LANSING, Mich. (Michigan News Source) – As consumers shift to online banking, more and more national banks are closing across the country and recent announcements have included the closing of more banks in Michigan.

Fifth Third Bank has announced that they are closing 19 branches with four of them closing in Michigan. Fifth Third closed 41 branches last year.

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Huntington Bank has also announced they are closing more than two dozen branches in early 2024 across the Midwest including nine in Michigan. The banks affected are in Battle Creek, Belmont, Cass City, Detroit, Clarkston, Lexington, Pinconning, Saginaw and Midland. Huntington told the Daily Mail in a statement, “Huntington regularly reviews our distribution network and makes adjustments and improvements to ensure our mix of branches, ATMs, and online and mobile banking continue to meet our customers’ evolving needs.”

Citizens Bank has been closing down banks across the country as well and has already closed two in Michigan in September in Rochester and Warren.

Crain’s Grand Rapids Business reports that Michigan ranks 4th nationally in the loss of bank branches according to a new study from LendingTree. The study reveals that banks in Michigan closed 345 branch offices from 2020 to 2023 after digital banking soared to new heights during the pandemic. The report points out that Michigan had more full-service offices close during that three-year period than most other states, reducing the number of bank branches in Michigan from 2,289 to 1,944 offices, a reduction of 15.1%.

When looking at 190 metro areas in the United States, Flint ranked second nationally with the closing of 21.7% of their full-service and retail bank offices and Lansing was sixth at 19.6%.

Another reason cited for the decline in the number of Michigan bank branches is the 2021 merger between Huntington Bancshares Inc. and the former TCF Financial Corp. which led to 197 offices being closed, 98 of them located inside of Meijer stores across the state.

According to the LendingTree analysis, nationwide, banks closed a little more than 6,400 full-service and retail branches from June 2020 to June 2023, a reduction of 7.1% of the offices that were open.

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Many in the industry say that these closures are not a result of financial stress or any problems associated with the failures of the banks like Silicon Valley Bank that happened in the spring. Instead, the changes are the adjustment of banking trends where customers prefer mobile and digital banking and the branches don’t have enough foot traffic to keep them open.

According to Crain’s, that trend has been happening for two decades with customers, especially the young generations, preferring to do their banking online and from the apps on their phones.

Ken Tumin, a senior banking industry analyst for LendingTree said, “Definitely, the digital age is a big contributor and a long-term trend, and the pandemic accelerated that trend toward digital banking. The digital trend is continuing and it’s going to continue.”

The pandemic forced many people to do their banking online and after getting used to it, many didn’t go back to their on-site banks. That means that people must be getting their cash by other means including ATMs (automated teller machines) or businesses that give them cash back – or they’re just not using cash at all.

According to a Gallup poll done in August of last year, that appears to be the case with 60% of people saying that they make just a few or no purchases with cash, which is double the number from just five years ago. Only 13% say they make “all” or most purchases with cash, with 22% of lower-income Americans using cash for all or most of their purchases.

There’s also a difference in the age groups as well with only 11% of young adults 18- to 29-year-olds who say they use cash for all or most purchases today. Most adults also think that we will be a cashless society soon (64%). There’s also a partisan difference concerning the shift to a cashless society with 60% of Republicans saying they would be upset about it and only 28% of Democrats who would be.

 Even though ATMs are the main place to get cash from and 40% of people in the U.S. use an ATM 8 to 10 times per month. according to a report published in 2021 EnterpriseApsToday, their numbers are dropping off. A June report by PaymentsDive shows that the amount of ATMs have gone down for the third straight year. They report that the number of ATMs in the U.S. declined to 451,500 last year, a 4% drop from a high of 470,000 in 2019, according to data emailed to Payments Dive from research firm Euromonitor International.

Cash doesn’t appear to be king anymore. During the pandemic, not only were people forced to stay home, they were also fearful of transmitting the virus through handing out bills and coins. Whether that was a realistic means of the virus spreading or not was never proven one way or the other but it was a rumor and a worry that stuck with many people.

Add to that the businesses and events who don’t want to accept cash anymore including the MHSAA (Michigan High School Athletic Association) football tournament in Michigan who won’t take cash for the playoff games in the state.

And although Congress re-introduced introduced bipartisan legislation (the Payment Choice Act – HR 4128) this year to ban businesses from rejecting cash for in-person retail purchases, it hasn’t gone anywhere. Rep. Donald M. Payne Jr. (D-NJ), the sponsor of the House bill, says, “Every American should have the right to pay in cash. There are too many stores and businesses that want to reject it in favor of digital payments. But cash is the only option available for millions of Americans to pay for food, housing and other essentials. In addition, I am concerned about the safety and privacy of the data that companies are collecting from consumers during routine purchases.  Besides, American cash is a lesson in American history. A few years ago, we fought over who should be represented on our currency. Now, companies want to eliminate currency completely.”

On a side note, U.S. Senator Bob Menendez (D-NJ) who was found with $480,000 of cash hidden in envelopes and in his clothing, and has been indicted on bribery charges, is one of the sponsors of the payment Choice Act in the Senate which is a companion bill to the one in the House.

As more and more Americans shift to online banking, it’ll be much easier for the federal government to transfer us to a digital currency sometime in the future, however it looks like it might also make it easier for law enforcement to track criminal behavior, whether done by politicians or others.