WASHINGTON–Several Republican senators have introduced a Congressional Review Act resolution that seeks to nullify a CFPB rule enacted earlier this year that bans banks and credit unions from including medical debt on credit reports and generally prohibits the use of medical information in credit decisions.
A similar resolution has been introduced in the House.
That CFPB rule was issued on Jan. 7, just ahead of the change in administrations.
S.J. Res 36 was introduced by Sen. Mike Rounds (R-S.D) and is cosponsored by Senate Banking Committee Chairman Sen. Tim Scott, (R-SC). The resolution, filed under the CRA, may be passed by a simple majority in the House and Senate, where the Republicans have the advantage. It would not be subject to a filibuster in the Senate.
‘Beyond Authority’
“The CFPB going beyond their statutory authority to eliminate all medical debt from credit reports is irresponsible and a clear example of regulatory overreach,” Rounds said in a statement. “This rule gives credit card companies a less clear credit picture of who they’re lending money to, which could lead to banks limiting access to capital for consumers.”
According to Rounds, the CFPB rule goes beyond the Bureau’s rulemaking authority by banning practices that were expressly permitted under the Fair Credit Reporting Act, he added.
Rep. Ralph Norman (R-SC) has introduced H.J. Res 74, a companion resolution in the House, which seeks to nullify the rule. The resolution was mentioned during a hearing in the House on Wednesday at which a CU CEO was a witness.
‘Reduced Access’
“Medical debt is a serious challenge for many Americans, but this rule will do nothing to address the underlying issues,” Scott said in a statement. “Instead, it will reduce access to credit and important health care services for those most in need.”
The rule also is the subject of two lawsuits filed against the CFPB, including one in the U.S. District for the Eastern District of Texas in which the Cornerstone Credit Union League is among the plaintiffs. The second suit was also filed in Texas.
