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Racked Mailbag: Should the City Limit Bank Growth?

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Once in a while, we pull letters from the Racked Inbox and post them for your enjoyment and/or enlightenment. Want to contribute? We're listening. Anonymity always assured.

It's no secret that banks have eclipsed Duane Reade and perhaps even Starbucks with their unchecked growth. Landlords see them as safe bets, quiet tenants (unlike bars) that are willing to pay high rents. Some areas of the city, like the stretch of Eighth Avenue in Chelsea between 14th and 20th Street, are clearly overbanked, and other nabes aren't too far behind. What will stop the madness? One reader thinks that the city should step in:

What would it take to pass an ordinance limiting the number of banks that can pop up in the city? I was thinking something similar to the sex-shop law from the late '90s. Only, instead of forbidding banks within 500 feet of residences, they would be forbidden within 500 feet of each other (I'm willing to lengthen the distance, if possible).

Porn shops at least serve the community in many ways. They temper rents, have dance-related jobs to those who couldn't make it into the American Ballet Theatre, and offer a safe space for people who would otherwise rub one out on the subway. Banks provide nothing but crumpled receipt litter and bright lighting that makes everyone look pale and tired. The only exception I can think of is the Washington Mutual ATM branch on Bleecker street that also seems to have become a urinal for local indigents and drunks.
Along with the 500-foot rule, any bank in the New York City area would be forbidden from charging inter-institution transaction fees. This would make any branch of any brand bank convenient for anyone. Customers would no longer worry about how the Chaseglow hadn't yet metastasized into their neighborhood. Generally, once enacted, whichever bank was in the area first could claim its intersection, and the banks that later arrived on the other three corners would have to close. Or the more culturally significant bank would win out—in Brooklyn Heights, for example, there's a lovely old building housing a Chase, which would win over the blandly modern Citibank branch right next door to it.
As a way around the 500-foot distance rule, banks could also sponsor single ATM stalls outside stores and restaurants. These ATMs would be fee-free as well, and more trustworthy than the nameless dial-up modems currently in front of most delis. The ATMs couldn't take up more than a small portion of the storefront, and there couldn't be like twenty per block. The bank that runs the ATM would pay a meaningful percentage of the rent for the storefront, which would encourage the growth of businesses that can't yet fully support themselves. Also, any new development couldn't give space on its ground floor immediately to a bank unless half of its units were middle-income, or the majority of the ground floor were offered to local businesses.
You're invited, as always, to leave your thoughts in the comments.