13-03-2025
The Trump Administration disbanded the Consumer Financial Protection Bureau. Here's how it could impact rural communities.
ALBANY – Fighting junk fees, tackling medical debt and aiding banking deserts are just some of the protections the Consumer Financial Protection Bureau (CFPB) provided for rural communities.
In February, the Trump administration halted the CFPB's work, which had long been subject to scrutiny by conservatives who claimed the agency, funded by the Federal Reserve System, lacked sufficient supervision and regularly exceeded its regulatory authority. A report from the Health, Environment Agriculture, Labor (HEAL) Food Alliance, which is a coalition representing about 2 million rural and urban farmers, ranchers, fishers and more, said this freeze puts rural communities at risk of losing critical financial protections.
Diane Standaert was one of about 170 employees, who were, she said, illegally fired from the CFPB in February. Her work addressed unfair, abusive and deceptive practices in the financial marketplace with a focus in ensuring the CFPB was responding to the needs of rural consumers.
'The important work of the CFPB has been stymied and not allowed to continue in a way that prevents people from being scammed and cheated by financial institutions, banks, predatory lenders and debt collectors,' Standaert said.
Since its beginnings, the CFPB reports fielding more than 7.7 million complaints and providing more than $21 billion in relief to people who have been harmed by financial practices. The CFPB was created following the 2008 recession to monitor credit card companies, mortgage providers, debt collectors and other segments of the consumer finance industry.
Standaert said rural communities took longer to recover from that recession in terms of job losses.
'The recession was fueled by predatory lending practices, and the CFPB was created to prevent something like that from happening again,' she said. 'Attempts to shutter and stop and hamstring the CFPB are essentially opening the doors for a financial crisis to happen again.'
Standaert said the impact will be higher bank fees, less protections against predatory lenders and fraud in things like digital payment app transactions that people use every day.
'There's no longer a watchdog on the beat to ensure that people are not being scammed out of their money,' Standaert said.
During the Biden administration, the CFPB passed rules capping bank overdraft fees and removing medical debt from credit reports. Now, these rules are on hold.
CFPB research shows that rural consumers are more likely to have medical debt on their credit reports. In January, the CFPB finalized a rule to remove medical debt from credit reports for lending decisions. Under the Trump Administration, work on this rule has stopped.
SOWEGA Rising, a southwest Georgia nonpartisan nonprofit that works to uplift marginalized southwest Georgians, helped advocate for the removal of medical debt on credit reports. SOWEGA Rising's Executive Director Sherrell Byrd said medical debt has a disproportionate impact on rural, black and brown communities.
'When it hits the credit reports or our citizens, it impacts their economic upward mobility, so they're no longer able to purchase homes, cars … in some instances, it may even affect them being able to get a job,' she said.
Byrd said some $49 billion of medical debt was to be removed from credit reports, impacting about 6 billion Americans.
Byrd said the CFPB gave SOWEGA Rising and southwest Georgia community members a chance to share their stories about the impact of medical debt on their lives in D.C. during 2023. She said the agency also ensured advocacy groups like SOWEGA Rising had a seat at the table when it came to discussing housing struggles from a rural standpoint.
She said the disbanding of the CFPB completely rolls back this work.
The HEAL Report also emphasizes the CFPB's work in fighting banking deserts. It reads that in the wake of mega-bank mergers, rural communities are losing bank branches within their communities. The CFPB had just issued a new rule to ensure federal oversight over the largest payment apps to reduce fraud and protect personal data — critical for rural areas increasingly dependent on digital payments as physical banks disappear. These protections were lifted.
However, Neil Lowe, president of the Bank of Edison, said the CFPB's regulations actually harmed his small community bank. Lowe has held his position since 1991, following in the footsteps of his grandfather and great grandfather. He called the Bank of Edison a progressive and 'true community bank' that protects its customers.
'If you are a true community bank, everyone in your community has access to banks,' Lowe said. 'We still do small loans under $1,000. If you're worth your salt in Edison, Georgia, you can open an account here.'
He said the regulations placed on the bank by the CFPB added burden and cost.
'It probably cost this little bank about $50,000 a year in regulatory costs,' Lowe said. 'Our biggest cost, other than interest expense and payroll, was regulatory cost.'
Lowe said the goal of the CFPB sounds great but doesn't necessarily apply to small, community banks or understand the operations of rural communities. He said he agrees 'big banks' needed to correct abusive practices on the 'little guy' like strict overdraft fees. At the Bank of Edison, Lowe said they don't even charge for a $50 overdraft.
'We have a loan on every road in Calhoun County,' he said. 'We're serving our community – it doesn't apply to us. We've got a great state office, great FDIC people in Georgia. We don't need somebody from Washington coming down here and telling us how to operate.'
Lowe said the Bank of Edison has never been predatory, but with the CFPB he feels that he has to prove that they're not.
'It's not innocent until proven guilty, it's guilty until proven innocent,' he said.
Lowe said big changes like the installation of the CFPB can have ripple effects that these institutions aren't always aware of. He said he sees this on both sides of the aisle, including in some of the other decisions made by the Trump administration.
