Our state has an opportunity to confront a simple but important question: Who does our banking system truly serve?
Over the past two decades, consolidation and acquisitions have done more than close branches in certain neighborhoods. They have fundamentally changed how capital flows through communities like New Orleans and across Louisiana, making it harder for individuals and businesses to access the resources they need to thrive.
It was once understood that deposits taken in a place were largely loaned in that place. A local bank had both a familiar face and a defined geography, so money flowed in from the community as deposits and back out into it as loans. The bank earned a reasonable return for its stockholders on that circulation, and residents and businesses gained access to capital for commercial and personal growth. When local banks were sold to regional or national institutions, that geography expanded. Deposits still flow in, but people in New Orleans now compete for capital with borrowers in Nashville, New York and across the Gulf Coast. When an algorithm designed for the benefit of stockholders sees a higher return elsewhere, fewer deposits are recirculated locally…