J.P. Morgan Chase may close up to 50 branches, possibly including four in low income areas of New York City, once the Office of the Comptroller of the Currency seals its deal to purchase Bank of New York’s 338 retail branches in the tri-state region. The bank maintains it has yet to make any decisions regarding specific closures, but given the locations of Bank of New York’s offices activists surmise that they will likely be in Queens or the Bronx. The branch closings are part of a $3 billion business swap, with J.P Morgan Chase snapping up Bank of New York’s entire branch system while Bank of New York purchases J.P Morgan Chase’s corporate trust division. While this transaction may promise profits for the two banks, the switch could prove dismal for some low-income consumers and minorities. “As the number of competitors is reduced, prices rise,” said Matthew Lee, executive director of Inner City Press/Fair Finance Watch, which has protested the deal. “There’s not only an inconvenience for underprivileged, but a new generation of people who, if they don’t end up using a bank, don’t develop financial and credit history which can be used against them if they apply for a loan. It’s a vicious circle.” The watchdog group has faulted J.P. Morgan Chase for overcharging minority borrowers in the past. In 2005, for instance, Fair Finance Watch released a report showing that J.P. Morgan Chase steered a greater percentage of Latinos and African Americans to higher cost loans than the bank did with white borrowers. Tom Kelly, a J.P. Morgan Chase spokesperson, disputed Lee’s findings. “We review every application based on the financial qualifications of the customer, including credit history, down payment, product choice, and time in job,” he said. “We treat every customer fairly.” Kelly told City Limits that any branches that would be shut “are located close to a J.P. Morgan branch.” Still, he said, the bank has not made any firm decisions about which branches would be shuttered and would not be doing so until 2007, when they are due to be fully integrated into the Chase network. [06/05/06]
This story has been corrected.