CFPB Focuses on High-Cost Medical Payment Products
The CFPB warned that "high-cost specialty financial products" are being pushed onto consumers who cannot afford the payments or who should qualify for financial assistance. The CFPB reported it will examine how financial institutions market these products to healthcare providers.
In a blog post, the CFPB said financial institutions market these payment products as a means to receive payments "faster and more easily" than they would from insurance. The CFPB said its investigation revealed that medical payment products, such as medical credit cards and installment loans, may increase financial burden on consumers. According to the CFPB, these products may have interest rates exceeding 25 percent, making them more expensive than other payment methods. The CFPB also reported that people were offered medical payment products by some financial institutions when incapacitated and unable to make informed decisions.
The CFPB said that it will work closely with the US Departments of Health and Human Services and Treasury to monitor and regulate these practices to safeguard consumers from financial harm.
The CFPB encouraged (i) healthcare providers to share their experiences with these products and (ii) consumers, who have experienced problems, to submit complaints.
Commentary
This marks the latest foray by the CFPB into the health care sector. Last week, the CFPB issued a proposed rule to remove medical bills from many credit reports. Last year, the CFPB, together with other federal agencies, launched an inquiry into medical payment products, with the recognition that "financial institutions are increasingly involved in the American health care system," and with many medical procedures now being financed by Buy Now, Pay Later ("BNPL") loans, medical credit cards and other medical loans offered in conjunction with health care providers and facilities.
The CFPB's blog post signals the agency's continuing concern with the offering and terms of these products, and on issues at the intersection of health care and finance. (The CFPB previously stated that health care financial products "increasingly resemble[] longstanding trends in higher education, where there have been serious abuses in lending and financial products, particularly where colleges and universities steered or preferenced particular products.") Expect the agency to be aggressive as it attempts to ensure that health care financial products do not follow the same path.