CFPB unveils ‘rural’ application designation process
March 2, 2016 -- Institutions that wish to be designated as “rural” may submit applications to the Consumer Financial Protection Bureau (CFPB) beginning March 31, the agency announced today.
The application process, CFPB stated in a release, is to allow the bureau to consider whether there are smaller institutions that merit a designation as “rural” lenders, but do not qualify under current guidelines. “The Bureau is taking quick action to fulfill our responsibility to Congress and implement the law,” said CFPB Director Richard Cordray in a release.
In December, Congress passed the Helping Expand Lending Practices in Rural Communities (HELP) Act, which (among other things) directs CFPB to establish an application process under which a person who “lives or does business in a state may apply to have an area in the state identified as a rural area if it has not yet been so designated by the CFPB for purposes of federal consumer financial law.”
In its release, CFPB stated that, to request a rural designation, applicants need to identify the area and the state in which it is located. As set out in the application process, institutions must then provide information that will allow the CFPB to evaluate the application under the parameters of the new law, CFPB stated.
CFPB added that the application process will be open through Dec. 4, 2017. However, any application submitted after April 8, 2017, will be considered only if the Bureau “determines the designation decision process for that application can be completed by the sunset date of Dec. 4, 2017, based on the time remaining, the complexity of the application, and any other relevant factors.”
CFPB also noted that the HELP Act amended the Truth in Lending Act, authorizing the bureau to expand eligibility among small rural creditors to originate balloon-payment qualified mortgages and for exemptions from the required escrow account for higher-priced mortgage loans. “The CFPB will soon issue another notice concerning those amendments,” the agency added.