On August 14, GOP members of the House Financial Services Committee sent a letter to CFPB Director Rohit Chopra voicing concerns about the CFPB’s proposed rule to ban the use of medical information for credit eligibility determinations. As previously covered by InfoBytes, the CFPB’s proposed rule would amend the FCRA to remove the medical financial information exception thus limiting the credit reporting of medical debt. In their letter, the GOP Congress members argued the CFPB’s proposal would weaken the accuracy and completeness of consumer credit reports, increasing risk in the financial system and causing negative effects on the availability of credit.

The letter noted that in the 50 years since the FCRA was enacted, creditors have been allowed to use medical debt information to determine credit eligibility. The letter noted that, in 2003, Congress acknowledged that medical debt information was “beneficial to understanding the full picture” of a consumer’s financial situation when enacting privacy protections for the use of such information. GOP members suggested that the proposed rule may be supported by current political biases, pointing out that the CFPB has had the authority to amend Regulation V, which permits creditors to use medical information for over a decade but only now seeks to prohibit the inclusion of medical debt on credit reports.

In their primary argument opposing the proposed rule, GOP members stated the CFPB did not provide sufficient data to support the claim that there were more inaccuracies in reporting medical debt than other types of debt. They also argued that the existence of some inaccuracies in medical debt reporting should not prevent creditors from knowing the debt burden of potential borrowers, particularly considering available dispute processes under the FCRA. Additionally, the members argued that the CFPB failed to provide evidence that medical debt information was insufficiently predictive to justify exclusion from credit reports.

Finally, the members argued that the proposed rule might have unintended consequences, such as making it more difficult for borrowers, especially low-income borrowers, to obtain credit and to increase the cost medical procedures to compensate providers for increased difficulty in collecting on medical debt.