San Francisco Business Times
By Mark Calvey
California Bank & Trust said it will close its branch in East Palo Alto on Aug. 26, moving accounts over to its Mountain View office 8.5 miles away.
The closure is a significant loss for economically troubled East Palo Alto.
“Normal-course-of-business requires the bank to balance service delivery with operating efficiencies, profitability, and competitiveness,” said bank spokesman Steve Borg. “After careful evaluation of our business practices, the historical performance of the branch and long-term profitability prospects, the decision has been made to close the East Palo Alto office.”
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California Bank & Trust said it is primarily a business bank that serves a broad territory from its branches.
“We are confident that we can better service the mid-Peninsula community, especially businesses, and our customers from our Mountain View and San Mateo offices,” Borg said.
“We’re very sorry to hear the branch is closing,” said East Palo Alto Mayor Carlos Romero. He said the city, which banks with Wells Fargo (NYSE: WFC) plans to put out a request for proposals for banking services later this year that might encourage banks to expand banking services in the community.
Advocates of extending banking services into poor communities says the loss of a branch has major ramifications.
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“When a branch closes in a community like East Palo Alto, that sends the bank’s customers to check cashers, payday lenders and alternative financial services that are less regulated, so residents lose protection as well as services,” said Preeti Vissa, community reinvestment director at the Greenlining Institute in Berkeley.
The closure affects five employees, which the bank is trying to place at other branches. California Bank & Trust is a unit of Salt Lake City-based Zions Bancorp. (NASDAQ: ZION)
The branch closure’s announcement Friday evening was a far cry from the fanfare in which the East Palo Alto branch opened almost a decade ago.
In May 1999, California Bank & Trust issued a press release announcing its intention to open a branch in East Palo Alto, noting that it had been more than a decade since the city was served by its own bank branch.
“Opening this branch is a win-win for both the city and the bank,” the bank’s top brass said, noting that the branch was expected to open by Sept. 30, 1999.
In February 2001, California Bank & Trust issued another press release saying its East Palo Alto branch would open by year-end.
“With the bank’s expertise in community development and fostering of local businesses, we are excited to provide residents with new opportunities,” a bank executive said at the time.
Finally in April 2002, the bank announced the ribbon-cutting ceremony for the East Palo Alto branch that had opened its doors two months earlier.
“We’re not just in the community, we’re part of it,” an executive said. California Bank & Trust noted at the time that the East Palo Alto location was already exceeding expectations with a “steady stream of new clients who are pleased to have a local bank that they can call their own.”
The bank also noted that until it opened the branch, East Palo Alto had been the largest “unbanked” city in the nation.
But the bank’s foray into East Palo Alto ended last Friday night with a one paragraph email missive announcing the branch closing.