Banking at the Margins: A Geography of Financial Exclusion in Los Angeles

A changing regulatory environment, intensified competition, and the increasingly global and privatised nature of financial markets have taken a heavy toll on the US banking industry. In the 1980s over 1100 banks failed in the United States, more than in any decade since the 1930s. In this paper I examine the relationship between the eroding competitive position of the banking industry and an unfolding geography of financial exclusion affecting one low-income community in Los Angeles. First, I briefly outline the causes of banks' deteriorating competitive position, focusing on the mismatch between domestic financial regulation and the requirements of competition in retail markets through the 1980s. Second, I draw on research, using secondary sources and workplace-based interviews, to describe how some banks in Los Angeles are responding to these pressures by reorganising their production systems at an interregional, intermetropolitan, and intrametropolitan scale. Third, I concentrate on this intrametropolitan scale, documenting the rationalisation of branch networks and the rise of alternative financial institutions in part of South Central Los Angeles. To which communities are banks and their less regulated competitors to be held accountable? By way of conclusion, I argue that regulation needs to clarify this issue while also supporting the development of community-controlled financial institutions that can expand access to financial services in low-income neighbourhoods.