Meredith Whitney, who rose to fame for her bearish calls on banks ahead of the financial crisis, now sees 5,000 bank branches closing by 2012 because bank profits are in "structural decline." This, she warns, is part of the "inevitable de-banking of the U.S. financial system," Fortune Magazine reports.

In a report released Monday afternoon, Whitney explains how financial reforms, such as this summer's Dodd-Frank Act, will cause profits at banks to decline. As part of their efforts to increase profits, the financial institutions will close 5% of their bank offices.

For example, regulators' decision to crack down on such practices as the $35 overdraft fees will result in higher prices for other services, further increasing the number of customers who cannot afford banking services.

"The most regrettable unintended consequence of some of the quickly written regulatory reform, we believe, will be the inevitable 'de-banking' of the U.S. financial system," she writes.

In January 2009, a Federal Deposit Insurance Corp. survey found that 30 million U.S. households were "unbanked" or "underbanked" -- that is, they did not have accounts at banks or other mainstream financial institutions, despite FDIC efforts to encourage banks to expand their low-cost offerings.

Whitney expects the ranks of the "unbanked" will rise to 41 million households in 2015, as institutions reconsider the costs and benefits of all manner of products.

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who cares? I dont, I have no money to bank anyways,country has no good jobs,no investing in the U.S. anymore.everybody shops at the Walmart, home of low wages and made in china goods.people basically survive they no longer live anymore....future is dire!

November 30 2010 at 10:57 AM Report abuse rate up rate down Reply

8 big banks control 75% of bank deposits across America. Remember "It's a Wonderful Life"? Get your money out of the big banks and into a local small bank.

November 24 2010 at 1:09 AM Report abuse +1 rate up rate down Reply

''the financial system will close 5 per cent of it's bank offices''----oh,the horror of it all. how will we ever that all you got whitney BORING

November 23 2010 at 3:22 PM Report abuse rate up rate down Reply

If the interest rates paid on deposits remain pathetically low, there is no incentive to open accounts at banks. The banks demand everything and give nothing. They have savings account and others that demand the customer open a checking account and demand minimum deposits and balances or they start eating up your account with maintenance fees. They have so few ethical and knowledgeable employees with brains that mistakes are constantly dogging their customers. The execs don't care, they're the ones who are getting the gravy on the backs of their serf labor who I've head decribed as "workhorses" and warm bodies. The banks are wasting our money by keeping too many branches open into which few customers visit. Why should they when there are only 3-4 employees who know nothing as opposed to the 15 or twenty they used to have. cruel and cheap but not "de-banking".

November 23 2010 at 3:11 PM Report abuse +1 rate up rate down Reply

Who trusts them anymore

November 23 2010 at 2:11 PM Report abuse +2 rate up rate down Reply