CFPB Issues Report Highlighting Risks Of Medical Financing

On May 4, 2023, the CFPB issued a report titled Medical Credit Cards and Financing Plans (the "Report") that summarized the new developments in medical financing and the associated risks with these products. The Report complements the CFPB's April 26, 2023 report that analyzed a sample of final medical collection tradelines from 2012-2020 to study whether the removal of some medical collections from the credit reports of consumers impacts the availability of credit.

The CFPB noted that approximately 50% of U.S. adults have difficulty in paying for medical care and that out of pocket medical costs have increased for both insured and non-insured patients steadily over the years. As a result of this increase in cost, the CFPB noted that financial institutions have marketed products such as medical credit cards and installment loans, which previously mainly were used for elective procedures, to healthcare providers and encouraged those providers to promote the