Banning medical debt from credit reports
July 27, 2024
There is no such thing as "fun for the whole family." Jerry Seinfeld
President Obama and Elizabeth Warren set up the Consumer Financial Protection Bureau (CFPB) in 2011. The bureau was established as an “independent agency.” Big mistake and no oversight by Congress. The agency now has 1500 employees and an operating budget of $600 million.
The CFPB’s new proposal is to ban lenders from using medical debt on credit reports. Credit rating agencies would be banned from showing a consumer’s total debt. Of course, this would allow high risk borrowers to borrow more, perhaps a new car or a home mortgage.
According to the CFPB, medical debt contained in credit reports equals about $88 billion. So, the CFPB wants it hidden. Where’s the transparency? And what about the incentive to pay medical bills.? If medical debt doesn’t count on a credit report, people won’t pay, and what happens to the doctors and hospitals that provided services? How will they recover those costs? Higher billing rates for others, closing facilities? UGH!
The sub-prime mortgage disaster of 2007-2008 started the same way. lower the standards for loan qualifications, give people more credit and watch the unqualified borrow more $$$$’s and then default on those loans. Nobody wins.
The CFPB is wrong about medical debt.
High Truths and Low Lies 