In Charlotte, N.C., residents like to joke that there’s a church or bank branch on virtually every street corner — which is fitting, since both are viewed as houses of worship in a city that until a recent merger boasted two of the nation’s five largest banks. Charlotte isn’t alone that regard, because during the housing boom of the past decade commercial banks everywhere threw up new branches as fast as they could. From 1990 to 2006, the number of bank branches in the U.S. roughly doubled, to more than 90,000 — or one for roughly every 2,200 adults in the country.
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But now that the housing bubble has burst, the banking industry is awash in too many branches — a problem it is looking to correct. On July 28, Bank of America confirmed reports that it will close an unspecified number of its 6,100 branches over the next several years, though industry experts say a 5 percent to 10 percent reduction wouldn’t be surprising. What’s fueling the cutbacks is not just the drop in mortgage-generated business, but new technologies — introduced by the banks — such as Internet bill-paying and mobile banking, as well as the proliferation of automated teller machines that do far more than their predecessors.
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Next up: small check-reading apps for smartphones, PCs, and others devices that allow consumers to deposit checks anywhere they have an Internet connection, as is already the case for customers of USAA Savings Bank, who can make deposits even by iPhone. These new technologies really level the playing field for credit unions and small banks, which need a way to compete with the expansive branch networks of the big banks, says Bob Meara, a senior analyst at Boston-based financial research and consulting firm Celent.
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Liam McGee, head of consumer and small-business banking at BofA,…