CFPB Releases Rural and Underserved Counties List
In 2022, the Consumer Financial Protection Bureau ("CFPB") released its annual “rural” and “underserved” counties list during the 2021 period for lenders to review and utilize. In a final rule released in 2020, the CFPB defined the term “underserved” as a county “in which no more than two creditors extended covered transactions, as defined in Regulation Z,[1] secured by first liens on properties in the county five or more times.”
In the 2020 final rule, the CFPB explained that the list is to be “used in applying various Regulation Z provisions, such as the exemption from the requirement to establish an escrow account for a higher-priced mortgage loan and the ability to originate balloon-payment qualified mortgages.”
The 2022 announcement advises lenders to utilize the Rural or Underserved Areas Tool to ensure, via a safe harbor determination, that a property in a covered transaction is located in a rural or underserved area.
[1] 12 CFR 1026.43 defines a “covered transaction” as “a consumer credit transaction that is secured by a dwelling, as defined in § 1026.2(a)(19), including any real property attached to a dwelling, other than a transaction exempt from coverage under paragraph (a) of this section.”