New law spurs banks to serve low-income

TERRENCE T. McDONALD - The Jersey Journal
Monday, February 28, 2011

Legislation sponsored by state Sen. Sandra B. Cunningham that encourages banks to operate in traditionally underserved areas has been signed into law by Gov. Chris Christie.

The legislation is a response to the sudden closure last year of a Bank of America branch in the HUB shopping center on Martin Luther King Drive in Jersey City that left many residents without access to a local bank.

The new law would make banks that open in low-income areas eligible to hold state Treasury funds, and municipalities would be permitted to use them to hold its municipal deposits, boosting the banks' profitability.

Cunningham, who represents all of Bayonne and the sourthern part of Jersey City, said residents without access to local banks are sometimes forced to use check-cashing businesses that charge "exorbitant fees.

"Where there is a bank, sometimes there are jobs available and they usually go to people surrounding the bank," Cunningham said.