A CDFI in Southeast Louisiana providing exceptional financial products to areas that need it most
We’ve talked a lot about poverty rates across the country, and how the highest poverty rates in the United State are in the southern, rural states. However, one thing we’ve not talked about before is what high rates of concentrated poverty look like. While poverty is defined as “lacking the money or material possessions to live securely,” many people have the misconception that poverty in the U.S. is easier than living in poverty in a country which has a much higher rate of poverty. Although the extremely poor in our country may have access to government benefits and protections not provided by poorer federal governments, the cost of living is much higher, and especially in the states where there are extremely high rates of poverty, there are clusters of rural towns where the majority of people live under the poverty line.
Although this is less quantifiable, another hard thing about living under the poverty line in the US compared to other places is the presumption that anyone poor in this country is just lazy, because anyone is supposed to be able to find opportunity in our “model” economy. However, when you do live in these pockets of extreme poverty--which exist not only in the rural south but also in many rural areas nationwide, in inner-city neighborhoods, and American Indian reservations--it is extremely difficult to escape from the cycle of poverty. This is why banks in these neighborhoods, specifically investing in families living under the poverty line, are so important; housing lending allows families trapped in generational poverty to build equity through their homes.
Cottonport Bank in Louisiana is an example of a bank serving populations that would otherwise have little or no access to affordable housing loans. Although they didn’t set out to be a CDFI when forming in 1902, by retaining a commitment to serving the financial needs of their customers, they have brought capital to an area that needs it more than most. While their mission hasn’t changed, they’ve grown significantly throughout their century of being open in order to provide financial services to many small towns in between Alexandria and Baton Rouge.
The bank does have a couple of locations in the greater Baton Rouge area, and not all of their locations are in low-income census tracts. However, Cottonport, LA, the hometown and headquarters of Cottonport Bank, is reflective of the many of the towns they work in-- rural, small towns with poverty rates at least twice the national average. Although some of the smaller towns Cottonport is located in have lower rates of poverty than the rest of the state, they also have a couple of locations in a town so small it’s unincorporated and a town with a single Wikipedia note, saying they’re named for the guy who got the town a post office. It’s challenging for banking institutions to stay open in such sparsely populated areas, but because there are so few banking options, it’s probable they have plenty of customers coming from nearby small towns who need financial services.
Cottonport not only works in areas where they’re badly needed, they do so with a solid lending portfolio that reflects their commitment to not necessarily be a community development bank, but to be a dependable bank which understands their community’s financial needs. They’re traditional in that they prioritize housing, making up about 28% of their total lending. Of this housing lending, 65% goes to low- and moderate-income housing. They do a significant amount of both small business and small farm lending, with 13.8% of bank assets going to small businesses and 2.37% going to small farms.
The main thing to love about this Better Banking Option is that four of their 12 locations are located in towns or areas without any other banking institutions. We sometimes take for granted the wealth of financial services at our fingertips in metropolitan areas. Disinvested communities need decent community banks like Cottonport making loans and providing financial services, so that the people of these towns can start to build wealth in their homes and small businesses and bring capital back into the neighborhood.
Cottonport Bank offers both online and mobile banking options, which means anyone interested in banking here can do so with the reassurance that their deposits are being leveraged in communities in southeast Louisiana to bring capital and financial services to families that would otherwise go without. Check out their website and move your money to a Better Banking Option today!