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Experts Say Shift In Business Towards Online Banking May Be Driving Local Branch Closures

GARWOOD, N.J. (CBSNewYork) -- Some Citibank customers say finding a neighborhood branch is nearly impossible.

Branches in Union County have been shutting down, one after another.

"There's no branches and it's very disappointing," Rachel Lipschutz told CBS2's Christine Sloan.

There are only 10 Citibanks left in all of New Jersey. They aren't located in the suburbs, but in cities like Newark, meaning some customers have to travel up to 30 miles to get to a bank.

"I don't have the convenience I used to have for not having it local here. They're a great bank and I really like them. I'm just sad there's no branches here anymore," Thomas Murch said.

Customers have also complained that free Citibank ATMs inside 7-Eleven stores sometimes don't work, costing customers money, and that lines in open branches are too long.

"I happen to work in Newark so I went in to pay mortgage payment but also there are two tellers in there. I was in there for 20 to 25 minutes,' Frank Marasco said.

A Citibank spokesperson acknowledged problems with 7-Eleven ATMs and said they are operated by a third party.

"As customers increasingly prefer to bank through online and mobile channels, we have closed a number of branches," he said.

In the last year 20 of the 250 branches in New York, Connecticut, and New Jersey have closed.

The Garden State has been hit hard with 12 closures. Nationwide there have been 125.

Citibank isn't alone.

Bank of America shut down 500 branches nationwide, Chase got rid of 300, and economists say it's about profit lines.

"Their expenses are high and the government keeps fining them for every minor infraction they may have, so they need a way to cut costs," Scott Rothbort explained.

Bank of America, a profitable company, has more than 17-million customers using only mobile devices.

"Over the years, we've hired thousands of specialists, and invested in new technologies in the mobile and online space," a spokesperson said.

Chase, with 30-million online users, created more offices for non-teller staff.

"They are not making money on customer business, that's not where banks make their money," Rothbort said.

While many banks across the country are closing their branches, TD isn't following the trend.

"I feel comfortable talking to all the employees here and they help me," Will Stern said.

TD and other savings institutions have banked on the notion that all customers may not be interested in canceling their local branches.

Citibank said even though branches have been shut down they've opened new banks in target markets like San Francisco, New York, Los Angeles, and Miami. They said they have also renovated existing branches.

 

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