Fighting Back Against Medical Debt
Consumer Bureau takes steps to protect patients from wrecked credit
You get sick or have a medical emergency.
Whether or not you have insurance, this can be costly.
Let’s be clear: It’s morally wrong that you can end up in debt just because you got sick.
But in the system we have, that’s the reality.
What’s even more devastating is when medical debt also wreaks havoc on your credit - which can impact your ability to find housing or even get a job.
Now, the Consumer Financial Protection Bureau (CFPB) is taking steps to eliminate all medical debt from credit reports.
“Research shows that medical bills have little predictive value in credit decisions, yet tens of millions of American households are dealing with medical debt on their credit reports,” said CFPB Director Rohit Chopra. “When someone gets sick, they should be able to focus on getting better, rather than fighting debt collectors trying to extort them into paying bills they may not even owe.”
Previously, the CFPB worked to eliminate medical debt that was less than $500 from credit reports. However, more than 50% of Americans with medical debt owe more than $500.
Trickery: How Credit Agencies Sell You Services You Don't Need
If you’ve ever been tempted to purchase a credit monitoring service from one of the three major credit bureaus, don’t. If you already have this service, chances are the company that sold it used something called “digital dark patterns” to lure you into the purchase.
“Negative credit reporting is one of the biggest pain points for patients with medical debt,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “When we hear from consumers about medical debt, they often talk about the devastating consequences that bad credit from medical debts has had on their financial lives. A bad credit score doesn’t just affect your ability to get credit, but also your employment prospects, insurance rates, and ability to get rental housing."
Until we have a Medicare for All system that ensures that no one goes into debt when they get sick, we should at least take steps to minimize the negative impacts of medical debt on people’s lives.
RELATED: A Warning on Medical Credit Cards
Payday Loan Industry Seeks to Take Down Top Regulator
While the CFPB is taking action to curb the negative impact of payday predators, payday loan store operators are trying to defang the federal regulator.
A case before the U.S. Supreme Court could undo the current funding system for the CFPB and weaken its ability to be an advocate for consumers.
One advocate explains:
Consumer groups say an independent agency free of political funding restraints is essential to ensure consumers get a fair shake.
In highlighting the importance of the decision, Nadine Chabrier, Senior Policy Counsel, Center for Responsible Lending said:
“The decision could not only invalidate an important protection against predatory lending, but could also undermine the CFPB ability to enforce the law through its enforcement powers. CFPB has won $17.5 million in restitution or canceled debts for 200 million people. These actions assisted homeowners who were defrauded by their lenders, depositors forced to pay illegal overdraft fees, borrowers facing racial discrimination, and people with inaccurate information on their credit reports.”
Biden delivering for all people, that is what a great President does, Thank you! 💙