For many years community activists have been calling downtown Allentown a banking desert, but that is rapidly changing.
With a combination of economic revitalization in the city center and a push through the Bank On Allentown program to bring financial access and literacy to the city, financial institutions are returning to the downtown.
While ESSA Bank & Trust has had a branch in downtown Allentown since 2018, more recently two of the Lehigh Valley’s credit unions have opened branches in the downtown.
People First Federal Credit Union opened its new headquarters and solutions center at 26 N. 6th St. in May, joining First Commonwealth Federal Credit Union, which opened a location at 840 W. Hamilton St. In February of last year.
“Allentown had been neglected for so long,” said Howard Meller, president of People First.
He said that he has been with the credit union for two years and opening a branch in the downtown became one of his top priorities when he took over his post.
“I thought it was really important to be downtown,” he said.
People First had been headquartered on the city’s south side. The credit union was founded as the credit union for Mack Trucks and the location was close to the manufacturing facilities there. But the credit union expanded its services to all community members many years ago.
He said relocating to the downtown just made sense because it gave a greater number of people access to the credit union’s services with the large number of people living and working downtown.
Donna LoStocco, president and CEO of First Commonwealth, said her credit union was also motivated by the growing number of residents in the downtown, who she said needed easier access to banking services.
“We have our largest branch at 450 Union Blvd. It was extremely busy all the time, so we were looking for a second location to ease that,” she said.
With all of the economic development activity and population growth in the downtown, the Hamilton Street spot seemed ideal.
But, like People First, her credit union’s involvement in the Bank On program motivated the move.
She said part of the mission of a credit union is to serve the needs of the members, and residents of the downtown have a significant need for banking services.
LoStocco noted that nationally 5.4% of U.S. residents are currently unbanked, meaning they have no savings or checking accounts at all.
In Allentown, 15.9% of the population is unbanked.
She said studies have shown that it can cost families up to $40,000 over a lifetime because of the excessive fees charged by many alternative financial service companies like check cashers or payday lenders.
With these same people also being low income, LoStocco said the credit unions are committed to helping them save money and improve their finances and credit through outreach and education.
She gave the example of one client, who moved to Allentown from another country and had no credit whatsoever.
After working with First Commonwealth’s financial advisors, that individual now has a credit score of 750.
Meller said to help those residents who may be new to the country, People First has bilingual staff at the downtown location, so they can better help those who don’t speak English as their first language.
Other banking institutions are also keeping their eye on Allentown.
Bucks County based Penn Community Bank is opening its first branch and business center in the Lehigh Valley market in Allentown later this year.
While the branch will be located outside of the downtown at 3090 Tilghman Street, president and CEO Jeane Vidoni said the move is part of the bank’s interest in the downtown.
“There is a concerted effort in serving all levels of socio-economic communities,” Vidoni said. “All banks are looking to serve these markets in a meaningful way.”
She said that while many banks are eliminating branches, mostly because of redundancy from mergers, the Lehigh Valley is a good region for her bank to grow.
“The Lehigh Valley represents a market that still appreciates local banking,” she said, and she believes Allentown is a great place to start.