February 23, 2011

Because that's where the money isn't

The centerpiece story on NYTimes.com is:

Bank Closings Tilt Toward Poor Areas
By Nelson D. Schwarz

Government data shows that as banks shut branches in poorer areas last year, like an Ohio Savings Bank in Cleveland, they expanded in richer neighborhoods. 

Perhaps Willie Sutton could have explained this strange phenomenon.

Reading this article reminds me that there is a sizable infrastructure of academics, activists, corporate staffers, and government officials whose jobs revolve around checking up on mortgage lending to make sure enough money is going to the right sort of people. We have a sizable apparatus of people employed to nudge mortgages in only one direction.

In contrast, far fewer people get a paycheck for complaining that, say, Apple Stores aren't opened in Compton. For example, the three Apple Stores on the Apple website listed as being in Los Angeles are at The Grove, the Beverly Center, and Century City, which aren't exactly fully representative of Los Angeles. At minimum, Apple, which has a colossal amount of cash on its balance sheet, should be required to run free buses from the corner of Florence and Normandie to the nearest Apple Store.

40 comments:

Anonymous said...

No, clearly it's discrimination. It's ATMism.

Anonymous said...

I certainly hope that it wouldn't be considered rude to inquire as to whether there were any Harvard, Yale, or Princeton graduates anywhere along this story line?

goatweed

Anonymous said...

Sorry, but Glenn Reynolds had a link to Cal Tech ending their 310 game conference losing streak (LA Times).

goatweed

Anonymous said...

"Reading this article reminds me that there is a sizable infrastructure of academics, activists, corporate staffers, and government officials whose jobs revolve around checking up on mortgage lending to make sure enough money is going to the right sort of people."

Diversity has become an unaffordable expense.

No Justice, No Peace said...

You should start an activist campaign on your website to target hypocritical SWPL businesses everything junk articles like this surface.

Play it straight and you may even get some doe eyed leftist journo to bite on it as a real concern.

* Wholefoods
* Williams-Sonoma
* etc

Maybe you could get in on the Jessie Jackson shake-down biz and get paid off for turning down/off the heat?

Anonymous said...

Well, the right sort of people just steal all the Apple products they need anyway, because they are so portable and there is so little paperwork.

Mortgages are different, see.

Anonymous said...

In contrast, far fewer people get a paycheck for complaining that, say, Apple Stores aren't opened in Compton
maybe that's why 'youths' have to steal them in Brooklyn (one of the most common petty crimes in brooklyn - SWPL talking on 4g, gang of 'yufs' assault, steal 4g

Bonus Gift said...

Basic economics must be turned on its head or else how can the multicultural diverstopia expand? I for one will be glad to see this type of silliness in the rear view mirror. Actually, at least one upside of the depression will be when the state and federal credit cards are cut and these types of unsustainable silliness at least begin to fade away.

Captain Jack Aubrey said...

Per capita, fewer people in poor neighborhoods even bother to have bank accounts. I used to manage the payroll for a restaurant with a kitchen staffed almost entirely by black workers (except for the SE Asian dishwashers, who the blacks HATED). The checks were drawn on a bank with a branch right across the street from the restaurant, but most of them still took their checks to check cashing businesses and paid for the privilege.

The new law banning overdraft fees means that bank branches in poor neighborhoods will be even less profitable, because that's where much of the profits were for those branches.

And, back of the envelope, I'd wager that a customer in even a middle class neighborhood will generate business and profits 1-2 orders of magnitude higher than a customer in a poor neighborhood. A poor customer may have a small checking account (frequently drawn to near zero) and perhaps an auto loan. In a middle class neighborhood he'll have a savings account, a checking account, an auto loan, a mortgage, and maybe a credit card and a few CDs.

And demanding that Apple and Whole Foods start opening stores in "vibrant" neighborhoods is brilliant.

Anonymous said...

I believe that this is the topic under discussion at this meeting of interested parties at a convocation of concerned citizens.
See here.

Albertosaurus

JeremiahJohnbalaya said...

[no] Apple Store ... in Compton

But, there's a Mac Mechanic in Santa Barbara's gay hooker district.

Jonathan Silber said...

Last time I wandered in the Sahara, I could not find a single ATM, much less a branch office of any major bank.

Fat cat bankers conspire to keep the Berber down.

My exposé on the subject is posted at Fezbook.

Larry, San Francisco said...

What is interesting that the financial reforms that Democrats passed put a severe limit on interchange fees (which banks get) for Debit cards (from 2.4% to 0.12%) causing debit to be a money loser for banks. The loss of this revenue will cause more banks to move out of poor areas. Of course that effect will ultimately be blamed on the greedy banks.

Anonymous said...

"Apple stores in Compton"


Thats a great idea! I'd LOVE to see Silicon Valley *forced*, like banks, using diversity as a ruse, to open some operations in "underserved" areas, just like the CRA-banks.
In fact, why are they allowed to move their manufacturing operations to China, which is doubleplusnotgood diverse, when they should be *forced* to benefit from the diversity they say is so good for everybody else. I think South Atlanta/Detroit/Gary/E.St.Louis would be a great place for Intel to be made to make chips. How could they refuse? They aren't racist or anything are they?



