WASHINGTON, August 9, 2011—A few years ago, banks were opening new branches in my town faster than you can say, “Suddenly and without warning.”
I was a member of the Planning and Zoning Commission then, an experience similar to being a dentist’s only patient, week after week.
Apparently my town lacked a zoning provision that said every commercial property in town could not become a bank. Much to my surprise, there was no limit to the number of banks that could move into our town. One might argue, for example, that 600 or even 800 bank branches might have been a reasonable limit for a town of about 25,000 residents.
You didn’t have to be a psychic to realize that one bank for every household was too many. I suspected that mere months after banks displaced all the supermarkets, restaurants, pizza joints, and podiatrists in town, they would start to leave.
And now HSBC appears to be proving the point.
As an aside, in our area HSBC built highly distinctive bank buildings: imagine a cross between a giant Valentine’s Day card and a garage. Not the sort of structure that a landlord could easily rent to another business.
Last week, HSBC announced it was selling its entire upstate New York branch network, plus a few branches in other states, including where I live.
Today, word is emerging that HSBC may be on the verge of selling its U.S. credit card portfolio. To translate, this means it wants to sell the business that convinced millions of consumers to use HSBC credit cards, because, after all, HSBC is the world’s local bank.
Since hearing the news, I’ve been trying to figure out what it means to be the world’s local bank. Does that mean HSBC will open, then close, branches in every community, worldwide? Does that mean it will build, then end, relationships with everyone who wants a credit card?
Rumor has it that HSBC is making these moves to focus on its Premier business, which means rich people.
Of course, even rich people aren’t that impressed by boarded up bank branches littered across their town.
HSBC will, no doubt, argue they don’t abandon their bank branches, but one in the next town has stood abandoned for months.
Not to sound inflexible or irrational, but there were certain advantages when local banks were actually local.
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