CFPB Adopts Procedural Rule Establishing Application Process for the Designation of Rural Areas

CFPB Dodd-Frank Community Banks

On March 3, the CFPB adopted a procedural rule to establish an application process for identifying an area as rural or underserved that the CFPB, pursuant its authority under the Dodd-Frank Act, had not yet designated as rural. In December 2015, Congress passed the FAST Act, which contained several provisions intended to provide regulatory relief to community banks, including implementing a process under which banks and other stakeholders could petition the CFPB for rural or underserved designations in certain areas for the purposes of Federal consumer financial law. The CFPB’s recently issued procedural rule establishes such an application process. Under the process, banks must submit an application—by mail, email or hand delivery—to the CFPB Rural Application Coordinator containing, among other things, the following: (i) identifying information for the proposed designated rural area; (ii) justification for the proposed designation, providing supporting information from the U.S. Census Bureau, the Office of Management and Budget, the Department of Agriculture, and the State Bank Supervisor; and (iii) the area’s population density, including comparative information regarding “the population density of any nearby area with a greater population density that has been designated by the Bureau as a rural area.” The CFPB will begin accepting applications on March 31, 2016.