As NoJusticeNoPeace suggested: Where is the WholeFoods Stores in da'hood? Where is ColdStone Ice Cream? They need to be "diversity-affirmative" like they tell everyone else to be.

Anonymous said...

Or rich liberals can move into poor areas and banks will follow.

Anonymous said...

so you're for free-market and less government??


weren't you JUST against the free-market just a couple of blog posts ago??

John Seiler said...

Why don't we drop interest rates to near zero and use Fannie Mae and Freddie Mac to funnel tens of billions of dollars into subsidized home loans in poor areas? Wait. Never mind.

Anonymous said...

OT.

http://ngm.nationalgeographic.com/print/2011/03/taming-wild-animals/ratliff-text

"If Andersson's theory is correct, it may turn out to have intriguing implications for our own species. Harvard biologist Richard Wrangham has theorized that we, too, went through a domestication process that altered our biology. 'The question of what is the difference between the domestic pig and a wild boar, or the distinction between a broiler chicken and a wild jungle fowl,' Andersson told me, 'is very similar to the question of what is the difference between a human and a chimpanzee.'"

How disingenuous. The difference between a wild boar and a domesticated pig or between a wolf and a dog is more like the difference between a black African and a white European, not between human and chimpanzee. But to speak the truth would be 'racist'.

Kylie said...

The NYT would have us believe that the bank branch gap is actually a worse threat than the mine shaft gap.

More than faintly pink, if you ask me.

poolside said...

When I go to my local Wells Fargo and look around at all the marketing posters, tent cards, ATM screen images, etc., I never, ever see any white people portrayed. It's the same thing on their website.

It's almost as if they don't want my business.

Anonymous said...

Is there a map showing the distribution of New York Times newspaper boxes?

Captain Jack Aubrey said...

"I never, ever see any white people portrayed. It's the same thing on their website. It's almost as if they don't want my business"

Then why do you give it to them?

My bank's ATM has a model who looks like Elle MacPherson (minus about 15 years). I approve.

Most banks are pretty PC, but in my experience Wells Fargo is one of the worst.

Anonymous said...

When I read your magazine, I don't see one wrinkled face or single toothless grin. For shame! To the sickos at `Modern Bride' magazine.

Paul Mendez said...

No Justice, No Peace has hit upon a long-held fantasy of mine.

When I win the MegaMillions lottery, one of the things I will do to amuse myself is create my own phony civil rights/community organizing group. Then, I will issue angry press releases and organize loud street protests demanding that liberal white organizations be even MORE liberal.

Why aren't there any REI outlets in the `hood?

Why doesn't SPLC, Ford Foundation, etc. have upper management that "looks like America"?

Where are the black commentators on MSNBC?

(Actually, a good shakedown would be for a bunch of legitimate nonprofits that fight southern poverty to quietly demand SPLC give them millions or they'll raise a stink about how little money SPLC actually gives out in grants.)

Anonymous said...

Oh no, will it be harder for poor people to get loans now ;_;

that's so sad

Marc B said...

"When I go to my local Wells Fargo and look around at all the marketing posters, tent cards, ATM screen images, etc., I never, ever see any white people portrayed. It's the same thing on their website."

It's the same phenomenon you in almost all advertising everywhere, (except ads developed specifically to make white men look pathetic) and Target is among the most brazen about it. I call it "where the white males at" marketing. White people are already so used to being marginalized that they'll still do business with companies even if they happen to notice this, and that is a big if.

Anonymous said...

I just watched for the ten-thousandth time, one of those house hunting/home remodeling shows, where the attractive couple looking for a new home or remodeling their existing home is: a) black male/white female couple or b) a gay couple. Yes, this happens ALL the time.

Wilson said...

Reminds me of another famous liberal clueless-over-an-answer-directly-in-front-of-your-face article (I believe also from NYT) where they were puzzled about crime going down when incarceration rates went up.

none of the above said...

The house hunting shows seem to have a wild mix of people--single people buying houses, couples of every gender and racial combination possible, etc.

The really cool shows along those lines are the international house-hunting ones, where you get some Americans wandering around in Costa Rica or Vietnam looking for a house. Maybe it's just my middle-class, middle-aged boringness, but the risk tolerance implied by sticking your life savings into buying some fixer-upper in the third world kind-of blows my mind.

Kylie said...

"When I go to my local Wells Fargo and look around at all the marketing posters, tent cards, ATM screen images, etc., I never, ever see any white people portrayed. It's the same thing on their website.

It's almost as if they don't want my business."


I find a lot of businesses are that way. And when they are, I don't give them my business. Dove soap is really bad. One could conclude from their ads we live in a black-majority country. I'd wash with lye soap before I'd buy or use their products. Tide is another one.

