CUNA wrote to the House financial services committee on Tuesday expressing concern about the provisions of a bill on debt collection before it is raised by the committee. The wording of the Debt Collection Improvement Act (HR 2547) would prohibit the inclusion of medical debts in credit reports.
“Restrictions on reporting or accounting for certain debts prevent lenders from seeing the full debt situation of borrowers and hamper the ability of lenders to fairly assess the creditworthiness of borrowers,” the letter said. “An incomplete view of borrowers’ credit histories reduces lender’s confidence in credit reports and scores, which affects pricing decisions and credit availability. “
The letter also expresses concern about the precedent this could set that would ultimately hurt underwriting, making it more difficult for lenders to make safe and sound credit decisions.
CUNA is also concerned about a section that would expand the coverage of the Fair Debt Collection Practices Act to non-judicial mortgage foreclosures.
“This provision will expose mortgage agents to increased liability from the FDCPA and create regulatory compliance issues for entities enforcing collateral. Again, for consumers, the impact will be visible in the prices and availability of credit; for financial institutions, resources will be wasted in complying and defending against legal actions associated with this provision, ”the letter said. “We urge the Committee to first conduct a thorough investigation of the increased loan and service costs before considering this measure. “