A Minority Neighborhood Is About To Lose Its Last Full-Service Bank
The planned closure of a bank branch has sparked concern about the impact on a low-income neighborhood in the largest city in western Massachusetts.
Elected federal, state, and local officials have voiced alarm about the decision by TD Bank to close the branch in Springfield’s Mason Square – an historically Black neighborhood where 30 percent of the population lives below the federal poverty line.
"It will be a bank desert with that bank gone," said Springfield City Councilor Trayce Whitfield, who chairs the council’s Finance Committee. " There won't be any more banks."
She said neighborhood residents have told her that they’ve banked at the location for over 40 years and it would be a hardship for them if they have to travel miles to find a full-service bank.
"There's been generational banking that helped grow the business of TD Bank and I think they should reconsider keeping the branch open," said Whitfield.
Whitfield, State Rep. Bud Williams, and State Senator Jim Welch, both Democrats, met with a TD Bank regional director to discuss ways to increase foot traffic at the branch. But she said the bank official gave them no indication the decision to close the location, which was announced in November, might be reversed.
" It feels a little targeted to communities of color and also low-income communities," said Whitfield.
In a statement a TD spokesman said, “We understand that our decision to close the TD Bank store at 958 State Street on January 31 is a change for our State Street customers and Mason Square residents, but they can expect outstanding customer service from TD Bank employees at our other Springfield locations, where we look forward to meeting their banking needs.”
The spokesman said TD Bank has six other full-service offices in Springfield including three that are within two miles of the State Street location where an ATM will remain.
Dave Gaby, a housing advocate, said the closure of the last full-service bank in Mason Square is the result of years of job losses in the neighborhood.
"We had 5-6 banks, we had three supermarkets, we had a regular community business center and we've been decimated," said Gaby.
Once the TD Bank branch closes, there is concern neighborhood residents will fall victim to predatory check-cashing businesses. City Councilor Adam Gomez said that’s what happened in Springfield’s North End – another neighborhood predominately of color – when its last full-service bank closed a few years ago.
"Right now we have ATMs around in stores that are charging folks to get their money," said Gomez.
Massachusetts’ two Democratic U.S. Senators, Ed Markey and Elizabeth Warren, wrote to the office of the U.S. Comptroller of the Currency requesting the agency meet with community leaders to find a way to mitigate the harm that will result from the bank closure.
The Springfield City Council passed a resolution calling on TD Bank to reconsider the planned closure of the branch. There was one dissent.
Pointing to philanthropic projects by the financial services giant and its employees in Springfield, City Councilor Mike Fenton said TD Bank was being unfairly singled out. He said other banks have closed branches in the city without drawing criticism.
In fact, Santander bank once occupied much of the ground floor of an office building across the street from City Hall. There is only an ATM there now.
A large Bank of America office on Main Street closed about two years ago and was replaced by a Starbucks.
According to a report last year by the Federal Reserve, urban communities had a net loss of 5,756 bank branches from 2012-2017.
The report said in addition to the loss of financial services, communities also lose an important source of financial advice, civic leadership, and personal relationships with bankers.