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ICBA told the Consumer Financial Protection Bureau that its proposed rule to remove medical debt information from credit reporting will lead to inaccurate reports and hinder community banks’ ability to comply with other regulations.
Background: The CFPB is proposing to amend Fair Credit Reporting Act regulations by prohibiting creditors from using medical financial information and by limiting the circumstances under which consumer reporting agencies are permitted to provide medical debt information to creditors.
ICBA View:
The CFPB does not have the statutory discretion to eliminate the use of all medical debt from consumer reports.
While the CFPB justifies the proposal by citing concern for accurate credit reports, the proposal would in fact increase the inaccuracy of credit reports by mandating the removal of accurate information.
The proposal would hinder community bank efforts to comply with other regulatory requirements, such as determining a consumer’s debt-to-income ratio or assessing a borrower’s ability to repay.
Past Advocacy: ICBA has repeatedly opposed efforts that limit the value of credit scores and requested a 30-day extension of the comment period on the CFPB’s medical debt proposal.