Source: U.S. Census Bureau. (Note: In this graph, a household is classified as urban if the household resides in a principal city of a metropolitan area, suburban if the household resides in a metropolitan area but not in a principal city, and rural if the household does not reside in a metropolitan area. This figure does not display nonbank credit use for the 14.2 percent of households where the Census Bureau suppressed specific urban, suburban, or rural status to maintain confidentiality.)

The nation’s leading federal agency charged with protecting consumers from financial crimes issued a report last week highlighting rural challenges with the current banking system. 

The Consumer Financial Protection Bureau’s (CFPB) report, “Challenges in Rural Banking Access,” found that rural communities are more likely to lack access to physical bank branches, while rural people are more likely to seek credit from nonbanks and struggle with impacts of growing medical bills. 

“A major finding is that rural communities are more likely to be in ‘banking deserts’ while rural people actually depend on physical bank branches more than their urban and suburban counterparts,” said Shawn Sebastian, a Senior Fellow at CFPB and staff for the agency’s 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. That’s a clear mismatch, and in that important gap we see some downstream effects.” 

Those impacts lead to credit issues for rural people, according to the CFPB. “Rural people are least likely to have a credit record maintained by one of the large national credit reporting agencies, and as a result, accessing the credit that you need is harder,” Sebastian said. “Rural consumers have the lowest utilization of bank credit and the highest utilization of non-bank credit, including higher-cost options like payday loans and pawn shops and other things of that nature.” 

In addition to banking and credit issues, the CFPB under President Joe Biden is focused on addressing discriminatory and predatory agricultural credit practices, particularly those that target Black farmers, that can lead to loss of land and wealth, as well as working with rural people to create more fair and transparent facing lending practices with respect to manufactured housing. 

The CFPB also offers services to rural organizations working on rural financial services, community development, accountability by corporations, or local economic development. “If you are an organization that represents rural people and you’d like to set up a training or would like to access our education services, or you’d like to kind of set up a meeting with us at CFPB, we’d love to work with you,” Sebastian said. 

The report also found that despite rural credit and banking challenges, rural people are much less likely to use CFPB consumer protection tools. The agency’s Rural Initiative was designed in part to help rural people and organizations find out about and use available CFPB resources. 

“One of our best resources is our complaint mechanism,” Sebastian said, which consumers can access at the CFPB Complaint Site. “If you’re experiencing an issue with a payday loan or your bank, a questionable overdraft fee, any kind of consumer financial issue that involves 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 really important way for us to at the CFPB to track bad actors, a very tangible way to make sure they are following the law,” Sebastian said. 

The CFPB is also tasked with helping rural small business owners address unfair or predatory financial practices. “If you’re a small business owner with issues regarding 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 are facing,” he said.  

“We want to make sure that rural small businesses are able to access fair credit because we know that in rural areas a disproportionally large number of people are employed by small businesses.” 

Sharing stories with CFPB is encouraged at the agency’s “Share Your Story” intake page. 


Organizations serving rural communities with suggestions or insights on how best to address the issues rural communities are facing, or those requesting access to financial empowerment resources from the CFPB, should email the agency at: yourmoneyyourgoals@cfpb.gov.

You can file a complaint with CFPB by clicking HERE.

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