"Community bankers are growing increasingly concerned that the Consumer Financial Protection Bureau will eliminate one of their bread-and-butter products: balloon loans," writes American Banker's Kate Berry.

With the release of the qualified mortgage rule in January, the CFPB essentially banned balloon loans. Regulators were given an exemption to community banks in rural or underserved markets.

"It would completely break our business model," says Chad McClung, president of the $83.7 million-asset Colfax Banking Co. in Colfax, La.

"We cannot survive if they take away our ability to make balloon loans," says Kathleen Cook, president of the $76 million-asset Village Bank in St. Libory, Ill. "Balloon loans are the main way for us to make money. We can't stay in business just on originating and servicing fees."

For the full piece see "Community Banks Alarmed by CFPB's View on Balloon Loans" (may require subscription).