WAMU 88.5 : News

Filed Under:

UVA Researcher Looks At Banks' Effects On Neighborhoods

Play associated audio

It might seem obvious that banks are attracted to wealthy areas, but it turns out, they may also help make communities safer and more prosperous. To learn more about that relationship, a researcher at the University of Virginia has been studying what happens when banks leave poor areas, and why credit unions and banks can pay big neighborhood dividends.

As banks consolidated in the 80's, they started closing branches. At the University of Virginia's Tayloe Murphy Center, director Greg Fairchild has studied those communities.

"The areas outside of Northern Virginia, outside of Richmond, outside of general affluence were where the areas where bank branches were likely to decline," Fairchild says.

And when the banks left, he says, predators stepped in.

"These would be check cashers, payday lenders, automobile loan companies, title loan companies," he says.

They often charged very high rates, up to 300 percent on loans, and predatory lenders were not the only ones who took advantage of bank less consumers.

"The lack of banking services made these individuals targets for violent crime – robbery specifically – after paydays,” he says. “Often times you’d find criminals who would bust into an apartment, find the gentlemen that were there with cash in hand, and take that cash with little worry of the police either patrolling at the moment and/or any of those individuals calling the police afterwards."

But when communities had banks, crime rates dropped, and that helped push property values up. Fairchild also found it was possible for credit unions to prosper in poor neighborhoods without ripping people off.

"These are non-profit entities," he says. "There are not shareholders. They're owned by the community, and so often they’re able to offer a lower cost services, and they’re often able to offer better rates."

And he hopes the Commonwealth will take note.

NPR

Jon Stewart, Faking It and Making It

As host of The Daily Show on Comedy Central, Jon Stewart is a funny man with a serious message. Originally broadcast July 22, 2005.
NPR

Humans Aren't The Only Ones To Go Ape Over Diets: Chimps Detox, Too

A group of Ugandan chimps has found a great way to boost their mineral intake and neutralize bitter compounds in their diet: by eating clay.
NPR

Despite High Expectations, Sentencing Reform Proposals Still On Ice

Sen. John Cornyn suggested a hearing and markup on reform proposals could be imminent. But multiple sources tell NPR that concrete language is still being hotly debated behind closed doors.
NPR

WikiLeaks Docs Purport To Show The U.S. Spied On Japan's Government

The documents also allege that the U.S. targeted Japanese banks and companies, including Mitsubishi.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.