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220px-Dean Heller Official Senate Portrait 112th CongressMajority Leader McConnell and Senators Heller and Manchin sent the below letter to CFPB Director Cordray outlining their concerns about the CFPB’s definition of ‘rural’ Qualified Mortgages.

Dear Director Cordray:

We are writing in regards to the Consumer Financial Protection Bureau’s (CFPB’s) definition of rural as it pertains to Qualified Mortgages under the Ability-to-Repay and other mortgage rules. As Members of Congress who represent rural areas, we have heard from our constituents about their concerns regarding the definition of rural and the process the CFPB has used to determine it.



As you know, section 1412 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203) permits the origination of Qualified Mortgages with balloon payments in “rural” and “underserved” areas. However, as many Members of Congress expressed, the current definition, as established by the CFPB, excludes a significant number of demonstrably rural areas and – just as importantly – neglects to provide rural communities with any input in the process. As you are well aware, on January 29, 2015, the CFPB proposed changes to its rural definition, which would expand the definition from the United States Department of Agriculture’s (USDA’s) Urban Influence Code to include non-urban areas as defined by the United States Census Bureau.

While we welcome this attempt to improve the rural definition, we remain concerned that – once again – rural communities are left without a voice. Legislative proposals have been introduced in both the 113th (H.R. 2672/S.1916) and the 114th Congresses (H.R. 1259) to create an appeals process that would allow communities that may unintentionally – yet incorrectly – be excluded from the definition of rural to petition the CFPB with important local information for reconsideration of their status. As the CFPB strives to find the most accurate and effective ways to serve our nation’s rural communities, we request that your agency implement such an appeals process to ensure rural communities have input in the definition process.

In addition, the CFPB also proposed shortening the time period used to determine whether a creditor is operating predominantly in a rural or underserved area from any of the preceding three years to just the single preceding year. Considering the natural variability of business from year to year, we believe that this would be a mistake and that the CFPB should retain the three-year determination time period.

Finally, we would like to encourage the CFPB to relax the requirement that 50 percent or more of originations must take place in rural or underserved areas to qualify for the rural exception. As you may know, many rural and underserved areas receive essential services from small community lenders that border rural areas or do business in areas not designated as rural, and these parts of the population should be afforded relief to ensure the continuity of access to mortgage credit. As such, we believe it would be appropriate for the CFPB to use its authority to reduce the origination requirement below 50 percent.

While our nation works to overcome the consequences of a devastating financial downturn, it is important that rural communities are not forgotten. As we strive to ensure these communities have a voice, we invite you to do the same.

Thank you for your consideration.