New Orleans       JPMorgan Chase, the largest bank in the United States, has suddenly in an about-face announced that it will be opening 100 new branches in lower income areas, including in underserved urban and rural areas.  Furthermore, they stated that they are doing so to give communities better options than those provided by payday lenders and check cashing companies.  All of that sounds like great news that ACORN and other organizations long fighting these predatory operations and opposing the closing of branches would normally applaud and full-throatily cheer.  We could say as well that it’s about time, and that it seems too little too late, but even while looking this gift horse in the mouth, I wonder why now and why them?

Earlier, Chase had announced it planned to open 500 new branches.  I assume these 100 are part of that pile.  At 20% of their branch expansion in my mind that dilutes some of this new concern for low-income families as akin to spin.  As CNBC reported:

JPMorgan recently announced a new goal within its multibillion-dollar branch expansion plan that ensures coverage is within an “accessible drive time” for half the population in the lower 48 states. That requires new locations in areas that are less densely populated — a focus for Chairman and CEO Jamie Dimon as he embarks on his 14th annual bus tour Monday.  Dimon’s first stop is in Iowa, where the bank plans to open 25 more branches by 2030.

I’m not sure what the bank’s definition of “accessible drive time” might be, but I am totally clear that is different from making lower income areas a priority.  Maybe I’m wrong, but it almost seems like their real plan of expansion and new branches is dominant, and they are throwing in the low-income branches hoping for a two-fer that gives them extra credit in rankings under the Community Reinvestment Act requirements.  The other tell on their claim to be competing with payday lenders and the like as just spin is the fact that they didn’t announce any new products that would provide competition for those outfits.  They are too smart to believe that people are going to those places just because they are closer, and even so, 100 branches across the country are a drop in the ocean compared to the thousands of check cashing and pay lending storefronts that are everywhere.

In other reports, Chase is clear this is all soft swirl, not hard cash competition:

The new branches will feature the basics of banking — tellers, ATMs, etc. — but also offer services for small businesses and host financial literacy workshops, the report said. In addition, the bank will also hire 75 community managers for some of these branches, people who will work with community organizations and help residents learn how to grow their wealth.  “What we’re doing is a comprehensive approach to lifting a community economically,” said Diedra Porché, head of community and business development at J.P. Morgan Chase.

In fact, it’s clear that Chase is really responding to Federal Reserve criticism of big banks creation of banking deserts and pulling back from CRA requirements,

The report notes that although banks are legally required to offer services and lending in lower-income areas, many have been reducing their presence amid consolidation. And studies have shown the reduction they’ve made to mortgage lending since the 2008 financial crisis have disproportionately impacted nonwhite Americans. A report earlier this year from the Federal Reserve identified the rise of “banking deserts” in the U.S., affecting 12 million Americans. These are locations where banks are outside a certain radius: two miles for urban communities, five miles for suburban communities, and 10 miles for rural towns.

Pew Charitable Trusts estimates that from 2004 to 2021, small-mortgage lending in the 20% of housing stock valued at $150,000 or less, fell by nearly 70 percent.  This is a real problem, and Chase is trying to get us to look the other way as it crosses its fingers behind its back.  As Jamie Dimon says, “This is not just ‘do-gooding,’ this is business.”  In fact, it’s probably clear this isn’t “do-gooding” at all, so no one, especially lower income families, should be confused that Chase has turned a new leaf and is looking after them, as opposed to covering its own rear end.