The General Counsel and Senior Advisor to the Director of the Consumer Financial Protection Bureau game a speech yesterday to consumer advocates in New Jersey where he discussed in great detail the Bureau’s efforts to regulate medical debt and the new proposal to eliminate medical debts from consumers’ credit reports, while also sharing some comments about the hearing on Tuesday before the Supreme Court to determine whether the Bureau’s funding structure is constitutional or not. The remarks spell out how the Bureau is “very concerned that the credit reporting of medical bills is being used inappropriately as a debt collection tool” which is a “deliberate misuse of the credit reporting system” by collectors.
The full remarks from Seth Frotman are available by clicking here.
Starting at the end of Frotman’s remarks, he again trots out the line that there is “research” demonstrating that owing medical debt is not an indicator of a consumer’s creditworthiness. What he fails to mention is that research is nearly a decade old and was based on data that was five years old.
On the issue of collectors using credit reporting as a “coercive” tool, Frotman “assured” the audience that “debt collectors have ample legal remedies to collect legitimate medical bills without resorting to coercive credit reporting that affects everything from a consumer’s ability to get a job to renting an apartment to getting a car loan.”
Frotman also talked about the Bureau’s interest in medical financial products, like credit cards that are used exclusively for medical payments. “In many cases” according to research from the Bureau, “patients who use these products end up worse off.”
Collectors who chase after consumers to pay debts without having enough information to ensure they are collecting the right amount was also discussed in Frotman’s remarks.
On the Supreme Court hearing, Frotman said:
“This is not the first time the CFPB has faced challenges to our important work in the Supreme Court. And I am very proud that the Bureau and its staff have not let these challenges deter us from rigorously pursuing the critically important mission Congress gave us – to protect the hundreds of millions of Americans that rely on the market for consumer financial products and services. You can rest assured that in the months and years ahead, under Director Chopra’s watch that will continue to be the case.”
