On April 11, the CFPB stated in a court filing that it plans to revoke its advisory opinion on medical debt collection from October 1, 2024. The filing was a motion to the U.S. District Court for the District of Columbia and seeks to pause proceedings while the CFPB plans to revoke its advisory opinion. The CFPB proposed to update the court on its progress toward revoking the opinion by July 14 and every 30 days thereafter.
As previously covered by InfoBytes, the CFPB released an advisory opinion to remind debt collectors to comply with the FDCPA and Regulation F when collecting medical debts. The advisory opinion was met with multiple lawsuits (covered here and here). The CFPB’s revocation of the advisory opinion will render the plaintiff’s issues moot. The filing noted that courts have “broad discretion to stay proceedings,” and the parties argued that this course of action is appropriate given the circumstances. Separately, last month, Sen. Rounds (R-SD) and Rep. Ralph Norman (R-SC) each introduced a resolution (S.J. Res. 36 and H.J. Res. 74, respectively) to disapprove the rule under the Congressional Review Act.
On April 14, the CFPB filed a status report in a similar case on medical debt with similar issues brought against the Bureau as defendant against its medical debt final rule. The final rule would prohibit creditors from considering medical information in credit eligibility determinations, as opposed to the advisory opinion on the same topic. The status report stated the CFPB was “still evaluating its position with respect to the rule at issue in this action.” The same plaintiff, a trade group representing debt collection agencies, had filed this case in the U.S. District Court for the Southern District of Texas. The CFPB stated that it will provide another status report to the district court on or before May 14.
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