WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) has released a report that details the financial issues of rural Appalachians.

“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.”

According to the CFPB’s report, Consumer Finances in Rural Appalachia, more than 2 million Appalachians live in Persistent Poverty Counties (PPCs), 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.

Report findings include:

  • Only 71 percent of rural Appalachians and 63 percent of rural Appalachians living in PPCs have an active credit card, compared to 80 percent of consumers nationally. Consumers that do not have access to credit cards often have to turn to more costly alternatives for credit, such as payday loans and pawn shops.
  • The median of student loan balances as a percentage of household annual income is 41 percent for rural Appalachians, compared to 32 percent for the nation. Auto loan balances account for 31 percent of household annual income for rural Appalachians, compared to 21 percent nationally.
  • Denial rates for mortgage applications in rural Appalachia (21 percent) were almost twice the rate of mortgage applications nationally (11 percent). For rural Appalachian PPCs, the denial rates were 35 percent.
  • Rural Appalachians endured higher home loan interest rates for home purchases in 2021 compared to the nation. The national average was 3.13 percent, while rural Appalachians had an average rate of 3.41 percent. Rural Appalachian PPCs had average rates of nearly 4 percent (3.86).

When comparing West Virginia with the rest of the nation, the report found that:

  • The median of student loan balances as a percentage of annual household income in rural Appalachian West Virginia was 39 percent, compared to 38 percent for the state as a whole, and the national median of 32 percent.
  • 23 percent of consumers in the rural Appalachian area of West Virginia had a mortgage, compared with the state average of 25 percent, and the national average of 29 percent.
  • 69 percent of consumers in the rural Appalachian area of West Virginia had a credit card, with a median balance of $999. In comparison, 72 percent of consumers in West Virginia had a credit card with a median balance of $1,021, while the national average was 80 percent with a credit card with a median balance of $1,207.
  • 29 percent of rural Appalachian consumers in West Virginia had a medical debt collection, compared to 30 percent for the state as a whole, and only 17 percent for the national average.
  • 34 percent of rural Appalachian consumers in West Virginia had a subprime or deep subprime credit profile, while the entire state had 33 percent of consumers with the similar credit profiles. The national average for the two categories was 25 percent.

The report also found that more rural Appalachians have a medical debt in collections than the rest of the nation. And those with medical debt collections tend to have over double the rates of delinquency for other credit products, such as credit card delinquency and student loan delinquency