Ohio farmers have expressed concern with the definition of “rural” being used by the Consumer Financial Protection Bureau (CFPB).
Many Ohio counties defined as “rural” by methods applied by the State of Ohio and other agencies, are excluded under CFPB’s current definition, which has ramifications for farmers seeking certain types of mortgages.
In January 2014, CFPB will implement a 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.
This regulation will have a direct impact on the economic development in counties that do not meet the current definition, under which community banks serving these counties would be unable to provide such loans or mortgages.
U.S. Sen. Rob Portman (R- Ohio) and Rep. Bob Latta (R- Bowling Green) have led other members of Ohio’s congressional delegation in reaching out to CFPB on this issue.
Portman noted the important role agriculture plays in Ohio’s economy in a letter he sent to CFPB last month. “…With agriculture being the largest industry in Ohio, proposals that could have a negative economic impact on Ohio’s rural communities are particularly concerning,” he said in the letter.
A follow up letter from Portman, Latta and other Ohio delegates said, “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.”
Ohio Farm Bureau supports the efforts of these elected officials and has been engaged with them on this issue.
“These balloon mortgages are important for farmers so we will continue to be engaged on this issue to ensure Ohio farmers have access to the economic resources they need,” said Yvonne Lesicko, senior director of legislative and regulatory for Ohio Farm Bureau.