CFPB Deputy Director Zixta Martinez recently provided the opening remarks at the CFPB’s Academic Research Council meeting. In her remarks, Martinez emphasized the CFPB’s role as a data-driven agency and welcomed further discussion of state payday extended payment plans and of the inclusion of medical debt in credit reports—two topics that have garnered renewed public interest due to the COVID-19 pandemic.
Martinez highlighted the CFPB’s April 6 report, “Market Snapshot: Consumer use of State payday loan extended payment plans,” (previously covered here) which found that despite the benefits of state payday extended payment plans, which allow borrowers to repay their payday loans and accrued fees in several no-cost installments, usage rates for extended payment plans generally remain lower than rollover rates. Martinez explained that the agency has not determined the most relevant or prevalent causes for the lower usage rates and invited further collection and publication of additional data on payment plans.
Martinez also discussed the agency’s March 1 report, “Medical Debt Burden in the United States,” (previously covered here), which addressed the impact of medical debt on credit scores. The report builds upon the agency’s 2014 study, which concluded that medical billing data on a credit report is less predictive of future repayment than reporting on traditional credit obligations. As previously covered, effective July 1 of this year, Equifax, Experian, and TransUnion will no longer include on their consumer credit reports medical debt that was paid after it was sent to collections. Additionally, unpaid medical bills will only be reported if they have remained unpaid for at least 12 months. Martinez says this move “is a first step, but it is not enough” and posed a number of questions regarding the impact of this change, including whether medical bills should even be included in credit reports at all.