State banking regulators are asking the Consumer Financial Protection Bureau to be flexible in its definition of a "rural" market when determining when a community bank is eligible to make a balloon loan. Under its proposed lending guidelines, the CFPB has essentially outlawed the product, but it provided an exemption to community banks in rural or underserved markets. Community bankers are concerned, however, that the regulator's definition of rural is so narrow that it would force many small banks to stop making balloon loans. As a result, consumer access to mortgages could be squeezed in markets that are essentially rural but that do not meet the USDA's criteria for that classification. In a letter to CFPB director Richard Cordray, the Conference of State Bank Supervisors urged the watchdog to establish a policy whereby it rules whether a market is rural on a case-by-case basis.