The Consumer Financial Protection Bureau, created after the Great Recession of 2007-09, has increasingly started policing the health care system.
When President Barack Obama signed legislation in 2010 to create the Consumer Financial Protection Bureau, he said the new agency had one priority: “looking out for people, not big banks, not lenders, not investment houses.”
Since then, the CFPB has done its share of policing mortgage brokers, student loan companies, and banks. But as the U.S. health care system turns tens of millions of Americans into debtors, this financial watchdog is increasingly working to protect beleaguered patients, adding hospitals, nursing homes, and patient financing companies to the list of institutions that regulators are probing.
In the past two years, the CFPB has penalized medical debt collectors, issued stern warnings to health care providers and lenders that target patients, and published reams of reports on how the health care system is undermining the financial security of Americans.
In its most ambitious move to date, the agency is developing rules to bar medical debt from consumer credit reports, a sweeping change that could make it easier for Americans burdened by medical debt to rent a home, buy a car, even get a job. Those rules are expected to be unveiled later this year.
“Everywhere we travel, we hear about individuals who are just trying to get by when it comes to medical bills,” said Rohit Chopra, the director of the CFPB whom President Joe Biden tapped to head the watchdog agency in 2021.
“American families should not have their financial lives ruined by medical bills,” Chopra continued.
The CFPB’s turn toward medical debt has stirred opposition from collection industry officials, who say the agency’s efforts are misguided. “There’s some concern with a financial regulator coming in and saying, ‘Oh, we’re going to sweep this problem under the rug so that people can’t see that there’s this medical debt out there,'” said Jack Brown III, a longtime collector and member of the industry trade group ACA International.
Brown and others question whether the agency has gone too far on medical billing. ACA International has suggested collectors could go to court to fight any rules barring medical debt from credit reports.
At the same time, the U.
