(PDF provides a complete and accurate display of this text.)
[House Report 111-629]
[From the U.S. Government Publishing Office]
111th Congress Report
2d Session HOUSE OF REPRESENTATIVES 111-629
MEDICAL DEBT RELIEF ACT OF 2010
September 28, 2010.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
Mr. Frank, from the Committee on Financial Services, submitted the
R E P O R T
[To accompany H.R. 3421]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 3421) to exclude from consumer credit reports
medical debt that has been in collection and has been fully
paid or settled, and for other purposes, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Consideration.......................................... 4
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 4
Performance Goals and Objectives................................. 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Constitutional Authority Statement............................... 5
Applicability to Legislative Branch.............................. 6
Earmark Identification........................................... 6
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill, as Reported............ 6
The amendment is as follows:
Strike all after the enacting clause and insert the
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medical Debt Relief Act of 2010''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds the following:
(1) Medical debt is unique, and Americans do not choose when
accidents happen or when illness strikes.
(2) Medical debt collection issues affect both insured and
(3) According to credit evaluators, medical debt collections
are more likely to be in dispute, inconsistently reported, and
of questionable value in predicting future payment performance
because it is atypical and nonpredictive.
(4) Nevertheless, medical debt that has been completely paid
off or settled can significantly damage a consumer's credit
score for years.
(5) As a result, consumers can be denied credit or pay higher
interest rates when buying a home or obtaining a credit card.
(6) Healthcare providers are increasingly turning to outside
collection agencies to help secure payment from patients and
this comes at the expense of the consumer because medical debts
are not typically reported unless they become assigned to
(7) In fact, medical bills account for more than half of all
non-credit related collection actions reported to consumer
credit reporting agencies.
(8) The issue of medical debt affects millions.
(9) According to the Commonwealth Fund, medical bill problems
or accrued medical debt affects roughly 72,000,000 working-age
adults in America.
(10) For 2007, 28,000,000 working-age American adults were
contacted by a collection agency for unpaid medical bills.
(b) Purpose.--It is the purpose of this Act to exclude from consumer
credit reports medical debt that had been characterized as delinquent,
charged off, or debt in collection for credit reporting purposes and
has been fully paid or settled.
SEC. 3. AMENDMENTS TO FAIR CREDIT REPORTING ACT.
(a) Medical Debt Defined.--Section 603 of the Fair Credit Reporting
Act (15 U.S.C. 1681a), as amended by section 1088(a)(1) of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (Public Law 111-
203; 124 Stat. 2086), is amended by adding at the end the following:
``(z) Medical Debt.--The term `medical debt' means a debt described
in section 604(g)(1)(C).''
(b) Exclusion for Paid or Settled Medical Debt.--Section 605(a) of
the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended by adding
at the end the following new paragraph:
``(7) Any information related to a fully paid or settled
medical debt that had been characterized as delinquent, charged
off, or in collection which, from the date of payment or
settlement, antedates the report by more than 45 days.''.
Purpose and Summary
H.R. 3421, the ``Medical Debt Relief Act of 2009,'' amends
the Fair Credit Reporting Act to require that fully paid or
settled medical debt that has been characterized as delinquent,
charged off or in collections, be removed from a consumer
report within 45 days.
Background and Need for Legislation
Under the Fair Credit Reporting Act (FCRA), a ``consumer
report'' generally includes four types of information: (1)
identifying information such as the person's name, date of
birth, current and previous addresses; (2) trade account
information that includes information on the type of credit
being used such as whether it is revolving or installment
credit; (3) information obtained from public records such as
tax liens; and (4) a list of the number of ``hard'' inquiries.
Under the FCRA, obsolete adverse information is prohibited from
being reported. With certain exceptions, such as tax liens and
bankruptcies, most adverse information may remain on a consumer
report for at least seven years.
Proponents of the bill argue that medical debt is unique
because, unlike other types of debt, consumers do not choose
when accidents happen or when a health crisis occurs. As such,
consumers' creditworthiness should not be adversely impacted
because of information about fully paid or settled medical debt
that is contained on their consumer report. The Commonwealth
Fund found in its Biennial Health Insurance Surveys, 2001-2007,
that about 79 million adults, including 7 million adults age 65
or more, report problems paying medical bills or have
accumulated medical debt.
The Subcommittee on Financial Institutions and Consumer
Credit held a hearing entitled, ``Keeping Score on Credit
Scores: An Overview of Credit Scores, Credit Reports and their
Impact on Consumers,'' on March 24, 2010. The following
Mr. Evan Hendricks, Editor/Publisher,
Mr. Stuart K. Pratt, President and CEO,
Consumer Data Industry Association
Mr. Tom Quinn, Vice President, Global
Scoring Solutions, FICO
Mr. Barrett Burns, President and CEO,
VantageScore Solutions LLC
Mr. Chet D. Wiermanski, Global Chief
Scientist, Analytic Decision Services, TransUnion LLC
Mr. Stan Oliai, Senior Vice President,
Decision Sciences, Experian Decision Analytics,
Ms. Myra K. Hart, PhD, Senior Vice
President, Analytical Services, Equifax Inc.
