The Consumer Financial Protection Bureau issued its final rule that will prohibit lenders from factoring medical debts into their credit determinations for consumers yesterday, but it’s likely that the battle over this rule is anything but final. The rule doesn’t officially go into effect for 60 days, and with a new president set to take over in two weeks, and the future of the CFPB Director anything but certain, much could change. There could also be legal challenges to the rule, with at least one industry trade association saying it was “weighing its options” in a published report and given that the CFPB has been sued for other guidance it has issued related to medical debt collection. In the meantime, here are some reactions to the rule’s release, to provide insight and context to where things are likely to go from here.
The CFPB’s action will limit the availability of financial products to everyday consumers. Unfortunately, this rule will cut off responsible credit to those who need it most. The U.S. Chamber supports increasing – not limiting – information included on credit reports to expand access to credit and to protect consumers from risky loans. The Chamber will pursue options to prevent this harmful rule from going into effect.” –Bill Hulse, Senior Vice President of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness
With just days left in the Biden administration, CFPB Director Chopra is pressing forward in his pursuit of headlines and political talking points over sound policy decisions. Medical debt is a serious challenge for many Americans, but the CFPB’s final rule will do nothing to address the underlying issues. Instead, the rule will reduce access to credit and important health care services while putting lenders and medical providers at risk. I look forward to working with the next CFPB Director to undo the damage caused by the Biden administration’s policies, and to find real solutions to support families across the country.” –Sen. Tim Scott [R-S.C.], incoming Chair of Senate Banking Committee
…health care providers are likely to seek more upfront payment. The fraction of consumer cost sharing collected ahead of care by hospitals has recently increased to 23 percent. I anticipate this will increase moving forward. While this could improve price transparency in health care markets, it also may reduce access for those who currently do not pay medical bills. –Benedic N. Ippolito, Senior Fellow, American Enterprise Institute
Thanks to the Biden-Harris administration, no American’s ability to apply for a mortgage or secure a small business loan will be denied because of medical debt. This lifechanging CFPB rule will wipe $49 billion in medical debt from the credit reports of over 15 million Americans, ensuring that hardworking families can save money and build wealth — even in the face of medical emergencies. While Donald Trump and his billionaire Cabinet focus on rigging the economy for their ultra-wealthy special interest backers and threaten to gut the CFPB’s critical protections for millions of Americans, Democrats are fighting every day to help the American people thrive.” –Alex Floyd, Director of DNC Rapid Response
Congress established a detailed framework governing the content of credit reports as set out in the Fair Credit Reporting Act, which does not give the CFPB discretionary authority to determine what should or should not be included in a credit report.” –Dan Smith, President and CEO of the Consumer Data Industry Association
