The American Financial Services Association, along with other trade groups, has expressed support for a Congressional Review Act (CRA) resolution aimed at overturning the Consumer Financial Protection Bureau’s (CFPB) medical debt rule. The resolution is sponsored by Senator Mike Rounds of South Dakota and Representative Ralph Norman of South Carolina.
In a joint letter, the trade groups acknowledged that medical debt is a significant issue for many Americans but argued that the CFPB's rule does not address the complexities of the U.S. healthcare system or eliminate medical debt. The letter states:
“[W]e believe that the rule will have unintended consequences that could undermine access to credit and essential healthcare services. The rule, which prohibits consumer reporting agencies from including information about medical debt on credit reports and prohibit creditors from considering the information when making a credit decision, will undermine credit markets and limit access to affordable care especially in rural communities. The rule is also blatantly illegal, as it directly contradicts the carefully crafted statutory framework that Congress enacted as part of the Fair Credit Reporting Act.”
The letter further argues that the CFPB's rule would impose new financial burdens on medical providers by reducing consumers' incentives to make payments. It cites a study estimating that in its first year, the rule could result in a $24 billion loss for medical providers. Additionally, it claims that restricting lenders' access to critical information about borrowers' existing debts and repayment history could lead to higher rates for all borrowers and reduced credit access for those with less-than-perfect credit.