CFPB report, initiative highlight financial challenges facing rural communities

Many rural American communities lack access to physical bank branches, are more likely to seek credit from nonbanks and are heavily affected by medical bills, a new report from the CFPB finds.

Rural, or “non-metro,” counties are home to 46 million people, which is 14% of the U.S. population, while people living in rural counties tend to have lower income and higher rates of poverty, according to the report, “Data Spotlight: Challenges in Rural Banking Access.” Further, the overwhelming majority of persistent poverty counties across the U.S. are located in rural areas.

Local financial institutions, such as community banks and credit unions, often offer products and services that fit the local economic terrain, however, rural communities are experiencing a fast-paced exodus of in-person banking services, with rural communities 10 times more likely than urban communities to be located in banking deserts, the report states. In addition, the Federal Reserve has identified more than 2,100 existing and potential banking deserts across the country with more than 1,500 located in rural areas.

“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.”

Rural initiative
The bureau also laid out plans to expand efforts to address challenges facing the people and families of rural America with a new rural initiative. The initiative will be focused on authorities and resources that address the particular needs of rural communities, and the CFPB has begun making a concerted effort to work with government and civil society stakeholders to establish lines of communication and gain more visibility into the most pressing consumer finance issues in rural areas, according to the bureau.

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