The Harbor Bank of Maryland opened a new branch in the Northwood Commons on June 19, 2022.

If Anita Cathcart needs to go to the bank, she has to leave her Allendale neighborhood in Southwest Baltimore and travel 30 minutes round trip to a branch at Ingleside Shopping Center. Luckily, she has a car, but not everybody in her community does.

“[With a local bank], at least our senior citizens get access to banking without having to drive or have someone take them. … They’d be able to have easier, closer access to safe banking,” she said.

Cathcart’s isn’t the only neighborhood without a bank. Since the 1960s, West Baltimore continues to have the most communities lacking a local bank branch. While 89% percent of city residents have a bank nearby, only 54% do in West Baltimore, according to an analysis by The Baltimore Banner of data from the FDIC and the Census Bureau.

These neighborhoods are often largely African American, have lower income and include homes with lower values, according to the data. The numbers highlight the barriers that have historically affected certain communities that have faced decades of underinvestment and redlining by the very banks that have made their neighborhoods financial no-man’s-lands.

Compared to banked areas of Baltimore, median incomes in unbanked areas are $21,000 lower, median home values are $88,000 lower and the proportion of Black residents is 25% higher.

It’s just not neighborhoods in West Baltimore that are underbanked. African American neighborhoods in other parts of the city also have bank voids.

Recent bank openings show financial institutions trying to fill the gaps in some of these Baltimore neighborhoods, even as banks in general have fewer brick-and-mortar stores as digital banking has become more popular.

The Northwood neighborhood welcomed the opening of Harbor Bank of Maryland on Juneteenth this year, and Mondawmin Mall awaits a Chase branch expected to open this fall. Both banks are nestling into retail enclaves that flourished in their heydays but over the past few decades have declined.

Until the 1960s, Black people were not welcome at the then-Northwood Shopping Center, which makes the Black-led redevelopment of the center and the Black-owned bank significant in the Northeast Baltimore neighborhood.

Samuel J. Deal, honors program director of Morgan State University’s Earl G. Graves School of Business and Management, said Harbor Bank has an “arsenal” of resources for the Northwood community.

Deal worked for Harbor Bank for over 10 years and noted that its Community Development Corporation, which, according to its website, is a nonprofit and U.S. Treasury Certified Community Development Financial Institution, is focused on accelerating development in underinvested communities throughout Greater Baltimore. Harbor Bank, he said, has also received New Market Tax Credits, which allow for significant low-income community investments.

“With these tools, they’re now able to come to Northwood, and put in investments that help individuals, students, businesses, and institutions in ways that just a quote, unquote normal traditional bank can’t,” Deal said.

The Community Reinvestment Act encourages federally insured banks to aid the credit needs of their entire community, including low- and moderate-income ones. Its 1977 enactment succeeded discriminatory practices from banks that were less likely to give African Americans loans — and when they did charged higher interest rates — and practiced predatory lending. Distrust of banks still exists in some of these neighborhoods.

An absence of banks is often a sign of other disparities in communities, said Philip Merrill, CEO and founder of Nanny Jack & Company, an African American heritage consulting business. The communities are often in food deserts and face policing, environmental and sanitation issues, he said.

Seema Iyer with the Baltimore Neighborhood Indicators Alliance said that storefront banks, like any retail institution, are partly reliant on population density, which West Baltimore has had less of as the city’s population has declined.

“Having a local bank in your neighborhood is an attractive feature that could lead to other things. And when you don’t have that, it just becomes a huge void,” Iyer said.

The Brooklyn neighborhood is grappling with that void after a Bank of America branch closed in December 2021, leaving the neighborhood with less access to banking products and concerns about how a vacancy in a main thoroughfare — East Patapsco and Hanover Street—would be used. Several shootings occurred near blighted, vacant areas of Brooklyn earlier this year.

While Northwood and Mondawmin get new banking opportunities, a general decline in the use of storefront banks has exacerbated the problem with most banking deserts. The National Community Reinvestment Coalition found that two-thirds of banking institutions in the U.S. have disappeared since the 1980s, dropping from nearly 18,000 in 1984 to fewer than 5,000 in 2021. According to the NCRC, Baltimore was among the top 50 metro areas with the most bank branches in 2017. By 2021, it lost at least 96.

Robyn Dorsey with the Maryland Consumer Rights Coalition said her organization gets involved when a bank plans to leave a community and there’s concern about that loss. The goal is to get commitments from the financial institution about how it’s going to serve communities without those branches. It leans into the “community reinvestment framework” of the Community Reinvestment Act.

There is often untapped opportunity in neighborhoods that don’t have enough banking options.

The Federal Deposit Insurance Corporation found that approximately 7.1 million households did not have a checking or savings account with a bank or credit union in 2019. According to Bank On Maryland, which is led by the nonprofit CASH Campaign of Maryland, being unbanked for a lifetime can cost $40,000 because of fees associated with check-cashing places or payday loans.

Sue Rogan with the CASH (Creating Assets, Savings and Hope) Campaign of Maryland said the Bank On Maryland program aims to reduce the number of underbanked or unbanked families in Maryland by ensuring that more statewide financial institutions offer accounts that meet the Bank On National Account Standards.

“[The certified accounts] are meant to be very safe, very affordable and help people get into that relationship with a financial institution,” Rogan said.

Merrill said African American banks in the 1920s and 1950s often service underbanked communities, including Dr. Winfred O. Bryson, a professor at then-Morgan State College who founded Advance Federal Savings and Loan Association, later called Advance Bank, in 1957. It was acquired by the Municipal Employees Credit Union of Baltimore (MECU) in 2013. Merrill said banking efforts of the past can inform the financial accessibility straits communities are facing now.

“If we just use [our past] as a blueprint, it can cause us to be successful again, in the present and in the future,” he said.

It is not enough for these banks to provide financial services when they move into these communities, residents and organizations say; they need to have a deeper investment in communities.

Investment opportunities and incentives are factors Eric and Lynette Dodson, neighbors in Northwood, look for in a bank. Their various accounts complement their personal and professional lives as small business owners of Cuples Tea House.

The Dodsons were Harbor Bank customers before their local branch closed. They’d consider building a financial partnership with the Northwood location if their financial needs and wants are met and the community is prioritized.

“We want a bank to come into the community and help the community understand finances and financial resources. I think if a bank understands the needs of its community, it could better help its community,” Eric said.

He continued, “I think that’s why it is important to have a Harbor Bank in a community like ours.”

The Chase branch coming to Mondawmin will be a Community Center branch, aiming to play an important role in the financial health of individuals and small businesses in the surrounding neighborhoods.

In 2021, Chase committed $30 billion by the end of 2025 to advance economic growth and opportunity for Black, Hispanic and Latino communities. At least 30% of their branches are in underbanked and underserved communities, Melvin Collins, a Chase Baltimore market director said.

While banks like Chase and Harbor Bank of Maryland want to position themselves as staples and resources in communities with their storefronts, Iyer said physical accessibility to banks differs from the root need from neighborhoods.

“People need financial access to financial resources, which is a slightly different issue than having a storefront,” Iyer said.

To do our analysis, Baltimore Banner data reporters scraped the FDIC website to get addresses of all the banks in Baltimore. They then geocoded addresses using software to turn addresses into latitude and longitude pairs. Using the substantial amount of data available through the Census Bureau, including digital maps, data reporters were then able to calculate which census tracts were within a half-mile of those banks. Census Bureau estimates for median income, home value and race were used to calculate the differences in those variables for tracts that had a bank nearby versus those that didn’t.

Data reporter Ryan Little contributed to this article.

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