CFPB shares consumer finance data

Federal Issues CFPB Consumer Finance Medical Debt Overdraft

On June 15, CFPB Deputy Director Zixta Martinez spoke before the Consumer Federation of America’s 2022 Consumer Assembly addressing recent research by the Bureau on payday loans, rent-a-bank schemes, overdraft and other banking fees, medical debt, and credit reporting. In her remarks, Martinez first discussed the Bureau’s report on consumer use of state payday loan extended payment plans, which she noted is “the first significant piece of research into extended payment plans” (covered by InfoBytes here). She assured advocates raising concerns about “rent-a-banks” that the Bureau shares those concerns and is focused on this issue. Turning to overdraft and other banking fees, Martinez described overdraft programs as “more like a maze than a service,” which often result in complicated charges being imposed on families who can least afford them, driving them into deeper debt. She pointed to the Bureau’s desire “to move toward a market that works for families and honest financial institutions alike,” recognizing positive shifts made by big banks towards reducing or eliminating such fees as well as the Bureau’s commitment to “returning vigorous competition to this market." Finally, Martinez addressed medical debt, noting that many of the “approximately 43 million Americans with $88 billion in allegedly unpaid medical bills on their credit reports” are trapped in a “bureaucratic doom-loop comprised of the healthcare, insurance, debt collection, and credit reporting industries.” To address this issue, Martinez explained that the Bureau is working broadly across the government and with the non-profit sector to ensure that medical debt does not impact job security, housing, or qualification for affordable credit, and is considering whether it is appropriate for such debt to be included on credit reports at all.