McHenry Says CFPB Proposal Would ‘Severely Impair’ Credit Report Accuracy

House Financial Services Committee (HFSC) Chairman Patrick McHenry, R-N.C., condemned a proposed rule announced Tuesday (June 11) by the Consumer Financial Protection Bureau (CFPB), saying it would upend the American credit and healthcare systems.

McHenry’s statement came in response to the CFPB’s announcement that with its proposed rule, it seeks to ban medical bills from credit reports.

In his statement, McHenry said the proposed rule would “severely impair” the accuracy and completeness of credit reports and thereby raise the cost and reduce the availability of credit for all Americans.

“The CFPB pursuing a full prohibition of medical debt on credit reports will have a negative impact on our credit and healthcare systems,” McHenry said in the statement. “It is badly misguided to remove consequences for consumers who do not pay a debt by wiping out an entire category of debt from credit reports. The CFPB’s regulatory overreach will harm the very consumers the agency was created to protect.”

When announcing the proposed rule, the CFPB said in a press release that it would stop credit reporting companies from sharing medical debts with lenders and would prohibit lenders from using medical information to make lending decisions.

It added that the agency has found that medical debts provide less predictive value to lenders than other debts on credit reports and that medical bills accounted for $88 billion of reported debts on credit reports.

“Medical bills on credit reports too often are inaccurate and have little to no predictive value when it comes to repaying other loans,” CFPB Director Rohit Chopra said in the release.

The CFPB began this rulemaking process in September, saying that removing medical bills from Americans’ credit reports would provide financial relief to families dealing with medical crises, prevent debt collectors from pressuring individuals into paying potentially inaccurate bills, and ensure that creditors do not rely on flawed and unreliable data.

McHenry’s statement on this proposed rule comes about a month after he said, “Republicans will continue the fight to rein in the rogue CFPB,” and urged the House to immediately take up the CFPB Transparency and Accountability Reform Act.

“It’s past time the CFPB is held accountable to the American people through their elected representatives,” McHenry said in a May 16 statement.