Shiny New Trump CFPB Protects Financial Scams From YOU!
Should medical debt keep you from ever owning a home? CFPB says probably yeah!
It’s no secret that the Trump administration wants to shut down the Consumer Financial Protection Bureau — the agency tasked with protecting American consumers from being screwed over by their dearest friends. But while it still stands, it seems they’re going to take Elizabeth Warren’s baby and use it to kill as many consumer protections as they can manage.
As millions of US citizens are on the brink of seeing their health insurance premiums double, triple, and in some cases go up more than $20,000 a year, the CFPB has announced its intention to bar states from taking medical debt off of people’s credit history — a measure meant to make it so people’s entire lives aren’t destroyed because their health insurance company figured out how to get out of covering necessary medical care and they ended up with a ridiculous surprise bill. Or because they charged them for a service that wasn’t even delivered (a practice known as “upcoding” that the Trump CFPB announced earlier this year they would no longer require medical debt collectors to check for).
While a Texas judge managed to undo the Biden-era rule that would have wiped medical debt from every American’s credit report earlier this year (which, of course, went unchallenged by the Trump administration), 15 states — California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Minnesota, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington — have implemented their own laws.
The CFPB is arguing that federal law overrides state law in matters of credit reporting, because it’s just real important that we all use the same system. This is the same argument being put forth by industry groups that are currently fighting the laws in these 15 states.
According to one survey by the Kaiser Family Foundation, 41 percent of Americans have some amount of medical debt. Fourteen percent owe $1000 or more. Unlike other forms of debt, medical debt isn’t really a good indicator that someone is a credit risk.
For instance, you know all those mass shootings we have because Republicans won’t let us have sane gun control laws like every other country on earth? Well, for those who get shot but survive, the average victim ends up with $65,000 in medical bills. $30,000 in the first year. Now throw in the fact that a whole lot of these people probably can’t work for a while, and you tell me if it’s fair that they would be unable to buy a home, sign a lease, or even get a credit card because of that?
There’s a slight difference between buying a yacht you can’t afford and never paying it off and getting cancer or being a crime victim or your kid having a terrible accident in a rural area where all the hospitals have closed thanks to Republican policies, and only being able to get them to the hospital by means of a $25,000 air ambulance ride that wasn’t covered by your insurance. Something horrific happening to you over which you have no control doesn’t mean you cannot pay a mortgage, which is why the rule was issued in the first place.
This was not the only way the Trump CFPB attacked consumers this week. They also announced that they would not be following through with the Biden-era rule to require non-bank financial institutions like debt collectors, mortgage and payday lenders, and credit reporting companies to report any actions taken against them for violating consumer laws by local, state, or federal governments, for the purpose of creating a registry available to consumers. Why? Because they felt that the benefit to consumers was vastly outweighed by the cost to those institutions — which was about $360.
On the darkly ironic “bright side,” because of the Supreme Court’s terrible decision in Loper Bright Enterprises v. Raimondo, federal agencies like the CFPB no longer have the authority to interpret the law as it applies to the the sector they are overseeing. So, as of right now, this is only “guidance” from an agency the administration is eager to dismantle and no one has to immediately reverse course, but that could certainly be coming next.
PREVIOUSLY ON WONKETTE!
Keep in kind the CFPB has been WILDLY popular. If course they want that gone
God, if you really hate the money and the money changers, in your infinite wisdom, smite them with diseased lab monkeys on the run.