The Consumer Financial Protection Bureau in recent days has written to four states in support of proposed laws to prohibit credit reporting agencies from including information on medical debt in consumer reports.
In letters to state lawmakers in Washington, Oregon, Massachusetts and North Dakota, the CFPB noted that it recently finalized a rule that bans the inclusion of medical bills on credit reports and prohibits lenders from using medical information in their lending decisions. It said that Colorado and New York state already have bans in place, adding that states “have long been valued and critical partners in establishing and fortifying protections for consumers.”
“Medical debt is categorically different from most types of consumer tradelines that typically appear on consumer reports,” the CFPB said. “Consumers frequently incur medical bills in unique circumstances that differ from other forms of credit extension, and CFPB research has found that medical debt is less predictive of future consumer credit performance than other tradelines.”
The American Bankers Association and other groups raised numerous concerns about the CFPB rule when it was first proposed, saying it would increase credit risk, reduce credit availability for consumers and violates the Administrative Procedure Act.
Rohit Chopra remains CFPB director as President Trump has yet to announce his plans for the bureau. Trump has ordered all federal agencies to pause proposed rulemakings but the CFPB’s medical debt rule was finalized shortly before the president took office.
