September 1, 2022

CFPB: New Report Details Family Finances and Debt in Rural Appalachia

Appalachians Face Higher Debt Burdens and Worse Credit Conditions than Most Other Parts of Rural America

The Consumer Financial Protection Bureau (CFPB) has issued the first in a series of reports focusing on the finances of consumers living in rural areas. Today’s report focuses on rural Appalachians, who tend to earn less than consumers in other rural areas and have higher rates of subprime credit. In particular, medical debt collections are a much more prevalent issue among rural Appalachians, and consumers with medical debt collections often experience difficulties making ends meet on other financial obligations.

“The Appalachian region of our country faces distinct challenges from other parts of rural America,” said CFPB Director Rohit Chopra. “Rural America plays a pivotal role in our nation’s food security and national security, so we must work to ensure that the financial marketplace can help families survive and thrive.”

The CFPB’s report finds that nearly 24 percent of rural Appalachians have a medical debt in collections, compared to just 17 percent nationally. Moreover, rural Appalachians with medical debt collections have over double the rates of delinquency for other credit products compared to those without medical debt collections in each category.

For example, while 12 percent of rural Appalachians had auto loans that were delinquent, those with medical debt collections had a 29 percent rate of auto loan delinquency. The CFPB’s report also found:

Today’s report examines the Appalachian region, which spans across 13 states, and is disproportionately rural. Thirty-three percent of the nearly 26 million Appalachians live in a rural county, compared to 14 percent of people nationwide. More than 2 million Appalachians live in Persistent Poverty Counties (PPCs), which are defined as counties that have had poverty rates of 20 percent or higher for the past 30 years. Consumers in PPCs often encounter higher interest rates and fewer financial offerings due to the increased credit risk in the county.

Other findings in the CFPB’s report include:

Read today’s report Consumer Finances in Rural Appalachia.

Today’s report is part of a series that will highlight consumer finances in rural communities across the country with higher concentrations of Persistent Poverty Counties.

The CFPB encourages consumers to use the Bureau’s Tell Your Story tool to share positive or negative experiences they have had with the financial products and services. Consumers can also submit complaints by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

This post was originally published here.