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The Color of Money

Follow-ups and reaction

Bank's plan to close branch in West End draws criticism

By Bill Dedman, The Atlanta Journal-Constitution

Published October 21, 1988, Page B1

Copyright 1988, The Atlanta Journal-Constitution

Trust Company Bank plans to shut down its West End branch, the fourth time it has closed a branch in a black or integrated neighborhood in metro Atlanta in the past two years.

The proposed closing drew angry protests from the area's City Council member, who has called a meeting Friday afternoon with Trust Company officials.

"The prospect of losing Trust Company Bank's West End branch is an especially bitter pill for us to swallow," Councilman Thomas F. Cuffie, whose 4th District includes the West End, southwest of downtown, wrote in a letter to the bank. "It would suggest a vote of no-confidence for West End and surrounding communities."

Ironically, the branch would be closed Nov. 18, two days after Mr. Cuffie and other Southside business and political leaders hold a symposium on the topic "Relief from the Banking Industry's Commercial Redlining Practices."

Trust Company officials defended the closing, saying the branch at 670 Stewart Avenue S.W. has lost money every year since 1981, lies outside the mainstream of West End traffic and suffers from competition from six other banks in the area.

Trust Company, whose parent, SunTrust Banks Inc., was the most profitable banking company in the country last year, has been criticized by Atlanta community groups who claim it fails to meet its legal requirements under the Community Reinvestment Act of 1978 to serve moderate-and low-income neighborhoods.

Bank officials said Thursday they were pained by the decision -- and the timing, five months after articles in The Atlanta Journal-Constitution described how Atlanta banks and savings and loans made few home loans in black neighborhoods and had withdrawn bank services from black and working-class areas.

"This obviously causes us a lot of heartburn. This is not a decision that we make lightly," said Wade T. Mitchell, executive vice president.

"We have losses of about $900,000 at that location beginning in 1982. The community has not been able to support the branch in a profitable fashion. Or, to turn it around, we have not been able to serve that area at a profit. We have decided to bite the bullet and close it down."

Mr. Mitchell said Trust Company also plans to close at the same time two branches it considers redundant because they are near other Trust Company banks: at Bucknell Drive S.W. and Fulton Industrial Boulevard, and in Piedmont Center Building 11 in Buckhead.

The closings would leave Trust Company with only three of its 49 branches inside the Perimeter south of Interstate 20. In 1986 the bank closed its branch on Wesley Chapel Road after the area shifted from white to black; in Belvedere, which was becoming blacker; and in black East Atlanta, although it kept open 23 branches in white areas with less in deposits.

Mr. Cuffie said the West End closing "would adversely impact the city's ongoing efforts to revitalize the Candler Warehouses." The city is receiving bids for purchase and redevelopment of the city-owned commercial property in the West End.

In a similar situation this summer, Citizens and Southern National Bank considered closing its Stewart Lakewood branch at 2034 Stewart Avenue S.W. After city Councilman Dozier P. Smith and other community leaders protested, C&S kept the branch open.

Trust Company's West End branch opened in 1958, when Stewart Avenue (U.S. 41) was the main north-south route through the city. Since 1958 the interstate highway has drawn away traffic, and the opening of West End Mall and the MARTA rail station has shifted the commercial activity. Six other banks and savings and loans have branches in the West End.

"It's a combination of competition and location," Mr. Mitchell said. "The deposits in the West End office are a little less than $9 million. That might support a much smaller branch than we have."

Banks lose money at a branch when the amount of income from loans and service charges is less than the amount of interest paid out on deposits plus operating expenses. Community activists question whether the branch could have been more profitable if the bank had been more aggressive in making loans in the West End.

"Its true that their West End branch is in a terrible location, but are they going to look at other places that may be more appropriate?" asked Lynn M. Brazen, community reinvestment chairman for the Georgia Housing Coalition, which lost a legal challenge to Trust Company's Community Reinvestment Act record last year. "If they really want to serve the Southside community, they need to be in accessible locations with accessible hours."

The bank said customers with accounts at West End can move to any Trust Company branch. The four nearest branches are more than two miles away: at Five Points, 1700 Lakewood Avenue S.E., 3170 Greenbriar Parkway S.W. and 5150 Old National Highway.


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Reprinted with permission from The Atlanta Journal and The Atlanta Constitution. Further reproduction, retransmission or distribution of these materials without the prior written consent of The Atlanta Journal and The Atlanta Constitution, and any copyright holder identified in the material's copyright notice, is prohibited.


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