Capital One’s Monticello Avenue Branch Due to Close in October Despite Efforts to Keep it Open

If “food desert” is the buzzy phrase of choice for an area where fresh food isn’t readily available, then the corridor of Jersey City known as the Jackson Hill Main Street Special Improvement District could soon be called a “banking desert.” The Capital One branch located in the historic building at 106 Monticello Avenue is slated to shut its doors in October despite extensive efforts by the city to keep it open.

There is a deja vu element to this story: for the second time in two years, a financially strong national bank has opted to close a local branch in Jersey City’s inner city, much to the consternation of local businesses, residents and politicians. And despite public push-back, bad press and financial incentives, the bank has opted to leave regardless.

In fact, when Bank of America chose to close its location in the HUB along Martin Luther King Drive in 2010, the bank cited the proximity of other branches about a mile away and said the tough economic realities led to the decision. It wouldn’t be a tremendous burden to go to their many other branches, they argued – but that is a position community leaders reject.

“The biggest problem is that we as a community feel like we’ve been taken advantage of,” Assemblyman Charles Mainor said at the time. “We put our money in the local branch and now the local branch is leaving us. We were told it was a ‘corporate decision’ and that’s all we were told.” Despite his and other local officials’ work to keep the bank open, including putting city funds in the bank, Bank of America would not reconsider.

When Mayor Jerramiah Healy, At-Large Councilwoman Viola Richardson, and Ward F Councilwoman Michele Massey met with Capital One representatives recently, they again offered to assist the bank with city money. But despite this proposal, and despite the $20 million of deposits already in the bank, the meeting was unsuccessful.

“No one we met with could answer any of our questions or respond to our proposals,” said Massey. She said she was frustrated by what she described as the “rudeness” of Capitol One, which failed to respond to the city’s request for another meeting. “We asked to meet with someone who could answer our questions but haven’t heard anything back,” she said.

“We asked for the criteria for closing this branch but we were given no real answers,” Massey added. “Was it taken into consideration this neighborhood is in the process of being revitalized? That we began a Special Improvement District and Main Street program?”

But they couldn’t address these questions, she said. Rather, “they just said they’re trying to streamline their operation. But if you must close a branch, why this one? They couldn’t give a breakdown of why this branch versus another one.”

Massey said customers have been “devoted” to the branch. The building has housed a bank for the past 25 years, and many employees have stayed on as the bank’s ownership changed. “They have roots in the community,” she said.

Mayor Healy called the move by Capitol One “yet one more disappointing example of a large bank deserting its customers and the community it serves in a part of our city where seniors and other residents rely greatly on the close proximity of a physical branch.

“We will reach out to other financial institutions, including local credit unions, to see if another entity would be willing to take over the branch,” Healy said. “The City and [Jersey City Redevelopment Agency] are still reaching out to various banks to find a replacement for the HUB.”

This wasn’t supposed to happen again. Senator Sandra Cunningham sponsored legislation directly as a result of the Bank of America vacancy that would allow the state to deposit some of its money into struggling branches to help keep them afloat in places where they’re needed most.

“Their position is they don’t want to stay regardless,” Cunningham told JCI. “This is a case where if the city has any money in their other branches, they should take it out. We’re trying to build up urban areas, not destroy them.”

Equally troubling to the challenge of keeping banks in an area is replacing the ones that have been lost. Despite the city’s ongoing efforts, which by all accounts have been fairly extensive, little progress has been made in finding a replacement for Bank of America, which left two years ago. The prospect of finding a second bank replacement, then, sounds bleak.

Numerous calls to Capital One went unreturned. But in a report in the Jersey Journal, a spokesman called the decision “difficult.”

The company seems to be in strong financial health. Capital One reported a $92 million gain in the second quarter of 2012 and acquired the HSBC U.S. Card business in May. All told, there are $213.9 billion in deposits and $296.6 billion in total assets outstanding as of June 30th.

Perhaps unsurprisingly, Capital One’s reported rationale for closing shop on Monticello was similar to Bank of America’s decision. Tyrone Rose, the head of the Jackson Hill SID, said he was told by bank officials that there are other branches about a mile away. Capital One has six other branches in Jersey City.

But Rose says Capital One doesn’t realize that a mile means a lot for residents of the neighborhood, many of whom are senior citizens or may not have a car. Without a bank, residents could turn to predatory check cashing services, which largely exist where banks do not and take a significant bite out of people’s paychecks.

Not only does Rose’s entire family bank at Capital One, so does his business, Independent Beauty Supply. All told, he said he had 11 accounts at the bank, including payroll, credit card processing, checking, pension and his children’s accounts.

The sheer volume of accounts he has at the bank will make it a challenge to move his business elsewhere. “Not having time to deal with this is the only thing that’ll make me stay [with Capitol One],” Rose said. “Capital One knows I took over this business from my dad, but with a new bank there might be confusion over ownership.”

“This is bad for an area that is trying to redevelop,” he added. “This area has been changing direction, that’s what we’re doing with the SID. Prior to the SID being formed there was movement to redevelop and reinvest in the community, and now that can all be for nothing.”

It’s a sentiment echoed by New Jersey Policy Perspective (NJPP), whose spokesman Jon Whiten said the consequences are far-reaching. (Whiten is the former editor of JCI.)

“We understand that the profit margins in operating a bank in a lower-income area aren’t as high as in other areas, but the service is incredibly important economically to residents in those areas,” Whiten said.

“In many cases, this is the only access a resident has to fair credit. When it’s tougher to get to a bank and obtain that credit, consumers will either turn to less-formal means of credit that come with harsher terms – like payday lenders – or they opt to not pursue credit at all. When they take the latter option, the local economy suffers, as that means folks aren’t spending money to fix up their house with a home equity loan, or start a small restaurant with a small business line of credit. And the neighborhood suffers as well when those improvement projects don’t happen because a local resident couldn’t easily access credit.”

Rose said he was also concerned about the fate of the historic building that houses the bank. “Does it become a dollar store? This building predates 1938, it has a classic design of a marble interior with high ceilings,” he said. “Are they selling building? Are they looking for another bank?”

But the bank’s attitude is not surprising to Brad Stone of the nearby business Gladstone Locksmiths, who uses the bank for his personal accounts.

Stone said Gladstone used to service the branch when it was the Trust Company of New Jersey. But ever since it was sold to a large corporate bank, they “use different people” for the work.

“We’d get called in because were the local locksmith,” said Stone. “But Capital’s policy is to go through the main branch. The local branch doesn’t have the option anymore. There are only certain people that service their banks, so we lost that neighborhood business” over eight years ago.

Stone says he “would like to see another bank” take up shop there. “It’s ideal for a bank, what else would go in there?”

In the meantime, Cunningham has not ruled out future legislation. Some possibilities include penalizing banks, but she said it was too early to speculate on the details.

Photos by Jennifer Weiss

Matt Hunger

is a former staff writer for the Jersey City Independent.