Run into more customer service bots lately? Let Marketplace Tech know. More info

Citigroup cutting back on new branches

Steve Tripoli Jan 25, 2008


Scott Jagow: Citigroup had billions of dollars in losses and write-downs from the subprime mess. It’s also scaling back on opening new branches now. Maybe the two are related. Here’s Steve Tripoli.

Steve Tripoli: News of Citi’s cutback on new branches came the same day as an announcement by odd political bedfellows.

Former President Bill Clinton and California Governor Arnold Schwarzenegger have teamed up. They’re calling for more bank services in low-income communities. The goal is to save consumers from high-priced alternatives, like check cashers and payday lenders.

Gail Hillebrand at Consumers’ Union says poorly-served communities may take a hit as banks cut back.

Gail Hillebrand: I think there is potential for there to be a lot of collateral damage for low and middle-income consumers who don’t have subprime mortgages, as banks try to ratchet up their income streams and cut their expenses. Branches will be one of those.

Hillebrand says fewer new branches aren’t the only worry:

Hillebrand: We all should be watching out for new credit card fees of various kinds, and higher costs for credit generally.

So bank customers, and potential ones, may end up indirectly footing some of the banks’ subprime clean-up bills.

I’m Steve Tripoli for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.