June 21, 2023

CFPB: Report Released on Banking Access and Consumer Finance in Southern States

Reports highlight gaps and identify opportunities to improve financial outcomes for many Southerners

The Consumer Financial Protection Bureau (CFPB) today issued two new reports on the financial opportunities and challenges facing Southern communities. The Southern U.S. is home to diverse populations, including many rural areas. Many areas of the Southern region are considered “banking deserts” because of the absence of sufficient bank or credit union options for local communities. The first report, “Consumer Finances in Rural Areas of the Southern Region,” compares consumer financial experiences and outcomes in rural communities in Southern states with other regions. A second report, “Banking and Credit Access in the Southern Region of the U.S.,” dives deeper into banking access and credit access, particularly mortgage lending, in both rural and non-rural areas in the region.

“The rural South faces distinct challenges when it comes to fair access to banking,” said CFPB Director Rohit Chopra. “Understanding regional differences across the country will help us determine where financial marketplaces can work better for all.”

The Southern region has distinct demographic characteristics that are important to understand. Of the nearly 48 million people in the Southern region, about 23% live in a rural county, compared to 14% nationwide. These states include nearly half (48%) of the nation’s persistent poverty counties (PPCs). More than a third of residents in the region are people of color, and 70% of the United States’ rural Black population resides in these states.

The level of access to banking services is one important factor to consider in evaluating the financial experiences of consumers in this region. The Southern region has fewer bank branches per person than other areas of the country (3.6 branches per 10,000 people, compared to 5 branches per 10,000 people nationally). A lack of local access to banking options can make it harder to get competitive interest rates on mortgages, credit cards, or small business loans. Even where there are banking options in rural areas, the report finds there may be limited access to banking services like ATMs and lending services even when branches are present.

Key findings in today’s reports include:

Rural Southerners continue to face significant financial challenges, as they are more likely to have lower incomes and higher rates of subprime or deep subprime credit scores than other regions in the country. However, the CFPB also found areas where there is evidence of progress:

Today’s reports build on CFPB’s prior work to explore regional trends in consumer finances, particularly in rural areas.

Read today’s report, Banking and Credit Access in the Southern Region of the U.S.

Read today’s report, Consumer Finances in the Rural Southern Region

The CFPB encourages consumers to use the Bureau’s Tell Your Story tool to share positive or negative experiences they have had with the financial products and services. Consumers can submit complaints about financial products and services by visiting the CFPB’s websiteor by calling (855) 411-CFPB (2372).

This post was originally published here.