Helping Expand Lending Practices in Rural Communities Act

Floor Speech

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Mr. BARR. Mr. Speaker, I thank the chairman of the Subcommittee on Financial Institutions and Consumer Credit for yielding and for his support of this legislation. I also want to thank my colleagues on both sides of the aisle who have joined together to support this bipartisan legislation that makes a small but sensible legislative correction to a regulatory policy that we have all heard from our constituents does not work as intended.

Mr. Speaker, I am pleased to have worked with the gentleman from Texas (Mr. Hinojosa) to reintroduce H.R. 1259, the Helping Expand Lending Practices in Rural Communities Act, or HELP Rural Communities Act, in this Congress. This legislation has now cleared the Committee on Financial Services in two consecutive Congresses with overwhelming bipartisan support. Furthermore, this Chamber approved identical legislation just 11 months ago by voice vote under suspension of the rules.

Our Federalist system of limited government enshrines in the law the idea that State and local entities know their communities better than any centralized bureaucracy in Washington. The HELP Rural Communities Act reaffirms this commitment by addressing a bizarre situation resulting from the imposition of a one-size-fits-all government regulation that fails to consider the diversity of the cities, towns, and rural areas across America.

The genesis of this legislation was a conversation that I had with a constituent, a third generation banker in rural Bath County, Kentucky. This constituent, Thomas Richards, was bewildered to learn that the Consumer Financial Protection Bureau had designated Bath County, population 11,591--yes, that is the entire county--as nonrural. His family's bank had survived the Great Depression, the stagflation of the late 1970s and early 1980s, and the Great Recession of 2008; and yet his testimony, Thomas Richards' testimony, this third generation Kentucky community banker, was that his small community bank in rural Kentucky was being imperiled by an avalanche of red tape coming out of Washington bureaucracy. There are similar stories from rural communities across this country.

This nonrural designation matters because the Dodd-Frank Act acknowledges that rural areas may be underserved credit markets and so should be treated differently under financial regulations, thus an improper nonrural designation by the Bureau, such as Bath County, puts constraints on financial products, specifically responsibly underwritten balloon loans that a bank or credit union can offer in its community, reducing access to credit in rural America. Balloon loans are common throughout rural America because they offer flexibility to consumers whose incomes are often cyclical and dependent on commodities, while helping small community banks and credit unions mitigate interest rate risk.

H.R. 1259 fixes the problem by ensuring that rural areas are treated under the law as intended, by allowing entities that feel that they have been improperly designated to appeal that decision. Here is what the bill does:

H.R. 1259 creates a petition process in which individuals within a State could petition the Consumer Financial Protection Bureau to have that area redesignated and to have the Bureau reconsider its improper designation of ``nonrural'' for the area that is plainly rural. The legislation specifies a number of commonsense factors that the Bureau must consider when evaluating an application. Upon receiving an application, the Bureau is to provide for a 90-day public comment period, and then grant or deny such an application within an additional 90 days. Whatever the outcome, the Bureau shall publish in the Federal Register an explanation of the factors it relied on in making its determination. The bill allows appellants to identify the area that is improperly designated. We don't want to lock people into using counties or ill-fitting census tracts that don't accurately represent the boundaries of their communities.

I want to thank the gentleman from Texas (Mr. Hinojosa) for his important contribution to this feature of the legislation. This element is important because county sizes and census definitions of statistical areas can vary significantly throughout the country, particularly in Western States.

Recognizing the issue with its designation process, on January 29, the Bureau proposed a rule to expand its formula to include census tracts in addition to county lines in its rural designation process. Unfortunately, this administrative correction that was prompted by this legislation is still inadequate because census tracts are only updated once every 10 years and were designed for demographic data collection, not regulatory purposes. The result is that the Bureau's formula may now consider most of a rural county primarily farmland or wilderness to be rural, but the small town that would be home to the actual community bank or credit union may remain nonrural.

I have already heard from Kentucky bankers in rural counties who would not be covered by this expanded designation. There are plenty of similar examples throughout the country of the Bureau oddly designating manifestly rural areas as ``nonrural.'' Furthermore, the Bureau still has not implemented an appeals process for improperly designated communities.

Mr. Speaker, in summary, this legislation is about inviting individuals--the American people--to participate in their government and provide input on matters of local knowledge. It is about making the Federal Government more accessible, more accountable, and more responsive to the people who know their local communities best.

I am pleased that this legislation enjoys bipartisan support and, again, want to thank Representative Hinojosa for joining me as a cosponsor of this legislation. I want to thank Chairman Neugebauer for his cosponsorship and stewardship of the legislation in committee, as well as my friend Congressman French Hill for joining as a cosponsor.

This legislation is endorsed by a broad coalition, including the U.S. Chamber of Commerce, the Conference of State Bank Supervisors, the National Association of Realtors, the American Bankers Association, the Independent Community Bankers of America, the Credit Union National Association, and the National Association of Federal Credit Unions.

This is a commonsense and narrowly focused bill to address a real problem imposed by Washington on rural America. I appreciate the opportunity to present it here

today, and I urge my colleagues to support this simple, bipartisan reform.

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