Two recently released Consumer Financial Protection Bureau (CFPB) reports examine financial opportunities and challenges facing Southern communities regarding banking access and consumer finance.
Consumer Finances in Rural Areas of the Southern Region offers a comparison of consumer financial experiences and outcomes in rural communities in Southern states with other regions while Banking and Credit Access in the Southern Region of the United States offers a deeper dive into banking access and credit access in rural and non-rural areas in the region.
“The rural South faces distinct challenges when it comes to fair access to banking,” CFPB Director Rohit Chopra said. “Understanding regional differences across the country will help us determine where financial marketplaces can work better for all.”
Findings indicate Southern consumers often have more difficulties accessing credit and face higher interest rates; initial analyses determined credit scores alone do not explain lower levels of lending; unbanked rates in the region remain high despite gains; and consumers face challenges in auto lending.
The CFPB noted there has been progress with regard to improvements in the percentage of people with bank accounts, both overall and among specific communities; there are some mortgage lenders possessing strong records of reaching historically underserved markets within the region that include rural communities, low-income borrowers and borrowers of color; and residents of Southern states with higher rates of medical debt are more likely to benefit from the recent changes to how medical debt collections will be reported on consumers’ credit reports.