The Consumer Financial Protection Bureau has made no secret of the fact that it wants states to be more proactive when it comes to regulating the financial services industry, and now there are a couple of pieces of evidence to show just how supportive the Bureau is of those efforts.
Recently, Rohit Chopra, the director of the CFPB, sent a letter to California state Sen. Monique Limon, who is behind a bill that seeks to add medical debt to a list of items that would be prohibited from appearing on consumer credit reports, and Brian Shearer, the CFPB’s Assistant Director in the Office of Policy Planning and Strategy wrote to the architect of a similar law in Connecticut.
“… the CFPB welcomes and encourages state legislatures to pass laws reinforcing or exceeding the consumer protections of existing federal laws and regulations,” Chopra wrote in his letter endorsing SB 1061. This bill “would join a recent wave of efforts by states to protect consumers against medical credit reporting.”
California’s bill, if enacted, would help buttress efforts by the CFPB to prohibit creditors from using or obtaining medical bills and collection information for underwriting decisions and prohibit credit bureaus from providing such information to creditors.
Shearer also praised Connecticut and other states for “enacting laws that go further than or reinforce federal protections,” noting that the Fair Debt Collection Practices Act and the Fair Credit Reporting Act have narrow preemption parameters. States that enact laws that prohibit furnishers from furnishing information about medical dent to consumer reporting agencies would generally not be preempted under either statute, Shearer noted, and that efforts from industry groups to argue that the FCRA preempts state laws have been unsuccessful.
“Debt collectors have many other legal remedies to collect legitimate medical bills without resorting to coercive credit reporting,” Shearer noted.
