CFPB report on rural challenges doesn’t account for reg burden

April 20, 2022

The Consumer Financial Protection Bureau issued a report on the challenges faced by Americans in rural communities.

Report Details: The report says many in rural communities lack access to physical bank branches, are more likely to seek credit from nonbanks, and are heavily affected by medical bills. The CFPB said it will expand its efforts to address these and other challenges facing rural America.

ICBA Letter: The report follows a recent ICBA letter to the bureau noting that regulatory compliance burdens are driving consolidation while exacerbating the decline of rural businesses and their ability to access low-cost credit.

Community Bank Impact: In its letter, ICBA said community banks proportionally maintain more branches than larger institutions and are robust lenders to minority and low-to-moderate-income borrowers.

Recommendations: ICBA also encouraged policymakers to:

  • Support the ECORA Act, which would exempt from taxation interest income on farm real estate and rural mortgage loans.

  • Enhance the farm bill’s rural safety net, particularly through guaranteed loan programs.

  • Examine the tax and regulatory advantages of credit unions and Farm Credit System entities as well as credit union acquisitions of community banks.