I 

109TH CONGRESS 

1ST SESSION H. R. 1238 

To express the sense of the Congress with respect to the price and terms 

of credit used to pay large medical bills, to amend the Truth in Lending 

Act with respect to credit card issuers obligations for credit extended 

to pay medical expenses under certain circumstances, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 10, 2005 

Mr. HASTINGS of Florida (for himself, Ms. SLAUGHTER, Mr. SANDERS, Mr. 

OWENS, Mr. STARK, Mr. CUMMINGS, Ms. WASSERMAN SCHULTZ, Mrs. 

CHRISTENSEN, Mr. LEWIS of Georgia, Mr. CONYERS, Ms. JACKSON-LEE

of Texas, Mr. BUTTERFIELD, Mr. MEEK of Florida, Ms. NORTON, Mr. 

WEXLER, Mr. CLAY, Mr. MICHAUD, and Mr. PAYNE) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To express the sense of the Congress with respect to the 

price and terms of credit used to pay large medical 

bills, to amend the Truth in Lending Act with respect 

to credit card issuers obligations for credit extended to 

pay medical expenses under certain circumstances, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Medical Bills Interest 

3 Rate Relief Act’’. 

4 SEC. 2. FINDINGS; SENSE OF THE CONGRESS. 

5 (a) FINDINGS.—The Congress finds as follows: 

6 (1) Many families and individuals are forced 

7 deep into debt by the combination of large medical 

8 bills and excessively high interest rates. 

9 (2) The policy journal Health Affairs reports 

10 that illness and medical bills cause half of all bank11 ruptcies. 

12 (3) The same report notes that over 2 million 

13 Americans are financially ruined by medical care 

14 costs each year. 

15 (4) Consumers whose debt consists largely of 

16 credit extended to pay medical expenses are 42 per17 cent more likely than other debtors to experience 

18 lapses in coverage. 

19 (5) Many of those forced into bankruptcy by 

20 medical expenses are middle class and have health 

21 insurance. 

22 (6) Major credit card issuers tie credit card in23 terest rates to credit records and credit scores. 

24 (7) However, previously unforeseen and burden25 some medical expenses may arise whereby the hos-
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1 pital-mandated schedule of payment is more than 

2 the individual can immediately afford. 

3 (8) Hospitals often report late- or delinquent4 payers to consumer reporting agencies thereby di5 rectly affecting the rates, terms, and availability of 

6 credit from other sources that might otherwise be 

7 used to pay the medical expenses. 

8 (9) Many individuals and families are forced to 

9 place large medical expenses on their credit cards 

10 over time. 

11 (10) Credit card issuers are able to raise inter12 est rates on late- and delinquent-payers with impu13 nity and without regards to the nature of the delin14 quency. 

15 (11) There currently exists no government-en16 forced ceiling cap on credit card interest rates. 

17 (b) PURPOSE.—The purpose of this Act is to stem 

18 the loss from rising instances of payment delinquencies 

19 and bankruptcies so that people who meet their bill pay20 ment requirements on time and in full receive the lowest 

21 interest rates. 

22 (c) SENSE OF THE CONGRESS.—It is the sense of the 

23 Congress that— 

24 (1) no American family or individual should be 

25 forced to choose between the health and life of a 
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1 loved one and the financial constraints of medical 

2 care; 

3 (2) financial institutions, including credit card 

4 issuers, should not take financial advantage of un5 foreseen, nonpreventive, or catastrophic medical situ6 ations; and 

7 (3) individuals or families saddled with large 

8 medical bills should receive a fair and equitable cred9 it rating that disregards off-schedule medical bill 

10 payments. 

11 SEC. 3. CREDIT CARD ISSUERS OBLIGATIONS FOR CREDIT 

12 EXTENDED TO PAY MEDICAL EXPENSES. 

13 Section 127 of the Truth in Lending Act (15 U.S.C. 

14 1637) is amended by adding at the end the following new 

15 subsection: 

16 ‘‘(h) CREDIT CARD ISSUERS OBLIGATIONS FOR

17 CREDIT EXTENDED TO PAY MEDICAL EXPENSES.— 

18 ‘‘(1) IN GENERAL.—If, with respect to a credit 

19 card account under an open end consumer credit 

20 plan, the consumer notifies the credit card issuer of 

21 anticipated, any upcoming medical expense to be in22 curred by the consumer, or a member of the con23 sumer’s household, within 30 days of the date of the 

24 expense— 
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1 ‘‘(A) the annual percentage rate on credit 

2 extended under the plan to pay such medical 

3 expenses shall not exceed the annual percentage 

4 rate in effect for any outstanding balance of the 

5 consumer under the plan at the time such no6 tice is given; and 

7 ‘‘(B) the annual percentage rate extended 

8 under the plan to pay nonmedical expenses may 

9 not be increased on the basis of, or due to, the 

10 extension of credit to pay such medical ex11 penses. 

12 ‘‘(2) MEDICAL EXPENSES.—For purposes of 

13 this subsection, the term ‘medical expenses’ includes 

14 necessary treatments, drugs, tests, hospital stays, 

15 and expenses, doctor fees, and elective surgeries.’’. 

16 SEC. 4. CREDIT HISTORY REPORTING REQUIREMENT IN 

17 CASE OF CERTAIN MEDICAL EXPENSES. 

18 Section 623 of the Fair Credit Reporting Act (15 

19 U.S.C. 1681s–2) is amended by adding at the end the fol20 lowing new subsection: 

21 ‘‘(f) REPORTS FURNISHED BY HOSPITALS.— 

22 ‘‘(1) IN GENERAL.—If a consumer, who is un23 able to make full payments for medical expenses (as 

24 defined in section 127(h)(2)) to a hospital or other 

25 medical treatment facility in accordance with a 
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1 schedule of payments imposed by such hospital or 

2 facility, continues, in good faith, to make partial 

3 payments on the outstanding balance on the pre4 scribed due dates under such schedule, the hospital 

5 or facility may not submit negative information re6 lating to the failure of such consumer to maintain 

7 the payment schedule in full during the 5-year pe8 riod beginning when the consumer first fails to make 

9 full payment under the payment schedule. 

10 ‘‘(2) GOOD FAITH PARTIAL PAYMENT.—For 

11 purposes of paragraph (1), a consumer shall be 

12 deemed to be making partial payments in good faith 

13 on the prescribed due dates if the consumer is pay14 ing at least 20 percent of the amount of the sched15 uled payment for each due date.’’. 

16 SEC. 5. EFFECTIVE DATE. 

17 This Act and the amendments made by this Act shall 

18 take effect on January 1, 2006. 

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