WASHINGTON–An initiative aimed at tackling the issues facing rural America has been launched by the Consumer Financial Protection Bureau (CFPB), with a particular focus on rural banking deserts, discriminatory and predatory agricultural credit and manufactured housing.
At this point the CFPB is just gathering information, and in announcing the effort provided few details around its overall objective and whether any rulemaking or regulation is planned.
“From Appalachia and the Deep South to rural Alaska, rural places have a wide range of diverse people, economies, and ways of life. Rural people are deeply committed to the places they live, but face real challenges in accessing reliable services and good jobs, keeping up with household expenses, maintaining farming, and finding affordable housing,” the CFPB stated in a blog post.
The Bureau “has a responsibility to pay attention to the particular challenges rural communities face as they work to build and maintain their financial resiliency,” the post added.
According to the blog post, CFPB Director Rohit Chopra invited more than 50 people from organizations representing rural people across the country to tell their stories and share their concerns.
Key Takeaways
Among the takeaways from the concerns shared, according to the Bureau:
- Banking deserts. The CFPB cited “stark” declines in the number of rural-area financial institutions that have had a particularly negative impact on rural communities. The vacuum has been filled by non-bank alternatives that charge higher fees and interest rates, which results in more money leaving rural communities, the Bureau said. Moreover, race is also a factor in rural areas, as counties most deeply affected by bank closures are those with a greater proportion of African-American residents, relative to other rural counties.
- Discriminatory, predatory ag credit: According to the CFPB, the decline in the number Black farmers, and the land they own, is the result of “long history” of discrimination by credit providers. The CFPB said it also heard from farmers that their obligations to banks can trap them in exploitative arrangements with dominant agriculture firms.
- Manufactured housing. According to the Bureau analysis, people depend on manufactured housing in rural areas because quality, affordable housing is difficult to find in rural areas and there are too few rental properties available, particularly for older persons on fixed incomes. Residents typically own the buildings, but just as typically rent the land on which the building is placed. “Manufactured housing residents told us that manufactured home parks are increasingly being bought up by private equity firms that have, in some cases, dramatically increased rents and tacked on fees in short periods of time,” the CFPB reported on its blog. “According to the residents we heard from, some feel trapped in the arrangement because they’re still paying off their home-only loan and don’t want to lose the equity they’ve invested.”
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