U.S. Rep. Byron Donalds says the CFPB’s pending rule on credit reporting and medical debt has unintended consequences that lack proper review and would lead to more upfront costs required by health care providers.
05/20/2024 1:45 P.M.
2 minute read
In an opinion piece for The Washington Examiner, U.S. Rep. Byron Donalds, R-Fla., speaks out on the “misguided solutions” federal regulators, including the Consumer Financial Protection Bureau, are proposing to help consumers and businesses who are grappling with economic challenges.
“Instead of directing its unlimited funding and ever-growing staff—both of which result from its single, unelected director structure—toward critical solutions to the financial woes plaguing Americans, CFPB is trying to regulate these challenges away,” Donalds, who serves on the House Financial Services Committee and House Committee on Oversight and Reform, writes in the piece, “Band-Aids, Botox, and Broken Bones: CFPB Wants You to Pay for Other People’s Medical Bills.”
Donalds focused on the bureau’s pending rulemaking on the Fair Credit Reporting Act and medical debt collections.
“This rewrite of the Fair Credit Reporting Act—a law that was passed by and can only be revised by Congress—proposes to eliminate all credit reporting of medical debt,” Donalds writes. “The CFPB is also considering disallowing lenders from taking into account owed medical debt when underwriting loans.”
The unintended consequences and details on prohibiting medical debt credit reporting that the CFPB has not finalized present more issues than the benefits the proposal could have for consumers, he explains.
“As someone with a background in the financial services industry, I can tell you that operating with incomplete information carries significant negative repercussions,” Donalds said. “If a bank, credit union, or other lender does not know that a specific consumer owes medical debt, or if that debt is not reflected in their credit score, they might unwittingly approve a car loan that the consumer genuinely cannot afford. Hiding this medical debt from a credit score does not make it go away. Concealing medical debt from a credit score does not erase its existence; it remains legally owed and could lead to legal action.”
Further, there would be an impact on medical costs.
“Under this rule medical providers will find themselves at the back of the line for payment,” Donalds concludes in the article. “This will lead to more upfront costs for copays at medical facilities such as hospitals, urgent cares, and emergency rooms. It might even prompt some consumers to reconsider the value of medical insurance altogether.”
Read Donalds’ complete piece here.
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