How financial institutions can address Greater Rochester’s wealth gap – Rochester Beacon
The wealth gap between communities in the U.S. and here in Greater Rochester is no secret. According to ACT Rochester’s “Hard Facts Update,” which analyzes U.S. Census data, Black and Latino residents locally face greater challenges to building wealth and economic opportunity, earning roughly 50 percent less than white residents. Homeownership is considered a meaningful way to build equity and stability, but homeownership rates in Greater Rochester for Black and Latino populations are less than half that of white populations—32 percent and 35 percent, respectively, in the nine-county Greater Rochester region compared to 73 percent among white residents.
Marcelina Nobrega Courtney
This disparity seeps into other areas of financial services as well, hindering the ability to build wealth through other means. According to most recent reports, approximately 20 percent of Rochester residents are either unbanked or underbanked, and the Black and Latino communities are the most significantly impacted. Alternative financial services—including check cashers, prepaid cards and payday lending—often fill the gap for these residents, but they can come at a much higher price tag when compared to traditional financial services.
As a community of forward-thinking leaders and change makers, we need to examine and address the barriers that perpetuate this gap in economic prosperity and join together to implement tangible solutions that help all communities thrive financially. Steps taken over the last year by ESL offer an example of what financial institutions can do to address the wealth gap.
Physical access and proximity to financial services must be one of the solutions to address these inequities. Over time, many financial institutions have divested in physical branch presence within the city of Rochester, leaving residents with few options. In April 2021, ESL made a commitment to Rochester, announcing the construction of our first new branch within the city since 2010. Our intent is rooted in a commitment to the community and to ensuring city residents have access to financial products, services and education that meet their needs.
The new branch opening soon on Lake Avenue in the Edgerton neighborhood will be an accessible option for pedestrians and vehicles, and marks the first of three branches ESL plans to build in the city (the other two locations are still being determined).
While the use of digital and mobile banking technologies continues to increase, many in our community still rely on access to brick-and-mortar branches to conduct their banking needs. Prior to the pandemic, ESL saw, on average, steady decreases in branch traffic each year for routine transactions, but at the same time saw an increased need for consultative services. Front-line staff should be equipped with the knowledge and resources to help customers learn how to become savvier borrowers and build credit, supporting further financial education. </…….