
Santander Bank, for instance, has closed 36 branches, according to FDIC data, including one in a low-income part of Boston and others in moderate-income locations like Gardner, Lynn and Framingham. A bank spokeswoman said Santander also has opened 10 new offices since March of 2020, in locations ranging from Boston’s upscale Back Bay and Watertown to the lower-income neighborhoods of Nubian Square and Mattapan.
In a statement, Santander spokeswoman Nancy Orlando said, “We constantly re-examine our branch network in light of changing customer preferences.” She also said, “These efforts have included some branch consolidation.”
According to WBUR’s analysis, the majority of Bank of America's closures have affected branches with fewer than $300 million in deposits (its largest branches here hold deposits approaching $2 billion).
Banks often close branches to save on expenses, but that’s not a service to their customers, said Jesse Van Tol, chief executive of the National Community Reinvestment Coalition, a nonprofit based in Washington, D.C.
"It really does say something about their interest in serving people of more modest means, serving smaller businesses, providing those services — cash services, deposit services — which may not make the bank a ton of money,” Van Tol said.
Banks, especially the national giants, have cut back their branches for years. But Van Tol’s group reported a spike in branch closures far larger than they'd expected during the pandemic. While banks eliminated 11,820 branches nationally in the 10 years before COVID, they closed more than 4,000 just from March 2020 through October 2021.
Banks may want to see customers less often, but they still depend on deposits as a cheap source of cash with which to make loans and generate profits. And they say branches are not going away entirely. But customers are doing more routine transactions online, and banks are eager to keep driving that shift — reserving branches for financial advice and more complex business.
“Transactional banking is increasingly being done on our customers’ mobile devices,” Citizens' head of consumer banking, Brendan Coughlin, said in a statement. “The pandemic simply accelerated the already existing trend.”
Branches are still a leading way to attract new customers. According to Citizens Bank, customers under age 40, who routinely use mobile technology, are still more likely to open an account if there’s a branch near where they live.
Van Tol noted that cutting services at branches can become a self-fulfilling prophecy, driving customers away if there are long lines and insufficient staffing.
“Banks would tell you the narrative of, ‘Nobody's going in the branches anymore,’ and that was especially true during the pandemic,” Van Tol said. “But I go into a lot of branches where there's a line. And these are often low- and moderate-income communities.”
Once a bank has gathered deposits, it has obligations to provide services to those customers under the federal Community Reinvestment Act. The law was enacted in 1977 to encourage banks to “serve the convenience and needs of the communities in which they are chartered to do business.” Its chief aim is to ensure banks make loans to all parts of their markets, including to low- and moderate-income customers who qualify.
Critics of CRA say it’s lightly regulated and hasn’t done enough to improve communities where banks failed for decades to make loans to people with lower incomes. Regulators, who typically conduct CRA exams for banks every two to four years, won’t know the full impact of this COVID-era surge in branch closures for some time.
"There’s a recognition that banking is evolving away from branches. And some of that is probably understandable and appropriate, given changes in technologies. But especially in low- and moderate-income communities, that is going to reduce access."Joe Kriesberg, president of the Massachusetts Association of Community Development Corporations
Federal banking regulators are working to update CRA, in part to reflect changing technology and the decline in physical branches. But closing offices does not relieve a bank of its obligations to customers.
“There’s lots of complexity to how this might play out,” said Joe Kriesberg, president of the Massachusetts Association of Community Development Corporations. “There’s a recognition that banking is evolving away from branches. And some of that is probably understandable and appropriate, given changes in technologies. But especially in low- and moderate-income communities, that is going to reduce access.”
Kriesberg said he was surprised when Bank of America closed its branch in Roslindale, a diverse and mixed-income section of Boston, with two ATMs and a drive-through. He used to stop there for cash on trips to the barber.
“I’ve never been in that branch when it wasn’t packed,” he said, and many of the customers were Spanish speakers.
Kriesberg said community development groups also are concerned about the toll on neighborhoods and Main Streets that lose a major bank branch. “Regulators need to be looking at this closely as they examine the Community Reinvestment Act,” he said.
As banks have mapped out which branches to keep open and where to turn the lights out, they have left gaps for many customers.
Consider the town of Westborough, part of Worcester County with a population of about 21,500. It lost four bank branches during the pandemic — one Citizens and two Bank of America (one of which is still temporarily closed); another was a local institution, Main Street Bank. New Bedford lost seven branches; Quincy lost four permanently and one temporarily.
Customers typically are sent letters about closures, but they don’t always see or read them. Some get the news only when they find a small sign taped to a branch door.
A phone message at a recently shuttered Bank of America branch in New Bedford offers a bland, unapologetic message: “The location you have dialed…is no longer open." It offers a new phone contact and concludes, "Please make a note of the new number.”
WBUR’s Saurabh Datar contributed to this report.
This segment aired on September 21, 2022.