[Congressional Record (Bound Edition), Volume 161 (2015), Part 4]
[House]
[Pages 4803-4805]
[From the U.S. Government Publishing Office, www.gpo.gov]




       HELPING EXPAND LENDING PRACTICES IN RURAL COMMUNITIES ACT

  Mr. NEUGEBAUER. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1259) to provide for an application process for interested 
parties to apply for an area to be designated as a rural area, and for 
other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1259

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

[[Page 4804]]



     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Helping Expand Lending 
     Practices in Rural Communities Act''.

     SEC. 2. DESIGNATION OF RURAL AREA.

       (a) Application.--Not later than 90 days after the date of 
     the enactment of this Act, the Bureau of Consumer Financial 
     Protection shall establish an application process under which 
     a person who lives or does business in a State may, with 
     respect to an area identified by the person in such State 
     that has not been designated by the Bureau as a rural area 
     for purposes of a Federal consumer financial law (as defined 
     under section 1002 of the Consumer Financial Protection Act 
     of 2010), apply for such area to be so designated.
       (b) Evaluation Criteria.--When evaluating an application 
     submitted under subsection (a), the Bureau shall take into 
     consideration the following factors:
       (1) Criteria used by the Director of the Bureau of the 
     Census for classifying geographical areas as rural or urban.
       (2) Criteria used by the Director of the Office of 
     Management and Budget to designate counties as metropolitan 
     or micropolitan or neither.
       (3) Criteria used by the Secretary of Agriculture to 
     determine property eligibility for rural development 
     programs.
       (4) The Department of Agriculture rural-urban commuting 
     area codes.
       (5) A written opinion provided by the State's bank 
     supervisor, as defined under section 3(r) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1813(r)).
       (6) Population density.
       (c) Public Comment Period.--
       (1) In general.--Not later than 60 days after receiving an 
     application submitted under subsection (a), the Bureau 
     shall--
       (A) publish such application in the Federal Register; and
       (B) make such application available for public comment for 
     not fewer than 90 days.
       (2)  Limitation on additional applications.--Nothing in 
     this section shall be construed to require the Bureau, during 
     the public comment period with respect to an application 
     submitted under subsection (a), to accept an additional 
     application with respect to the area that is the subject of 
     the initial application.
       (d) Decision on Designation.--Not later than 90 days after 
     the end of the public comment period under subsection (c)(1) 
     for an application, the Bureau shall--
       (1) grant or deny such application, in whole or in part; 
     and
       (2) publish such grant or denial in the Federal Register, 
     along with an explanation of what factors the Bureau relied 
     on in making such determination.
       (e) Subsequent Applications.--A decision by the Bureau 
     under subsection (d) to deny an application for an area to be 
     designated as a rural area shall not preclude the Bureau from 
     accepting a subsequent application submitted under subsection 
     (a) for such area to be so designated, so long as such 
     subsequent application is made after the end of the 90-day 
     period beginning on the date that the Bureau denies the 
     application under subsection (d).
       (f) Sunset.--This section shall cease to have any force or 
     effect after the end of the 2-year period beginning on the 
     date of the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Neugebauer) and the gentleman from Massachusetts (Mr. 
Capuano) each will control 20 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. NEUGEBAUER. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
add extraneous materials on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. NEUGEBAUER. Mr. Speaker, I yield 7 minutes to the gentleman from 
Kentucky (Mr. Barr), one of the primary authors of this bill.
  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

[[Page 4805]]

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.
  Mr. CAPUANO. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Texas (Mr. Hinojosa), my friend.
  Mr. HINOJOSA. I want to thank Congressman Mike Capuano for yielding 
time to me on this important bill.
  Mr. Speaker, I rise today in support of H.R. 1259, the Helping Expand 
Lending Practices in Rural Communities Act. This commonsense 
legislation would provide much-needed relief to rural Americans not 
just in my district, but in districts all over the country.
  I especially would like to thank my esteemed colleague from Kentucky, 
Representative Andy Barr, for introducing this very important piece of 
legislation once again. I fully agree with Congressman Barr's examples 
which he gave affecting his district and all of the State of Kentucky 
because in the great State of Texas, we have examples that will mirror 
those that you gave us.
  All across my district--and I represent approximately 80 communities 
in my congressional district that expands 250 miles geographically--
many rural communities are having trouble getting access to credit, 
while credit unions and small banks are also finding it difficult to 
service their members and clients.
  The designation of a county as rural has many implications for 
lenders in those areas, especially with regard to the credit products 
that they can offer. For example, under the new qualified mortgage 
rules, balloon mortgage payments, which are a common credit product 
offered in rural communities, would expose small creditors to increased 
legal liability. Because of this, the Consumer Financial Protection 
Bureau established a safe harbor to allow for small creditors in 
counties as I have described designated as rural to continue offering 
this financial product which serves so many of the people in those 
areas; but if not designated as rural, many of those communities I have 
mentioned will not qualify for the safe harbor exemption.
  That is why we are here today, trying to fix something that needs to 
be fixed in terms of home mortgage lending. This bill gives those who 
do business in rural communities all over the country the ability to 
petition the CFPB to reverse an improper designation of nonrural for a 
county that is clearly rural. It will give lenders in many areas 
throughout my district the flexibility they need to offer the credit 
products that their members depend on, while still keeping in place the 
very important consumer protections established under the new QM rules.
  I would like to once again thank Representative Barr for his 
outstanding work on this bill and in our committee. It has been 
wonderful collaborating with him to bring the concerns of rural 
communities to the forefront.
  I respectfully request that my colleagues on both sides of the aisle 
vote ``yes'' on passage of H.R. 1259.
  Mr. NEUGEBAUER. Mr. Speaker, I don't have any other speakers at this 
time, so I will reserve the balance of my time.

                              {time}  1630

  Mr. CAPUANO. Mr. Speaker, I have no further speakers on this bill.
  I would like to add my voice to supporting this bill as well.
  I will tell you unequivocally, my definition of rural is whatever 
Andy Barr and Ruben Hinojosa say it is. 11,591 people in a county? I 
have that on a street; I have that in a building. I will tell you that 
I understand full well that there are underserved communities in rural 
areas, as there are even in some of the most urban areas in the 
country.
  I thank the gentleman for this bill.
  I will tell you that my definition of rural is anyplace that would 
take me more than 15 minutes to drive to some good Italian food. If you 
can't do that, it must be rural.
  I am glad that this bill is about to pass, and I thank the gentleman 
for offering it.
  I yield back the balance of my time.
  Mr. NEUGEBAUER. Mr. Speaker, I just want to close by saying I 
appreciate Mr. Barr's and Mr. Hinojosa's work on this very important 
issue.
  One of the reasons we are here and bringing these bills today is 
because we have had a tremendous reduction in the number of community-
based financial institutions that serve rural America. In the last 4 or 
5 years, we have lost over a thousand community banks and we have lost 
over a thousand credit unions. That is a real problem for our smaller 
communities. One of the things that this bill helps to do is that in 
many communities there is one bank, there is one financial institution, 
and without the ability to have flexibility to make these kinds of 
mortgages, in many cases there would not be mortgages available in 
those communities. This is a commonsense bill. It passed 56-2 out of 
our committee. I would urge my colleagues to support this bill.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Texas (Mr. Neugebauer) that the House suspend the rules 
and pass the bill, H.R. 1259.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. NEUGEBAUER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

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