By Ed Lowe
Senior writer
They are impossible to miss. The offices of Washington Mutual Savings and Loan have been springing up in the North Side neighborhoods like so many mushrooms after a week of dampness. The Seattle-based company has opened 94 branch offices in the Chicago Metropolitan area and plans to open another 30 in the month of March. This presence makes them a significant player in Chicago’s housing market. Where their branches are located says reams about their local objectives.
Washington Mutual’s rapid expansion in the Chicago area has opened the door to a few questions about their marketing plan. Chicago has lots of branch banks throughout the metro area, but more branches assures greater competition and better borrowing options for residents near those branch operations. However, there’s a need to have them sited evenly throughout the neighborhoods to give all Chicagoans the opportunity to benefit from their presence. Washington Mutual has apparently fallen far short of that sort of equitable distribution of their branches.
By checking their Internet Web site, one can determine the location of their branches from the center of the city. Using State and Madison as a base point, we discovered that the 25 branches of Washington Mutual closest to State and Madison were all north of Roosevelt Road. Of the closest 40 branches, only one was south of Roosevelt — at 712 East 87th Street. The forty locations we checked ran out to a distance of 15.78 miles from the Loop.
Certainly some of their branches are located in lower income areas of the city—one is near the Lathrop Homes public housing project at Damen and Clybourn avenues. That same office isn’t too far from homes that are selling with million dollar price tags. And there’s a persistent rumor that Lathrop Homes will be demolished in 2006 for a new housing development.
There had to be an explanation for this biased distribution of branches and we phoned the company’s Seattle office of media relations. We left a message and, in due course, we received a phone call from Derek Aney, one of the company’s public relations staffers who for some reason is based in New York. Aney did not apologize for the fact that their offices are all on the North Side. “We look at branch openings by income level,” he explained, “and we don’t open many offices in low to moderate income areas.”
Asked what constituted low to moderate income areas, Aney explained that low income areas were those which fell below the median income of the entire metro area. That’s a metro area that includes Lake Forest, Kenilworth, Wayne, Geneva, Flossmoor and other affluent suburbs. In fairness, it also includes Robbins, South Chicago Heights and other poverty stricken towns—most of them south of the city. Aney didn’t define a moderate income area or what criteria were considered when opening an office in one of those locations. Aney was quick, also, to point out that there were 10 offices in those low to moderate income areas. When pressed, however, he admitted that eight of the 10 were outside the city.
Aney urged Inside to wait and let Washington Mutual develop the network they planned, though he admitted that their plan wasn’t written in stone. He asserted that Washington Mutual was “a middle market, working person bank.” I asked him why the vast majority of city offices were in walk-in locations without parking facilities. By having such relatively inaccessible store-front locations, there’s little chance that business would be generated from outside the small radius of the office. That’s one reason for the multiple office presence. It’s also one reason why under-served, minority areas of the city will not be able to easily get to one of the W-M branch operations to apply for a loan. Branch banking isn’t considered by experts to be a “street-car” business.
Technically, what W-M is doing isn’t redlining areas of the city, but it seems to be a legal means of assuring that the company’s business comes from those neighborhoods that it deems suitable for its presence and which are emphatically not “low to moderate income communities.”
Aney pointed to two offices that are in what he called economically depressed communities. One is in “Bucktown” at 1656 West Chicago Avenue and the other
is in the shadow of the United Center at 1301 West Madison Street. The latter location is identified
as a “home loan center.”
How W-M can meet its legal requirements under the Community Reinvestment Act is a matter for Federal authorities to determine in their regular audit of the company’s branches. Whether they have met the requirements of good corporate citizenship is a broader issue for the public’s inspection. If W-M wants to become a part of the financial structure of the city, we have to ask them how much they are contributing to Chicago’s arts organizations, to low-income housing development, and to inner city educational programs. When their answer shows an effort to do more than take profits from Chicago and move them back to Seattle without returning much to the city, we will be able to welcome them with open arms.
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