“We do not want to see the credit reporting system being weaponized to get people to pay bills they may not even owe.” “There really is such high levels of inaccuracy,” Chopra said in an interview with KFF Health News. Medical debts on credit reports are also frequently riddled with errors, according to CFPB analyses of consumer complaints, which the agency found most often cite issues with bills that are the wrong amount, have already been paid, or should be billed to someone else. But the agency found that medical debt is typically a poor predictor of whether someone is likely to pay off other bills and loans. “The fact that the CFPB is involved in what seems like a health care issue is because our system is so dysfunctional that when people get sick and they can’t afford all their medical bills, even with insurance, it ends up affecting every aspect of their financial lives,” said Chi Chi Wu, a senior attorney at the National Consumer Law Center.ĬFPB researchers documented that unpaid medical bills were historically the most common form of debt on consumers’ credit reports, representing more than half of all debts on these reports. Supreme Court is considering a broader legal challenge to the agency’s funding that some conservative critics and financial industry officials hope will lead to the dissolution of the agency.īut CFPB’s defenders say its move to address medical debt simply reflects the scale of a crisis that now touches some 100 million Americans and that a divided Congress seems unlikely to address soon. ACA International has suggested collectors could go to court to fight any rules barring medical debt from credit reports.Īt the same time, the U.S. ![]() Subscribe to KFF Health News' free Morning Briefing.īrown and others question whether the agency has gone too far on medical billing. “There’s some concern with a financial regulator coming in and saying, ‘Oh, we’re going to sweep this problem under the rug so that people can’t see that there’s this medical debt out there,’” said Jack Brown III, a longtime collector and member of the industry trade group ACA International. The CFPB’s turn toward medical debt has stirred opposition from collection industry officials, who say the agency’s efforts are misguided. “American families should not have their financial lives ruined by medical bills,” Chopra continued. ![]() “Everywhere we travel, we hear about individuals who are just trying to get by when it comes to medical bills,” said Rohit Chopra, the director of the CFPB whom President Joe Biden tapped to head the watchdog agency in 2021. Those rules are expected to be unveiled later this year. In its most ambitious move to date, the agency is developing rules to bar medical debt from consumer credit reports, a sweeping change that could make it easier for Americans burdened by medical debt to rent a home, buy a car, even get a job. In the past two years, the CFPB has penalized medical debt collectors, issued stern warnings to health care providers and lenders that target patients, and published reams of reports on how the health care system is undermining the financial security of Americans.
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