CRA-ing a Misguided Rule
The American Financial Services Association joined other trade groups in supporting a Congressional Review Act (CRA) resolution sponsored by Sen. Mike Rounds (R-SD) and Rep. Ralph Norman (R-SC) to overturn the Consumer Financial Protection Bureau’s medical debt rule. While noting that medical debt is a serious concern for many Americans, the joint letter emphasizes that the rule neither addresses the challenges raised by the complex U.S. healthcare system nor eliminates the 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 also notes that the misguided CFPB rule would create new financial strains for medical providers by reducing incentives for consumers to make payments, noting a study that projects that the loss in the first year of the rule for medical providers is estimated to be $24 billion. Further, the rule would limit a lender’s access to crucial information (such as existing debts and repayment history) about a borrower’s ability to repay a loan, leading to increased rates on all borrowers to cover losses and limiting access to credit for some prospective borrowers with less than perfect credit.
March 12th, 2025
