The Washington Post has a very good story on the fall of Charlotte’s once-mighty banking industry and the impact on the city.
Charlotte’s the epicenter for this kind of thing, what with Wachovia’s exit and Bank of America’s new status as ward of the state, but the Post is smart to point out the damage the financial industry’s troubles have caused areas like Seattle, Wilmington, and Orange County, California.
Particularly interesting is this:
“I think there’s a new humility to Charlotte,” said Bob Morgan, president of the city’s Chamber of Commerce. “We didn’t worry too much about the things being done in Dallas, Atlanta, San Francisco,” he said, when banks in those cities were swallowed by Charlotte’s giants. “We are now living it ourselves.”
Morgan is talking about how Charlotte’s fortunes improved as its banks took over banks from those cities in what’s something like a zero-sum game (or negative even, with layoffs).
It wasn’t always thus, the Post’s Binyamin Appelbaum tells us:
Charlotte rose as a financial center thanks to deregulation. Until the 1980s, long-standing rules limited the ability of banks to operate in multiple states, and the largest banks were located in the largest cities. But as the government lifted those barriers, banks in smaller cities saw a chance to compete by clumping together.
Deregulation allowed banks to avoid state caps on credit card interest rates by moving to states with lenient laws, such as Delaware and South Dakota. It also spurred mortgage lending by institutions other than banks.
But the once-ascendant city is getting hammered. Total pay is down a whopping 16 percent, philanthropy is down big. But most heartbreaking of all: Private-jet landings and takeoffs are off near 40 percent!
This piece is deeply reported. That’s in part because Appelbaum knows the town. He worked at the Charlotte Observer, where he was lead reporter on one of the best pieces of journalism of the last few years, the four-part “Sold a Nightmare” series on Beazer Homes.
There’s good information on bankers’ proportion of the workforce and their proportion of total pay and how the impact on the lost jobs has trickled down to the ancillary small businesses that served all those workers downtown. This in particular is great color:
One store is wholly devoted to objects emblazoned with the Bank of America logo, from T-shirts and golf balls to document shredders.
Great color, and great work by the Post.