And I agree that Wells Fargo is one of the worst offenders.

none of the above said...

I have always wondered something about this. Did the decisionmakers that drove the whole anti-redlining policy push really *believe* the idea that the mortgage industry was irrationally discriminating against blacks? Or was this one of those things that individual decisionmakers found it convenient to pretend to believe, for their own reasons?

Steve Sailer said...

For a certain number of people, alleging discrimination in mortgage lending is a living. The system pays a tiny percentage of all the vast quantity of money that flows through it into the hands of activists. For a number of social scientists, the system either pays for their job or pays for them to go to expense account conferences and give papers.

The system doesn't pay for any third parties to worry about whether too much money is going to lower income and minorities. Private business people can worry about it, but they better not put their worries down in emails or anything else subpeonable.

Anonymous said...

I live in Ohio and used to bank at Ohio Savings. To nitpick the NYT, Ohio Savings was the last family-owned bank in the state and, when it expanded into Florida about five years ago, changed its name to AmTrust. AmTrust was seized by the FDIC last Fall primarily because of its commercial loan business in south Florida. Maybe that's not just nitpicking, but a huge miss in the NYT story.

Anonymous said...

Correction to my post above re: Ohio Savings. The FDIC took control in Fall 2009, not last year. The mortgage business went to a bank in New York; Ohio based personal and commercial accounts to WesBanco, a West Virginia-based company.

none of the above said...

Kylie:

I wonder how much the jarringness of the ads has to do with the ethnic mix where you live. Moving from the midwest to the DC area, I saw the ethnic mix where I lived change radically. It's not the least bit unusual to go to the library or post office or coffee shop here, and be the only white person among half a dozen customers.

And this is not a bad part of town. It's not you and ten black kids from the ghetto, it's you, a middle-class black kid dressed ghetto to annoy his parents (while doing his math homework in Starbucks while listening to his iPod), a Chinese couple talking quietly in a corner, three loud Africans (not much like American blacks at all!) having a conversation involving a lot of laughing, two high school girls of some complicated mixed race (East Asian/European?) ignoring their homework while texting their friends, the black Caribean kid behind the counter trying to flirt with the cute Mexican girl getting a cup of coffee in bad Spanish, etc.

The point of all this is, the ethnic mix that looks natural once you've lived here awhile isn't at all what, say, Iowa or Wyoming or Utah or Missouri look like.

Advertisers and executives mostly live on the coasts, with an ethnic mix more like where I live. So some of the ethnic mix in their ads may be ideological, but I suspect a lot is also just reflecting a different set of background assumptions.

No Piece, No Justice said...

Most banks are pretty PC, but in my experience Wells Fargo is one of the worst.

Bank of America

Kylie said...

"none of the above said...
Kylie:

I wonder how much the jarringness of the ads has to do with the ethnic mix where you live."


Yes, I live in a small town in a flyover state. But I came here from a liberal college town with, thanks to its generous social safety net and numerous foreign students, was multi-ethnic.

"The point of all this is, the ethnic mix that looks natural once you've lived here awhile isn't at all what, say, Iowa or Wyoming or Utah or Missouri look like."

Actually, that multi-ethnic college town is in Missouri but I take your point. And while the ethnic mix there did come to look natural to me, once my husband's job took us to a far more homogeneous area, I found I revelled in the civility and lack of tension--and crime--of our new home.

"Advertisers and executives mostly live on the coasts, with an ethnic mix more like where I live. So some of the ethnic mix in their ads may be ideological, but I suspect a lot is also just reflecting a different set of background assumptions."

Here is where we part company. If I, in a small town in a flyover state, know that the US is still a majority white country--and not just, say, 51% white--surely those executives must know the same. I suspect much if not all of the push to portray the US as not merely multi-ethnic but minority white is deliberate.

Anyway, thanks for addressing my points.

Anonymous said...

NJNP, you are correct, BOA is the worst. My branch in my 95% white town is full of the black couple posters, with the added bonus of tellers of indeterminate ethnic derivation. I once made the mistake of calling the help line in Charlotte; I truly need a translator in Ebonics.

Steve you are absolutely correct about third party activists. NACA head and all-time POS Bruce Marks is the poster boy for that type, and I hold him personally responsible for the phony Boston Fed report about redlining that was so instrumental in causing the mortgage bubble.

Brutus

Eric said...

Poolside, that depends heavily on the management's perception of your neighborhood. I see the inside of a LOT of different Wells Fargo branches due to one of my jobs installing equipment upgrades. The promotional materials vary wildly by perceived mix of the neighborhood. Wells has materials to cover just about any group to generate a significant demographic blip.

The personnel vary as well. There was a branch I worked on last year in a section of LA whose was almost entirely Russian immigrants. In Glendale last week, everybody was first or second generation Armenian. No surprise there.

David said...

Don't give them any ideas.

But seriously, it's Bill Gates's and Microsoft's job to dump obsolete and near-broken free computers on NAMs.