Consumer Bureau Report Says Debt is Highest in Rural Appalachia

CFPB report examines debt in rural areas, notes credit conditions worse in Appalachia than in most of America

The Consumer Financial Protection Bureau (CFPB) has begun issuing a series of reports on debt and consumer finance in rural America. The first in the series covers consumer finance issues in Appalachia.

The report notes that rural Appalachians 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.

Here are some examples of other debt burdens correlated to medical debt in Appalachia:

• Fifteen percent of rural Appalachians had a credit card delinquency, while 37 percent of rural Appalachians dealing with a medical debt collection also had a credit card delinquency.
• Eighteen percent of rural Appalachians had student loans that were delinquent, while rural Appalachians with a medical debt collection had a 37 percent rate of student loan delinquency.

Abigail Ducote/Unsplash