Latest news with #CFPB
Forbes
2 hours ago
- Business
- Forbes
Why Are Conservatives Telling Businesses What They Can Charge?
Information Technology Abstract Concept There's no such thing as a 'free lunch.' Unoriginal, trite, simplistic, and most of all, obvious? Yes on all four. But sometimes the obvious requires stating. Consider the outcry among conservatives over the decision to remove Rule 1033 from the much commented on GENIUS Act. While the Trump administration is known to very much dislike Rule 1033, former Consumer Financial Protection Bureau (CFPB) head Rohit Chopra was a big fan of it. Which should have conservatives wondering why conservatives support what Chopra did. For background, Rule 1033 states that financial institutions (think large banks) must provide their customers secure access to their financial data, transactions, account balances, and other information. The Rule reads as a tad superfluous in consideration of the happy truth that banks would go to the expense to compile and provide this information either way, but nonetheless. What's important is that in possessing direct access to their own financial information, customers of financial institutions have not only had their own crucial information at their fingertips, they've been able to pass the information on to other financial services providers. Crucial here is that they've been free to do so of their own accord, and with an eye on securing the help of financial service providers operating outside the banks and other financial institutions compiling the information. Where it becomes interesting and puzzling at the same time is that Rule 1033, beyond mandating that big banks provide the information to their customers, also mandated that the banks not charge a fee to outside financial service providers accessing the data. Which brings us back to the outcry mentioned up top, and the rather unoriginal mention of the old as economics truth that there's no free lunch. Thought of in terms of the banks and financial institutions that compile consumer data in highly secure fashion, there's a cost associated with doing so. And with costs in mind, the compilers of the information have understandably and ethically begun charging outside financial service providers for accessing the information. What's happening is understandable simply because there are once again costs associated with compiling the data. Banks have a right to profit, no? As for the ethical aspects of charging for the data, banks have shareholders whom they serve, and who understandably don't want to pay for a market good that is given away for free. Which brings to conservatives and their emotional outbursts about the scrapping of a Rule that vandalizes simple economics. On the face of it, how very 'man bites dog' that conservatives are siding with a government-produced Rule that tells for-profit businesses what services they can and cannot charge for. Worse, imagine disallowing charges for information access that is plainly valuable to those attaining it. Translated, outside financial service providers aren't acquiring data at the pleasure of the owners of it because they want to stare at it lovingly, rather they want to profitably access the information themselves by offering would-be customers their own suite of financial products based on information compiled. Yet the 'big' banks are the enemy here? More realistically, the banks charging a fee for their essential work is banks acting like businesses. There was a time when conservatives reveled in just that kind of profit-motivated activity.
Canada News.Net
11 hours ago
- Business
- Canada News.Net
CFPB paralyzed as staff paid to wait, mission dismantled under Trump
NEW YORK CITY, New York: For the last six months, the Consumer Financial Protection Bureau (CFPB) has been issuing pay cheques to its staff who have been ordered not to perform their duties, leaving the bureau idle in all but name. The CFPB, established 15 years ago to police banks and financial service providers, has been instrumental in returning some US$21 billion to consumers harmed by predatory practices. Now, the agency's core mission is being dismantled under new leadership, with staff stuck in limbo—paid but prohibited from acting. "It feels like we're just waiting," said one current employee, who spoke anonymously due to restrictions on speaking publicly. "We show up, check emails, and try not to talk too much. Even small conversations feel risky." Ten current and former employees, along with industry professionals who once worked closely with the bureau, painted a similar picture: internal communication has all but stopped, and staff feel adrift. The press office no longer responds to inquiries. While the CFPB dialed back its enforcement under President Donald Trump's first term, it still pursued some consumer protection cases. That shifted under President Joe Biden, when the bureau cracked down on excessive bank fees and probed the growing role of Big Tech in financial services, securing penalties from companies like Apple. However, the recent return of Trump's influence has reversed course dramatically. The Department of Government Efficiency—now overseen by Elon Musk—called for the CFPB's shutdown, and acting chief Russell Vought ordered employees not to carry out any job-related tasks. The courts temporarily blocked an effort to lay off 1,500 employees, but insiders worry that further cuts are imminent. Some enforcement actions have already been rolled back. Navy Federal Credit Union, for instance, was allowed to withdraw from an $80 million settlement over unlawful overdraft fees. Toyota also avoided penalties related to questionable loan practices. The bureau's productivity has plummeted. According to a report by Senator Elizabeth Warren, the CFPB now processes just 2,200 consumer complaints per day, down from around 10,500 before the policy shift. There have been rare exceptions. The bureau recently settled a case with FirstCash, a national pawn chain, over illegal high-interest loans to service members, resulting in a $9 million fine. However, with looming budget cuts that could slash funding in half, such enforcement actions may become even rarer. Inside the bureau, morale has cratered. As one employee put it, each week brings "mini-funerals" as colleagues resign rather than endure the uncertainty. For those who remain, the days are quiet, the work is scarce, and the future is uncertain. "I don't think I'll ever work in public service again," said one current employee, who has been looking for a new job for the past three months.
