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Senators ask CFPB to regulate medical debt and credit reporting

Three United States Senators, including Ohio Senator Sherrod Brown urged the Consumer Financial Protection Bureau to look into medical debt collection and reporting practices. The Senators sent a letter to CFPB Director Richard Cordray earlier this month asking the federal agency to address issues in medical debt collection practices and how medical debt issues are scored on consumer credit reports.

The three Senators have already sponsored a bill known as the Medical Debt Responsibility Act. That measure proposes that credit reporting agencies be required to remove medical debts listed on a credit report within 45 days after a medical debt is resolved, either through settlement or payment in full.

The Senators say that medical debts often arise unexpectedly. The way that medical debts are processed causes many consumers strife. The Senators say that often, a patient does not always fully understand when a medical debt is in process through an insurance company, and consumers may not even know of their personal liability before a health provider sends the debt off to a bill collector.

The Senators say that the processes used to collect medical debt, and the credit reporting processes involving such debts, are full of problems. Issues can arise in medical debt collections at the informational and administrative levels, The Senators hope that the CFPB will consider using its regulatory powers to create rules that better protect consumers in the area of medical debt collections.

Source: Inside ARM, "CFPB Asked to Look into Medical Debt Collection and Reporting," Patrick Lunsford, Aug. 6, 2012

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