Congressman Cleaver Secures Proposal from CFPB That Will Help Rural Banks and Consumers

After a personal call with Consumer Financial Protection Bureau (CFPB) Director Richard Cordray, U.S. Congressman Emanuel Cleaver today announced that the CFPB will propose changes to existing mortgage rules to promote responsible lending by small creditors, especially in rural and underserved areas. If finalized, the proposal would increase the number of financial institutions able to offer certain kinds of mortgages in rural and underserved areas, and help small creditors adjust their business practices to comply with the new rules. Congressman Cleaver, now the Ranking Member of the Subcommittee on Housing and Insurance, first pushed for these changes in April of 2013.

"Community banks did not cause our financial crisis, and we shouldn't ask them to pay the penalty," stated Congressman Emanuel Cleaver, II. "I have pushed for protections for these smaller institutions, who play a vital role in Missouri's Fifth District, so they can keep serving rural consumers. The Ability-to-Repay Rule started as a well-intentioned rule, but it was combined with a narrow exception and some worrisome execution. But the previous exemption relied upon a narrow definition that treated our thriving rural communities as mere suburbs of Kansas City. That may mean little to folks up in Washington, but it means much to me and my constituents. While I have not agreed with every decision the CFPB has made, today I am impressed and encouraged by their ability to educate, regulate, and accommodate different constituencies and interests. Ultimately, we must keep working with consumers, lenders, and regulators to make sure consumers get a fair shake, to help banks work with families buying their first home, to allow entrepreneurs to access capital responsibly, and to keep our financial system safe and secure."

Congressman Cleaver originally met with rural bankers from Missouri's Lafayette County and Saline County, in April of 2013. Many of the local bankers shared their concerns with the regulatory burden imposed by the CFPB's Qualified Mortgage/Ability-To-Repay rule. Immediately after this meeting, Congressman Cleaver wrote to Director Cordray, urging that the rule be re-evaluated and recommending a more expansive definition. His letter to Director Cordray is available here. In response to such concerns, the Bureau announced in May 2013 whether the definitions of rural and underserved should be adjusted. More information about the rule is available here.

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