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USA: CFPB requests comments amending FCRA regarding medical debt information

On June 11, 2024, the Consumer Financial Protection Bureau (CFPB) requested public comments on a proposed rule on Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information (Regulation V). In particular, the CFPB sought comments on a proposed rule amending Regulation V which implements the Fair Credit Reporting Act (FCRA) which would remove an exception from Regulation V on the limitation in the FCRA on creditors obtaining or using information on medical debts for credit eligibility determinations.

What are the main provisions of the proposed rule?

The proposed rule seeks to provide that a consumer reporting agency may not furnish a consumer report containing information on medical debt to a creditor that the creditor is prohibited from using. Specifically, the proposed rule would amend Regulation V to:

  • remove the financial information exception which broadly permits creditors to obtain and use medical information (including information about medical debt) in connection with credit eligibility determinations, while retaining select elements of the exception related to income, benefits, and loan purpose; and
  • limit the circumstances under which consumer reporting agencies are permitted to furnish medical debt information to creditors in connection with credit eligibility determinations.

The CFPB clarified that medical information related to medical debt includes repayment terms, repayment history, and similar information regarding medical debts to calculate, measure, or verify the repayment ability of the consumer, the use of proceeds, or terms for granting credit. The proposed rule, by eliminating the financial information exception, would prohibit creditors from considering, in connection with credit eligibility determinations, such financial information, unless another exception applies.

What is medical debt information?

'Medical Debt Information' would be defined, under the proposed rule, as a subset of 'Medical Information' under Regulation V, with the new definition including Medical Information related to debts in any status (current, past due, or fully paid) that are:

  • owed by a consumer;
  • owed to a person whose primary business is providing medical services, products, or devices, or to such person's agent or assignee, including debts purchased by a debt buyer or collected by a debt collector; and
  • incurred from the provision of such medical services, products, or devices for humans, including all human medical procedures, such as elective surgeries.

Public comments may be submitted until August 12, 2024.

You can read the press release here and the proposed rule here.