It’s official (sort of): the bank branch is back

Breathing life into branch banking
I’d like to think that the bank branch is making a comeback. The bank branch is iconic. Most towns have at least one. Think of all the famous scenes in movies that have taken place inside a bank branch, whether it’s the bank run from It’s a Wonderful Life or the madness of Dog Day Afternoon. Some years back we even wrote a post about the ten greatest bank movies (which, weirdly, has only eight entries.)

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The bank branch is an American institution, but like so many other institutions it’s been moldering in the face of technology. In the roughly two decades since the advent of the smart phone, the number of bank branches in the U.S. has gone in one direction: down.

Until now. For the past three quarters, the number of bank branches in the U.S. has actually increased, as our Nathan Place reports. In the second quarter, there were 13 more bank branches opened than closed, according to the nonprofit National Community Reinvestment Coalition. Over the past three quarters, 120 more bank branches have opened than closed. 

It’s hard to say that this is a permanent trend, but it does at least show that banks still see value in the old, physical, brick-and-mortar branch building. JPMorganChase has been running a whole ad campaign touting its branches. In one of them, a forlorn man goes through the motions of life in the modern world, having a series of miscommunications with his digital home assistant, his self-driving car, and the robot making coffee at the shop. Frustrated with all the technology, he is relieved to find a living, breathing person at the local JPMorgan branch who wants to help him fulfill his financial goals. 

I wrote a few months back about the local bank in my hometown that I still visit. I said then that banks must still see the value of forging real relationships with their customers, and my bank stands as a testament to that, a grand building that sits in the middle of town, designed in the columns-and-marble classic style. The kind of place you can expect will be there forever, a true caretaker of your money and future. Just like in the ad. 

Yeah, about that. So, I wrote that in April. Last month, the bank announced they are closing the branch in October.

Home equity
I was talking yesterday about the credit market and how important it is. Economies, it seems, are always navigating between Scylla and Charybdis to some degree it seems (and no, I haven’t actually seen Nolan’s The Odyssey yet). But as long as the credit market is stable, we will eventually move straight.

Our colleague Spencer Lee at National Mortgage News has a story that sheds some light on the mortgage market. The good news is that home equity among mortgage holders in the U.S. hit a record high, $18 trillion, according to the home-lending unit of Intercontinental Exchange. The new record level came courtesy of rising prices, and 48 million homeowners now have a collective $11.7 trillion they can tap for loans, ICE said. 

But the report also has a downside. The number of mortgage holders who are underwater – their homes are worth less than they owe – surged 44%. It’s a small subset, about 813,000, of the 48 million total. But that’s a big jump. And total mortgage debt in the U.S. is about $13.5 trillion, which puts that $18 trillion figure in a somewhat different light.