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Banking closures affect infrastructure projects in rural and urban communities across Mississippi. Photo courtesy

Banking Deserts Hinder Educational, Economic Growth in Black Mississippi Communities

Itta Bena, Miss., is a “town with no bank,” Janell Ross reported for an NBC News piece about “banking deserts.” As a professional chef and community organizer, I have long known about “food deserts,” but her research opened my eyes to a pattern of systemic racism that undergirds predatory banking and how it affects education, agriculture, transportation, the environment, and commerce in rural and urban ADOS (American Descendants of Slavery) communities. 

Low-income residents and the elderly community are especially vulnerable to banking deserts, which are defined as areas with inadequate financial and banking services. They are usually in less-populated rural spaces, which means large institutions have fewer profit opportunities. 

A popular study by researchers Dan Morgan, Maxim Pinkovskiy and Brian Yang defined banking deserts as “census tracts in which there are no branches within a 10-mile radius from the tracts’ centers.” 

This condition is obvious on the Gulf Coast where vacant properties are common in underprivileged urban communities that have not received adequate funding to purchase vacant tracts of land since the devastation of Hurricane Katrina.

Temporarily Closed window sign
Hancock Whitney Bank on Pass Road in Biloxi, Miss. has recently closed its Popps Ferry branch due to a lack of overhead as a result of COVID-19. Photo by Leo Carney

For example, the City of Biloxi, Miss., is still in an ongoing lawsuit against FEMA for its withdrawal of over $15.5 million in proposed funding for disaster-relief efforts to improve the infrastructure in East Biloxi. There was wide bipartisan congressional support for a repeal of FEMA’s decision. After members of both houses in Congress sent a letter to Acting Deputy Administrator Daniel Kaniewski, the City was granted a reinstatement of $8.8 million for infrastructure projects. Meanwhile, East Biloxi still does not have one major banking branch. 

The population density of these low-income urban areas are comparable to the rural populations in which banking deserts are prevalent throughout Mississippi. The closing of brick-and-mortar banking branches has a negative impact on the amount of investment coming into ADOS communities. There were 4,821 bank branches in the United States that closed between 2009 and 2014 alone. 

Using 2003 data, Federal Reserve Board researchers found that, nationwide, the median distance between a small firm and its main bank was just five miles. While traveling 10 miles to deposit a check or withdraw cash might seem merely inconvenient, evidence suggests that access to bank credit, particularly for small businesses, declines as the distance between the bank and borrower grows. 

In addition, a 2005 Journal of Finance study found that small business loan rates increased with the distance between firm and bank. As with real estate, location matters for customers’ access to and use of banking services.

Mississippi state capitol building
State legislators have sponsored predatory lending legislation that has disenfranchised rural, and urban ADOS communities in the Deep South. Photo by Kristin Brenemen

Mississippi Lawmakers Pass Predatory Lending Bill

What struck me the most was how our state legislators have downright fought for and sponsored legislation that would allow an unincorporated community like Itta Bena, Miss., or any other marginalized community, whether rural or urban, to be disenfranchised this way. 

“In state after state, high-cost lenders sought to weaken state laws that protect consumers from predatory installment loans by non-banks,” the National Consumer Law Center warned., “… On the other hand, Mississippi legislators enacted the misleadingly named Credit Availability Act that allows an APR of 305% for a $500 loan repayable over six months.”

Mississippi routinely leads the FDIC survey of unbanked and underbanked households with 15.1% of its households in that category in the latest survey, McClatchy reported in 2018.

The Mississippi Credit Availability Act passed in 2018. The duplicitous nature of the relationship between policy makers and Wall Street opens the door to predatory lenders who prey on disenfranchised residents whose only access to banking is check cashing centers, payday-loan stores and ATMs. Major banking institutions like Wells Fargo and TD Bank have agreed to pay back hundreds of millions of dollars in restitution for illegal practices that targeted ADOS and other marginalized consumers. 

