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Congressman Bob Latta (R-Bowling Green) led a letter, signed by members from the Ohio delegation, to the Consumer Financial Protection Bureau (CFPB) regarding the definition of "rural" counties as it applies to qualified mortgages under the Ability-to-Repay (ATR) rule.

This coming January, the CFPB will implement its rule to restrict "balloon" mortgages, however an exemption has been provided for community banks in rural or underserved markets. Farmers and other small businesses in rural communities often seek balloon mortgages because they allow access to credit in the event borrowers otherwise could not get traditional loans.

Under the CFPB's current definition of rural, many counties in Ohio that have otherwise been defined as rural using methods applied by the state of Ohio and other governing agencies are excluded. This regulation will have a direct impact on the economic development in counties that do not meet the current definition as community banks serving those areas will be unable to provide such loans or mortgages. The CFPB recently announced a two-year transition period to review the current definition of rural. 

“The current CFPB definition of rural will have a negative effect on protections for community lenders who provide balloon mortgages to farmers, small businesses, and other trusted members of the community.  Without a revised definition of rural, many qualified borrowers in counties across Ohio will not be able to get a mortgage,” the letter reads. 

Click here for full text of the letter.

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