Axios
a day ago
- Health
- Axios
Millions of Americans now face a devastating one-two punch on health care
Millions of low-income Americans already face the prospect of losing their health insurance, and now they're looking at another worry: lower credit scores. Why it matters: Poor credit scores not only make it harder to borrow money, but also to accomplish such basic things as land a job or rent an apartment. How it works: The Trump administration last week got a federal court to toss a Biden-era rule that would have removed medical debt from people's credit reports. At the same time, cuts to Medicaid and the Affordable Care Act in the "big, beautiful bill" will likely mean people pay more for health care. The big picture: That means a single medical setback — hospitalization, broken bone, or worse — could crater people's credit scores, if it leads to unpaid bills that wind up in collection. "You really are double hammering households," says Michael Calhoun, president of the Center for Responsible Lending, a consumer advocacy group. Meanwhile, other debts are also about to show up on credit reports, including delinquent student loans, after a years-long pause, and buy-now, pay-later purchases. And cuts to food stamps, or SNAP, present an additional strain. Follow the money: Some argue that it's a win for consumers who pay their bills on time to have more information on their credit reports. But the more data the credit agencies have about people, the more potential there is that consumers get hurt by negative information, says Chi Chi Wu, a staff attorney at the National Consumer Law Center, which was on the losing side of the medical debt ruling. "It's not just you can't get a credit card, but you can't get a roof over your head." The intrigue: Because of the complexities of the U.S. health care system, it might not even be an unpaid bill that snares your credit score. Consumers routinely complained to the Consumer Financial Protection Bureau about medical debt errors on their credit reports, says Julie Margetta Morgan, a former associate director at the agency. Either the insurer should have paid; or the consumer already had, but it still appeared. Sometimes, debt would show up that was a mystery, says Morgan, now president of The Century Foundation, a progressive think tank. These issues can take a while to resolve, and that debt is like a "ticking time bomb," she says. "If you don't get it resolved, it will be reflected on your credit report." The CFPB's research also found that medical debt is not predictive of someone's likelihood to pay other bills. Reality check: There are reasons that the debt bomb may not fully explode here. After the CFPB drew attention to the issue, nine states banned medical debt from appearing on credit scores, including New York, Colorado and Minnesota. And the big credit-reporting firms stopped including medical debt under $500 on credit scores. Since then, the share of Americans with debt in collections has fallen. The firms do not plan on rolling back that change, according to a statement from Dan Smith, CEO of the Consumer Data Industry Association (CDIA), a trade group that challenged the medical debt ruling. What to watch: Medicaid cuts may not materialize. On Tuesday, Sen. Josh Hawley moved to reverse some. The NCLC hasn't yet said if it would appeal the medical debt ruling; though its odds of success are small. The other side:"Information about unpaid medical debts is an important element in assessing a consumer's ability to pay," the CDIA said in its statement.
