CTLawyer: For state regulated banks, which are the large percentage, that is entirely correct. Also some local zoning regs may effectively restrict locational decisions.
Banks with federal supervision may have other rules (e.g. see FDIC regs at 12 C.F.R. § 303.40 with respect to approvals for branch locations, relocations, seasonal openings etc). Also, in federal redlining and other discrimination lawsuits against banks/S&Ls subject to Federal supervision, the lack of sufficient locations in minority neighborhoods has been a frequent issue.
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