Should Medical Debt Be Included in Creditworthiness Measures?

Subscribe and Listen

The CFPB and state regulators and legislators have medical debt in their crosshairs. In this episode, we’re joined by Chris Eastman, CEO of the Pendrick Group, a Cerberus portfolio company that specializes in financial services solutions for healthcare companies. We discuss the differences between medical debt and other types of debt, as well as how states have been regulating medical debt including the collection of medical debt. Mr. Eastman discusses his company’s efforts to provide cash flows into hospitals and other healthcare providers that are operating at razor-thin margins. We also discuss the CFPB’s assertion that medical debt is less predictive than other sources of debt in determining the creditworthiness of a consumer. Mr. Eastman discusses how medical debt may be a valuable indicator when assessing the financial stress of a consumer.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, leads the conversation, and is joined by Joseph Schuster, a Partner in the group.

This podcast was recorded prior to the CFPB issuing the proposed rule that would prohibit creditors from using medical debt information when making credit eligibility decisions. For more information about that rule, please click here.

Copyright © 2024 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.