Yahoo
2 days ago
- Business
- Yahoo
Texas Judge Blocks Biden-Era Rule Meant To Erase $49 Billion In Medical Debt From Credit Reports
A federal judge on Friday vacated a Biden-era rule that would have stripped medical debt from consumer credit reports, siding with credit-industry and Trump-administration arguments that regulators overreached. What Happened: According to a Reuters report, U.S. District Judge Sean Jordan said the Consumer Financial Protection Bureau rewrote the Fair Credit Reporting Act when it finalized the policy in January, a move he ruled exceeded the agency's authority. Trending; GoSun's Breakthrough Rooftop EV Charger Already Has 2,000+ Units Reserved — His decision blocks a measure the CFPB estimated would erase about $49 billion in liabilities from the records of 15 million Americans and bar lenders from using medical data in loan decisions. The judge, a 2019 Donald Trump appointee, noted that Congress lets credit bureaus report coded medical debts and that federal law pre-empts stricter state limits. Experian, Equifax and TransUnion argued the rule would give lenders an incomplete picture of a borrower's ability to repay, even after they voluntarily stopped listing medical collections under $500 in 2022. "This is the right outcome for protecting the integrity of the system," Consumer Data Industry Association chief executive Dan Smith said. Why It Matters: The Biden administration adopted the ban after research showed medical bills, which include shocks from accidents or hospital stays, distort credit scores yet reveal little about long-term solvency. Roughly one in 12 adults carries at least $250 in unpaid medical debt. A CFPB statement in January called the measure a common-sense fix for families who would see scores rise by as much as 20 points. Consumer advocates condemned Friday's ruling and urged the White House to appeal, but the Justice Department has not defended the rule since the CFPB reversed course under President Trump. The policy's fate grew uncertain after that reversal, warning millions could still face higher borrowing costs. The now-vacated rule anchored a broader White House strategy that also steered Medicaid funds to North Carolina hospitals that forgave patient balances. Read Next: Named a TIME Best Invention and Backed by 5,000+ Users, Kara's Air-to-Water Pod Cuts Plastic and Costs — And You Can Invest At Just $6.37/Share Bezos' Favorite Real Estate Platform Launches A Way To Ride The Ongoing Private Credit Boom Photo Courtesy: Salma Bashir on Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? This article Texas Judge Blocks Biden-Era Rule Meant To Erase $49 Billion In Medical Debt From Credit Reports originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Your credit score could be negatively impacted by this controversial court ruling about medical debt
Last Friday, a federal judge axed a Biden-era rule from the Consumer Financial Protection Bureau (CFPB) that would have prohibited consumer credit reporting agencies from including certain medical debts on consumer credit reports. The Platinum Card is about to change. Amex's new fast-format airport lounge might be a sneak preview GENIUS Act update: What's happening with the stablecoin crypto vote? Managers think employees should take a break from work—but they don't promote the ones who do The CFPB rule amended a Fair Credit Reporting Act (FCRA) regulatory exception that allowed creditors to obtain and use information on medical debts. The rule had been finalized shortly before the Biden administration left office and was set to take effect on March 15. However, legal challenges delayed its start date. The rule prohibited creditors from considering medical information when determining credit eligibility and restricted credit reporting agencies from including certain types of medical debt information in consumer credit reports. Medical debt will stay on credit reports On July 11, 2025, U.S. District Judge Sean Jordan of the Eastern District Court in Texas reversed the Biden-era rule. In his opinion, Jordan, a Trump appointee, said that the court found that rule exceeded the CFPB's authority under the FCRA. The federal lawsuit was filed on January 7, the same day the Biden-era rule had been finalized. In the legal complaint, the Cornerstone Credit Union League and the Consumer Data Industry Association asserted that the rule violated the law and that only Congress had the authority to make such changes. The Trump-era CFPB, along with acting director Russell Vought, joined the lawsuit on April 30, with the agency asking the court to vacate the rule. In response to the ruling, Senate Democrats led by Raphael Warnock of Georgia wrote a letter to Vought asking for an explanation about the reversal. 'Medical debt collections information is often inaccurate, and studies show that it is not useful in determining a consumer's ability to repay other debts,' the senators wrote. Fast Company reached out to CFPB for comment. Court order impacts millions of Americans with medical debt CFPB research found that a medical bill on a credit report isn't a good indicator of a person's ability to repay a loan. Research also showed that medical debt on credit reports contributed to mortgage application denials for loans that consumers would have been able to afford. In its January announcement, the CFPB stated that the rule would remove an estimated $49 billion in medical bills from credit reports and affect approximately 15 million Americans. It added that people with medical debt on their credit reports could see an average boost of 20 points on their score. However, now that the rule has been reversed, debt will remain on consumer credit reports, and creditors are still allowed to consider medical debt when making credit decisions. This post originally appeared at to get the Fast Company newsletter: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
