The nation’s top federal agency charged with protecting consumers from financial crime has issued a report last week highlighting rural challenges with the current banking system.
The Consumer Financial Protection Bureau (CFPB) report, “Challenges in Rural Banking Access”, found that rural communities are more likely to lack access to physical bank branches, while rural populations are more likely to seek credit from non-banks and to combat the impacts of growing medical bills.
“A major finding is that rural communities are more likely to be in ‘banking deserts’ while rural populations are more reliant on physical bank branches than their urban and suburban counterparts,” said Shawn Sebastian, senior research fellow at CFPB and agency staff member. Rural initiative.
“So, on the one hand, rural people are more likely to need to use and depend on physical bank branches, and on the other hand, they are more likely to be further away from banks. It’s a clear lag, and in this large gap we see downstream effects.
These impacts lead to credit problems for rural populations, according to the CFPB. “Rural populations are the least likely to have a credit record maintained by one of the major national credit reporting agencies and therefore accessing the credit you need is more difficult,” said Sebastian. “Rural consumers have the lowest use of bank credit and the highest use of non-bank credit, including higher cost options like payday loans and pawnshops and other things of that nature.”
In addition to banking and credit issues, the CFPB under President Joe Biden is focused on resolvingIdiscriminatory and predatory agricultural credit practices, especially those targeting black farmers, which can result in the loss of land and wealth, as well as working with rural people to create more equitable and transparent lending practices in terms of relates to prefabricated housing.
The CFPB also offers services to rural organizations working on rural financial services, community development, business empowerment or local economic development. “If you are an organization that represents rural people and want to set up training or want to access our education services, or want to somehow arrange a meeting with us at CFPB, we would love to work with you. said Sebastian.
The report also found that despite rural credit and banking problems, rural people are much less likely to use CFPB consumer protection tools. The agency’s rural initiative was designed in part to help rural individuals and organizations learn about and use the resources available from the CFPB.
“One of our best resources is our complaints mechanism,” said Sebastian, which consumers can access on the CFPB complaint site. “If you have a problem with a payday loan or your bank, questionable overdraft charges, any type of consumer financial issue that affects you and the lender, you should use our complaint portal.”
The CFPB receives more than 10,000 complaints per week via this mechanism. Companies are legally required to respond to complaints, with an average response time of 15 days. “It’s a very important way for us at CFPB to track bad actors, a very tangible way to make sure they follow the law,” Sebastian said.
The CFPB is also responsible for helping small rural business owners combat unfair or predatory financial practices. “If you are a small business owner and are having trouble with banking or your credit, we really encourage you to share your story with us so that we can better understand the challenges rural small businesses face” , did he declare.
“We want to make sure small rural businesses can access fair credit, because we know that in rural areas a disproportionate number of people are employed by small businesses.”
Sharing stories with the CFPB is encouraged at the “Share your story” home page.
Organizations serving rural communities with suggestions or ideas on how best to address issues facing rural communities, or those requesting access to CFPB’s financial empowerment resources, should email to the agency at: [email protected].
You can file a complaint with the CFPB by clicking HERE.
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Report: Rural communities lack access to banking services, more likely to turn to predatory lenders
The nation’s top federal agency charged with protecting consumers from financial crime has issued a report last week highlighting the rural challenges of the current banking system.
The Consumer Financial Protection Bureau (CFPB) report, “Challenges in Rural Banking Access,” found that rural communities are more likely to lack access to physical bank branches, while rural populations are more likely to seek credit from non-banking institutions and combat the impacts of rising medical bills.
“A major finding is that rural communities are more likely to be in ‘banking deserts’ while rural populations are more reliant on physical bank branches than their urban and suburban counterparts,” s help Shawn Sebastian, CFPB Principal Investigator and Fellow agency staff Rural Initiative.
“So on the one hand rural people are more likely to need to use and depend on physical bank branches, and on the other hand are more likely to be further away from banks. obvious lag, and in that large gap we see downstream effects.”
These impacts lead to credit problems for rural populations, according to the CFPB. “Rural populations are the least likely to have a credit record maintained by one of the major national credit reporting agencies and therefore accessing the credit you need is more difficult,” said Sebastian. “Rural consumers use the least bank credit and the most non-bank credit use, including more expensive options like payday loans and pawnshops and other things of that nature.”
In addition to banking and credit issues, the CFPB under President Joe Biden is focused on combating discriminatory and predatory agricultural credit practices, especially those targeting black farmers, which can lead to loss of land and wealth. , as well as working with rural people to create more equitable and transparent lending practices for manufactured homes.
The CFPB also offers services to rural organizations working on rural financial services, community development, corporate accountability, or local economic development. “If you are an organization that represents rural people and want to set up training or want to access our education services, or want to somehow arrange a meeting with us at CFPB, we would love to work with you,” Sebastian said.
The report also found that despite rural credit and banking problems, rural populations are much less likely to use CFPB’s consumer protection tools. The agency’s rural initiative was designed in part to help rural individuals and organizations learn about and use the resources available from the CFPB.
“One of our best resources is our complaints mechanism,” said Sebastian, which consumers can access at CFPB complaint site. “If you have a problem with a payday loan or your bank, questionable overdraft charges, any type of consumer financial issue that affects you and the lender, you should use our complaint portal.”
The CFPB receives more than 10,000 complaints per week through this mechanism. Companies are legally required to respond to complaints, with an average response time of 15 days. “It’s a very important way for us at CFPB to track bad actors, a very tangible way to make sure they follow the law,” Sebastian said.
The CFPB is also responsible for helping small rural business owners fight against unfair or predatory financial practices. “If you are a small business owner and are having trouble with banking or your credit, we really encourage you to share your story with us so that we can better understand the challenges facing rural small businesses” , did he declare.
“We want to make sure small rural businesses can access fair credit, because we know that in rural areas a disproportionate number of people are employed by small businesses.”
Sharing stories with the CFPB is encouraged at the reception”Share your story” from the agency page.
Organizations serving rural communities with suggestions or ideas on how best to address issues facing rural communities, or those requesting access to CFPB’s financial empowerment resources, should email the agency at: [email protected].
You can file a complaint with the CFPB by clicking HERE.
This article first appeared on The Daily Yonder and is republished here under a Creative Commons license.
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