Consumer complaint received 2025-03-20 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Problem with a company's investigation into an existing problem — Their investigation did not fix an error on your report
Company: Bread Financial Holdings, Inc.
State: MO

Complaint narrative:
CFPB Finalizes Rule to Remove Medical Bills from Credit Reports English Espaol Final rule will remove billions of dollars of medical bills from credit reports and end coercive debt collection practices that weaponize the credit reporting system XX/XX/XXXX SHARE & PRINT WASHINGTON, XXXX Today, the Consumer Financial Protection Bureau ( CFPB ) finalized a rule that will remove an estimated {$49.00} XXXX in medical bills from the credit reports of about XXXX XXXX Americans. The CFPBs action will ban the inclusion of medical bills on credit reports used by lenders and prohibit lenders from using medical information in their lending decisions. The rule will increase privacy protections and prevent debt XXXX from using the credit reporting system to coerce people to pay bills they dont owe. The CFPB has found that medical debts provide little predictive value to lenders about borrowers ability to repay other debts, and consumers frequently report receiving inaccurate bills or being asked to pay bills that should have been covered by insurance or financial assistance programs. 

People who get sick shouldnt have their financial future upended, said CFPB XXXX XXXX XXXX. The CFPBs final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.

The CFPBs research reveals that a medical bill on a persons credit report is a poor predictor of whether they will repay a loan, and contributes to thousands of denied applications on mortgages that consumers would be able to repay. The CFPB expects the rule will lead to the approval of approximately XXXX additional, affordable mortgages every year and that Americans with medical debt on their credit reports could see their credit scores rise by an average of XXXX points. 

The CFPBs action follows changes made by the XXXX XXXX XXXX XXXX XXXX XXXX, XXXX, and XXXX who announced that they would take certain types of medical debt off of credit reports, including collections under {$500.00}, after the CFPB raised concerns about medical debt credit reporting in early XXXX. Additionally, FICO and VantageScore, the two major credit scoring companies, announced they have decreased the degree to which medical bills impact a consumers score. 

The CFPBs final rule brings regulations in line with Congresss decision to safeguard consumers privacy by restricting lenders from obtaining or using medical information, including information about medical debts. Federal financial regulators later created an exception to this restriction, allowing creditors to consider medical debts. This carveout has enabled debt collectors to use the credit reporting system to coerce payments from patients for inaccurate or false medical bills.

The CFPBs new rule amends Regulation V, which implements the Fair Credit Reporting Act ( FCRA ), to end this exception and establish guardrails for credit reporting companies, prohibiting them from including medical bills on credit reports sent to lenders, who are banned from considering them. The final rule : Prohibits lenders from considering medical information : The rule ends the special regulatory carveout that previously allowed creditors to use certain medical information in making lending decisions. This means lenders will also be barred from using information about medical devices, such as prosthetic limbs, that could be used to require that the devices serve as collateral for a loan for the purposes of repossession. 
Bans medical bills on credit reports : The rule bans consumer reporting agencies from including medical debt information on credit reports and credit scores sent to lenders. This will help end the practice of using the credit reporting system to coerce payment of bills regardless of their accuracy. Lenders will continue to be able to consider medical information to verify medical-based forbearances, verify medical expenses that a consumer needs a loan to pay, consider certain benefits as income when underwriting, and other legitimate uses. 
Todays rule advances the CFPBs work to protect consumers from harms from medical debt and coercive debt collection practices. In XXXX, the CFPB issued guidance clarifying that debt collectors violate federal law when they collect on inaccurate or legally invalid medical debts. Previously, the CFPB published in XXXX a report describing the extensive and debilitating effects of medical debt along with a bulletin on the No Surprises Act to remind credit reporting companies and debt collectors of their legal responsibilities under that legislation.

The rule will be effective 60 days after publication in the Federal Register.

Read the CFPBs notice to the final rule, Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information ( Regulation V ). 

Read the Unofficial Redline of the Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information ( Regulation V ). 

Learn more about XXXX XXXX XXXX and the CFPBs work on medical debt. 

Consumers can submit complaints about financial products or services by visiting the CFPBs website or by calling ( XXXX ) XXXX ( XXXX ). 
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Commenity Bank fails to remove medical debt from the consumer report Commenity lied to The CFPB, to their own employees and to the consumer blaming the debt collector for the matter. 
Commenity Bank also made false statements to The CFPB that they investigated the matter when it is clear that they did not Commenity Bank also made false statements to the Credit Reporting agencies giving them the illusion that the alleged debt it not medical debt There is no law that requires Commenity Bank to report anything on a credit report Commenity Bank sold the alleged debt to a debt collector two year ago for a profit

Company response to consumer: Closed with non-monetary relief