CFPB Releases Report on Financial Challenges Facing Rural Communities
Earlier this month, the Consumer Financial Protection Bureau (CFPB) released a report on financial challenges faced by Americans living in rural communities, finding that many of these communities have limited access to physical bank branches, are more likely to get credit from nonbanks, and are highly affected by medical bills.
“For decades, many government agencies have turned a blind eye to pressing problems facing families, farmers, and businesses in rural communities,” said Rohit Chopra, CFPB Director. “The CFPB will be focusing on ways to ensure that rural communities can better access relationship banking services and achieve their economic potential.”
Americans in rural communities tend to have lower incomes and higher poverty rates, and are 10 times more likely than urban communities to be located in banking deserts. In 2019, roughly 90 percent of rural households visited a bank branch, though most of them are not likely to live within 10 miles of a physical bank branch.
Rural Americans are also less likely to have a credit history, which frequently leads to them using alternative financial services to gain access to credit. Additionally, unpaid medical bills are more common in rural communities, which can unfairly affect credit reports and limit access to credit, employment, and housing.
The CFPB recently launched a Rural Initiative which will conduct research to understand the needs of rural communities and develop ways for rural Americans to file complaints. The Bureau will also hold roundtables with rural stakeholders virtually and in-person in areas like Appalachia, the Deep South, Indian Country, and the Rio Grande Valley.
Additionally, the CFPB has begun working with federal agencies like the U.S. Departments of Agriculture, Housing and Urban Development, and Treasury to ensure that rural Americans have necessary resources and are protected from lawbreakers in the financial sector.