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If you aren't seeing as many bank branches as you used to, your eyes aren't deceiving you: Thanks in large part to bank mergers and a shift to online banking services, thousands of branches closed in 2020. Although no one expects bank branches to go the way of the dodo, more closures are on the way.
Banks closed a record 3,324 branches nationwide in 2020, and opened 1,040, for a net loss of 2,284 branches.
Consumers can do most banking tasks by phone or computer — but not all of them. When a branch closes, you may have to travel farther to get a safe deposit box or a certified check. “These are things that don't come up very often, but rank high in urgency when they do,” says Greg McBride, chief financial analyst for Bankrate.com.
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Where have all the bank branches gone?
During the 2001-2007 housing boom, bank branches were as ubiquitous as Starbucks coffeehouses. “The pattern — particularly in the Sunbelt states — was that they would build a new subdivision, and a new strip mall near the subdivision, and in every one of those strip malls was at least one bank branch,” says McBride. “So there was a branch-building bonanza right alongside the homebuilding bonanza."
The number of bank branches peaked at 92,030 in 2009, according to the Federal Reserve Bank of St. Louis, but that number has declined about 11 percent since then. And the pace has been picking up. Banks closed a record 3,324 branches nationwide in 2020, and opened 1,040, for a net loss of 2,284 branches, according to S&P Global Market Intelligence data. (The data don't include temporary closures due to the pandemic.) U.S. Bancorp shuttered the most branches — 349 — and Wells Fargo shut down 331. California, New York, Pennsylvania, Ohio, Illinois and New Jersey saw the most net closures in 2020.