Part of our ADOS Agenda for Black America is to audit our banking institutions and demand reparations for our communities. Regarding the current banking system, the agenda states: 

“Audit the banks to see if there are patterns of racial discrimination in lending, and require these banks to extend loans to ADOS businesses. These banks received a bailout from taxpayers and owe a debt to all taxpayers, regardless of race.” 

The impact of banking deserts is not exclusive to our rural communities. Predatory lending has played a huge role in disenfranchising our urban communities in the same way.

A recent FDIC National Survey of Unbanked and Underbanked Households revealed that, out of all of those who used prepaid credit cards, 53.1% said that they did not have enough money to keep a bank account open. Many of the unbanked are forced into fringe borrowing from secondary and other alternative sources of banking. This has a direct connection to health and environmental inequalities and has residual impacts that affect the financial support for education in these communities. 

Fringe banks are frequently located in poor neighborhoods with few mainstream banks and large ADOS populations, thereby exploiting financial distress for profit. Jerzy Eisenberg-Guyot provides a context into the health risks in his research explaining the “Determinants of health” associated with fringe banking and being unbanked. The underlying stress of these living conditions also affects educators in our school systems. 

The Impacts of Being Unbanked 

Shirley McNabb, Shira Stallworth and Leo Carney standing together
Educator Shirley McNabb (left), Moss Point Mayoral Candidate Shira Stallworth (middle) and Leo Carney (right) of ADOS MS at the 4th Annual Educational Forum in Moss Point, Miss. Photo by Leo Carney

After hearing the testimony of educators like Shirley McNabb of California (by way of the Gulf Coast), I now realize that the same  systemic racism that is prevalent in banking and loan access via redlining, predatory lending and disproportionate fees is just as commonplace in our educational system. Her testimony highlights the contrast between white communities, who have access to the necessary resources within their county government to support educational programs for their children, and the marginalized school districts in predominantly ADOS and communities of color. 

Moss Point Public School District has unspeakable racial inequities that are not exclusive to their school district. When I delved deeper into the data, I found that the demographic dataset of the city has a community that is in economic collapse. Moss Point has a poverty level of 22%, while the entire state of Mississippi has a poverty level of 19.6%. Plus, 22.2% of Moss Point residents had an income below the poverty level in 2019, which was 11.8% greater than the state poverty level. 

Mississippi is in the Atlanta Federal Reserve’s 6th District. The southeast region has seen an unprecedented amount of bank closures from 2012 to 2017. Across the district, 46% of rural counties lost full-service brick-and-mortar and retail bank branches from 2012 to 2017, compared with 41%of rural counties across the United States as a whole, the AFR calculation showed.

Hope Credit Union CEO Bill Bynum is based in Jackson, Miss. Photo Courtesy Hope Credit Union

This speaks to the inequities that educators and community leaders like Shirley McNabb and Shira Stallworth were discussing at the Educational Forum in Moss Point. One of the more promising outcomes of the AFR report has been a partnership between Regions Bank and Hope Credit Union. CEO Bill Bynum and others have thought of creative problem-solving mechanisms to help solve some of the banking closures in these communities. 

“Hope is the only depository institution in several communities, including Itta Bena, a majority Black Mississippi Delta town, with a poverty rate of 42% and median household income is $20,417,” the Associated Press’ Leah Willingham reported. “Because many of its customers are low-income, Hope cannot garner the capital of larger, multinational banks to invest in its communities.”

Netflix announced a $10-million investment in the Mississippi-based Hope Credit Union to build economic opportunities in Black communities across the Deep South. These are the types of investments in our rural and urban communities that our elected officials should be lobbying for in Congress. Mehrsa Baradaran’s book, “The Color of Money” describes the disparities that Black banking institutions like Hope have historically been up against in America. 

Our goal as ADOS activists in Mississippi is to continue to influence first-time lawmakers to adopt transformative legislation that will impact the lives of their constituents so that they can finally experience fidelity. Reparative-justice legislation will lead to a path toward reparations that is specific to these ADOS communities. 

This MFP Voices essay does not necessarily represent the views of the Mississippi Free Press, its staff or board members. To submit an essay for the MFP Voices section, send up to 1,200 words and factcheck information to We welcome a wide variety of viewpoints. 

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