Hundreds of NJ Banks Have Closed Their Doors Since 2016
Over a five-year period, the number of bank branches has fallen by more than 400 across the Garden State.
Banks say the main reasons are customer-driven, but advocates for consumers say there are plenty of New Jersey residents, young and old, who are being wildly inconvenienced by the trend.
"We want to avoid banking deserts, we want to serve all of the people, not just some of the people in New Jersey," said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action.
While technological advances may be the main reason offered by banks today, Salowe-Kaye said, for years there has been an endless string of bank mergers, leading to consolidation of branch locations and staff layoffs. Banks are also dealing with rising real estate prices.
"There's a definite effect on low- and moderate-income people. They often have to go to check-cashing services, which charge high fees," Salowe-Kaye said. "Small businesses are tremendously affected by the closing of branches that are located near their business."
In early October, Ocean County Commissioner Joseph Vicari wrote a letter to the head of the New Jersey Department of Banking and Insurance, to urge the department to encourage banks to open and maintain local branches, particularly in sprawling senior communities. Ocean County is home to approximately 200,000 senior residents.
"This is a key issue," Vicari told New Jersey 101.5. "I want to protect the senior citizens and their assets."
Vicari added that in-person banking reduces one's vulnerability to scams.
When contacted by New Jersey 101.5, Department of Banking and Insurance spokesperson Trish Graber said the department recognizes the important role that banks play in the community, and that the need to ensure banking access for New Jersey residents is a priority.
"(The department) will continue to monitor the applications made by state-regulated institutions and the impact requested changes could have on New Jersey communities," Graber said.
John McWeeney, president and CEO of the New Jersey Bankers Association, said the coronavirus pandemic has accelerated the transition of customers from using branches to using banks' services on the computer or smartphone.
A national survey from the American Bankers Association in late 2020 found that more than 70% of customers pick a bank's app or the internet as their top choice for managing their bank account. Just 10%, compared to 17% pre-pandemic, chose a bank branch.
"We're seeing the embracement of digital banking from all different age groups," McWeeney said.
According to McWeeney, the number of bank offices in New Jersey was 2,600 in June 2021. In June 2016, the count was slightly over 3,000.
"There are still 116 banking institutions that do business in New Jersey," McWeeney said.
Banks are required to notify their regulator of an impending branch closure. Ideally, McWeeney said, banks would notify a branch's customers as well.