Contact: Giselle Barry (Markey) 2022242742

Lawmaker asks Consumer Financial Protection Bureau to investigate medical financial products

Washington (October 22, 2013) - As medical debt continues to burden millions of Americans, with more than one in five Americans having problems paying medical bills, today Senator Edward J. Markey (DMass.), queried the Consumer Financial Protection Bureau (CFPB) on the astonishingly high costs associated with some third party medical loans and credit cards to pay for procedures not covered by health insurance. Offered to patients often immediately following or in anticipation of expensive medical or dental procedures, these financial products cover the costs of procedures but come with very high interest rates and questionable financing terms. A recent story by The New York Times highlighted these financial products, reporting interest rates as high as 33 percent and increasing use, especially for elderly or low income individuals who may not otherwise be able to pay for medical or dental services. In one case profiled by the news story, a patient's monthly repayments now add up to one third of her monthly Social Security benefits. Additionally, these products are often offered to patients by trusted health care practitioners or facilities, allowing health care providers to profit along with lending institutions when these financial products are used. 

 

"Exploiting vulnerable patients with a financial quick fix is predatory and pernicious," said Senator Markey, a member of the Commerce, Science and Transportation Committee. "Patients should not have to recover from mountains of unnecessary debt while also recovering from medical procedures.  We need to know more about these consumer financial products and services so we can protect patients that may be subject to abusive lending practices or exploitation. I look forward to receiving responses from the CFPB."

 

A copy of Senator Markey's letter to the CFPB can be found HERE .

 

Senator Markey's letter asks for responses from the CFPB to questions that include:

 

  • • Is the information provided to consumers when offered medical financial products sufficient to ensure they can understand the repayment terms, fees, and general nature of these financial products?
  • • What measures should financial institutions and lenders take to clarify and increase transparency of the terms surrounding these financial products?
  • • How do the annual percentage rates, interest plans, and terms of credit for medical credit cards, medical loans or other financial products differ from traditional credit cards, loans or other financial products?
  • • Do financial institutions or lenders charge medical providers a fee for offering medical credit cards or other third party financing services to their patients, and do they have a quota? 
  • • Are there any financial incentives or other benefits available to providers for getting patients to apply for these medical financial products?