Republican lawmakers in the House of Representatives have raised concern over a proposed rule by the Consumer Financial Protection Bureau (CFPB) that would remove medical bills from consumer credit reports.
In a letter to CFPB Director Rohit Chopra, the lawmakers led by Rep. Patrick McHenry, the chairman of the House Financial Services Committee, warned that the CFPB’s proposed rule “will undermine underwriting processes and increase risk in the financial system, to the detriment of consumers. This effort will have significant negative effects on access and affordability of credit for all consumers, and particularly for low-income borrowers.”
The letter stated medical debt reporting falls under the Fair Credit Reporting Act (FCRA) requirement on credit report accuracy.
“The CFPB does not provide sufficient data in the proposed rule to support its claim that there are more inaccuracies in reporting of medical debt than other types of debt,” the lawmakers said.
The legislators predicted that if the rule went into effect would result in “more consumers approved for mortgages, some of whom will pose default risks hidden from credit underwriters.” On the flip side, the Republicans added that consumers will be “encouraged to take on more medical debt because the consequences of such debt are less salient when they are ignored in underwriting decisions.”
Chopra has advocated for the proposed rule by claiming, “Medical bills on credit reports too often are inaccurate and have little to no predictive value when it comes to repaying other loans.”
;
I was misdiagnosed in November of 2021 at an ER in Tyler, Texas and they didn’t test me for Covid. Since the diagnosis was wrong, my crooked insurance company wouldn’t pay the $10,000 in Medical Bills. Now I am stuck paying a $10,000 medical debt after a horrible experience with the Texas Medical Board and the Texas Department of Insurance. These organizations are nothing but “cheerleaders” for the insurance companies and doctors when they are supposed to be protecting the public! I don’t agree with being responsible for this bill due to the actions of the ER doctor and my previous insurance company. However, I am reluctantly paying the bill to keep my exceptional credit score. I may be forced to sell my house or borrow money at ridiculous interest rates to keep my finances in good shape as I am almost 64 years old and heading into retirement, evidently with surprise medical debt due to the incompetency and fraud committed by my previous insurance company. I am Republican, but I don’t have the kind of healthcare and health insurance provided to members of the senate and the house, both Republican and Democrat. They are getting ready to screw the people that vote for them if they pull this one off.
TJ, I absolutely agree with you!
In reality, the norm is that when there is an amount that the insurance rejects the first time around for whatever reason, the bill goes to the patient automatically. We are the morons who pay for these bills when the insurance company and our service providers need to be doing a better job coding the exact item that we received services for. My elderly mother standard screening that should be covered for her annual checkup costed almost her entire SS income for an entire month! All of our bills after 30 days are sent to the bureau for non-payment where they will sink our credit scores to a horribly 30 to 114 points for one to 3 months while we are attempting to figure out which department is responsible for coding or updating or correcting anything amiss. The insurance system is broken in the United States. Politicians do not even want to answer the questions in the debate, they would prefer to discuss who the worse gulf player is. Since the insurance system is broken, I believe the Republicans’ efforts are being misdirected to attacking the people who are simply attempting to mend things. It is so easy to type a letter justifying by the not-fair-at-ALL, “Fair Credit Reporting Act (FCRA)”. Who wrote this letter? a 6-year-old???? Did they read this letter out loud prior to sending this out??? How vague is this??? “[…] the CFPB’s proposed rule “will undermine underwriting processes and increase risk in the financial system, to the detriment of consumers.” The Honorable Sen. Patrick McHenry has probably never been billed unfairly amounts of money by service provides and had his insurance refuse to pay those bills. While I worked at PRMG, my employer dismissed me even though I had an approved transfer to another branch. My daughter was going on 2-years of age and required all those shots. I ended up owing the employer and the insurance company thousands of dollars, he can look it up if he wants to. I could have moved on to a new job and never paid my crooked employer, but I paid down to the last dime, even though I had a new baby with the expenses that this entails and no job. I do loans for a living, and I must tell you, the number of people I cannot pre-qualify to purchase their first home because of old medical bills. In the end the low-income and the elderly are the ones stuck paying higher rents when they can qualify for all the advantages afforded to first time home buyers and even county grants. One system that is broken needs people willing to fix it. What we have here is the snowball effect, insurance breaks the credit, affects finances, paralyzes minorities, prevents growth and wealth. The poor get poorer, now your credit is crap, no one will rent to you in a decent neighborhood without credit, and no one will hire you…is a vicious cycle! It feels more like financial prison than anything else!
It is my understanding is that once a debtor pays any nominal amount per month on existing medical charges, they cannot prosecute you. Is this correct?
Folks- follow the money. This is directly from a lobby from health insurance companies to go after the CFPB. Having unpaid medical bills is not a direct indicator of your ability to repay an actual loan. Things happen. I was in between insurance companies- and I didn’t qualify for healthcare.gov because I was already hired. I ended up in the ER due to a Kidney infection and the bills piled up. This was out of my control. I have good credit- I pay my bills on time. However- I can’t afford to pay $19,000 to a doctor for just anesthesia. You add on the other “charges” and a 3 day stay in the hospital racked up over $65k. I’m not saying I shouldn’t pay it. I’m saying- having that affect my credit is absolutely ridiculous. I suggest you write to your representative to let them know that you do not wish for them to vote in favor of this.