Ms. Anne P. Fortney, Partner, Hudson Cook
Ms. Sandra Braunstein, Director, Division of
Consumer and Community Affairs, Federal Reserve Board
Mr. David Vladeck, Director, Bureau of
Consumer Protection, Federal Trade Commission
The Subcommittee also held a hearing entitled ``Use of
Credit Information Beyond Lending: Issues and Reform
Proposals,'' on May 12, 2010. The following witnesses
Mr. Michael T. McRaith, Director, Illinois
Department of Insurance, on behalf of the National
Association of Insurance Commissioners
Mr. David Snyder, Vice President and
Associate General Counsel, Public Policy, American
Mr. John Wilson, Director, Analytics,
LexisNexis Risk Solutions
Ms. Chi Chi Wu, Staff Attorney, National
Consumer Law Center
Mr. Mark Rukavina, Executive Director, The
Mr. Stuart K. Pratt, President and CEO,
Consumer Data Industry Association
Ms. Anne Fortney, Partner, Hudson Cook LLP
The Committee on Financial Services met in open session on
July 28, 2010, and ordered H.R. 3421, Medical Debt Relief Act
of 2009, as amended, favorably reported to the House by a voice
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. No
record votes were taken with in conjunction with the
consideration of this legislation. A motion by Mr. Frank to
report the bill, as amended, to the House with a favorable
recommendation was agreed to by a voice vote.
During the consideration of the bill, the following
amendment was considered:
An amendment by Ms. Kilroy (and Mr. Frank), no. 1, a
manager's amendment, was agreed to by a voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held hearings and
made findings that are reflected in this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
H.R. 3421 amends the Fair Credit Reporting Act to require
that fully paid or settled medical debt that has been
characterized as delinquent, charged off or in collections, be
removed from a consumer report within 45 days, so that
consumers( creditworthiness should not be adversely impacted.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
August 20, 2010.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3421, the Medical
Debt Relief Act of 2009.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Douglas W. Elmendorf.
H.R. 3421--Medical Debt Relief Act of 2009
H.R. 3421 would prohibit credit reporting agencies from
listing medical debts that have been paid or settled in
consumer credit reports if those debts were paid or settled
more than 45 days before the credit report is issued.
Based on information from the Federal Trade Commission
(FTC), CBO estimates that implementing H.R. 3421 would not
significantly increase spending subject to appropriation.
Enacting H.R. 3421 could increase the collection of civil
penalties and thus could affect federal revenues; therefore,
pay-as-you-go procedures apply. However, CBO estimates that
such collections would not be significant in any year.
H.R. 3421 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments.
H.R. 3421 would impose a private-sector mandate on consumer
credit reporting agencies by requiring them to exclude certain
debts from credit reports. Based on information from industry
sources, CBO estimates that the cost of complying with this
mandate would fall well below the annual threshold for private-
sector mandates established in UMRA ($141 million in 2010,
adjusted annually for inflation).
The CBO staff contacts for this estimate are Susan Willie
(for federal costs), and Brian Prest and Paige Piper/Bach (for
the impact on the private sector). The estimate was approved by
Theresa Gullo, Deputy Assistant Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional Authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
general welfare of the United States) and clause 3 (relating to
the power to regulate interstate commerce).
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
H.R. 3421 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section establishes the short title of the bill as the
``Medical Debt Relief Act of 2009.''
Section 2. Findings and purposes
This section outlines a number of congressional findings on
the impact of medical debt on consumers, including that medical
bills account for more than half of all non-credit related
collection actions reported to consumer reporting agencies, and
that medical debt issues affect millions of consumers.
Section 3. Amendments to the Fair Credit Reporting Act
This section prohibits the reporting of information on
fully paid or settled medical debt that has been characterized
as delinquent, charged off or in collections on a consumer
report, which from the date of payment or settlement, antedates
the report by more than 45 days.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
FAIR CREDIT REPORTING ACT
TITLE VI--CONSUMER CREDIT REPORTING
* * * * * * *
Sec. 603. Definitions and rules of construction
(a) * * *
* * * * * * *
(z) Medical Debt.--The term ``medical debt'' means a debt
described in section 604(g)(1)(C).
* * * * * * *
Sec. 605. Requirements relating to information contained in consumer
(a) Information Excluded From Consumer Reports.--Except as
authorized under subsection (b), no consumer reporting agency
may make any consumer report containing any of the following
items of information:
(1) * * *
* * * * * * *
(7) Any information related to a fully paid or
settled medical debt that had been characterized as
delinquent, charged off, or in collection which, from
the date of payment or settlement, antedates the report
by more than 45 days.
* * * * * * *