Rural communities struggle to access physical bank branches and often resort to predatory lenders and other nonbank entities for credit, according to a report issued by the Consumer Financial Protection Bureau (CFPB).
The Daily Yonder reports that the federal agency’s findings underscore the fact that rural regions are often banking deserts, which makes bank credit less accessible to people who require loans. Rural consumers are thus less likely to have credit records maintained by credit reporting agencies and may turn to costlier alternatives such as payday loans and pawn shops.
Apart from dealing with matters of credit and banks, the CFPB has taken steps to stop predatory agricultural credit practices that result in the dispossession of rural communities and especially Black farmers. Similar efforts have been launched to make lending practices fairer and less opaque relating to the manufactured housing sector.
The CFPB offers a range of services for organizations working on rural financial services, community development and corporate accountability. In addition, the agency has a complaint portal on its website where consumers can report problems with payday loans and banks, suspicious overdraft fees or other financial problems. However, the report found rural people to be far less likely to use these tools than their urban and suburban counterparts. Rural borrowers, small businesses and consumers are strongly encouraged to take full advantage of the CFPB’s tools and services.
To read the full story, go here: https://dailyyonder.com/report-rural-communities-lack-access-to-banking-more-likely-to-turn-to-predatory-lenders/2022/05/02/