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Greenville Business Magazine

The Business Narrative: Erasing Medical Debt

Jun 17, 2024 10:31AM ● By Donna Walker

CFPB Proposes to Ban Medical Bills from Credit Reports

The Consumer Financial Protection Bureau (CFPB) proposed a rule that would remove medical bills from most credit reports, increase privacy protections, help to increase credit scores and loan approvals, and prevent debt collectors from using the credit reporting system to coerce people to pay.


Officials said the proposal would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical information.


The proposed rule is part of the CFPB’s efforts to address the burden of medical debt and coercive credit reporting practices.


"The CFPB is seeking to end the senseless practice of weaponizing the credit reporting system to coerce patients into paying medical bills that they do not owe,” said CFPB Director Rohit Chopra. "Medical bills on credit reports too often are inaccurate and have little to no predictive value when it comes to repaying other loans."


In 2003, Congress restricted lenders from obtaining or using medical information, including information about debts, through the Fair and Accurate Credit Transactions Act.


However, federal agencies subsequently issued a special regulatory exception to allow creditors to use medical debts in their credit decisions.


The CFPB is proposing to close the regulatory loophole that has kept vast amounts of medical debt information in the credit reporting system.


Officials said the proposed rule would help ensure that medical information doesn’t unjustly damage credit scores, and would help keep debt collectors from coercing payments for inaccurate or false medical bills.


The CFPB’s research reveals that a medical bill on a person’s credit report is not a good predicter of whether they will repay a loan.


In fact, the CFPB’s analysis shows that medical debts penalize consumers by making underwriting decisions less accurate and leading to thousands of denied applications on mortgages that consumers would repay.


Since these are loans people will repay, the CFPB expects lenders will also benefit from improved underwriting and increased volume of safe loan approvals.


In terms of mortgages, the CFPB expects the proposed rule would lead to the approval of approximately 22,000 additional, safe mortgages every year.


In December 2014, the CFPB released a report showing that medical debts provide less predictive value to lenders than other debts on credit reports.


Then in March 2022, the CFPB released a report estimating that medical bills made up $88 billion of reported debts on credit reports. In that report, the CFPB announced it would assess whether credit reports should include data on unpaid medical bills.


Since the March 2022 report, the three nationwide credit reporting conglomerates – Equifax, Experian, and TransUnion – announced they would take many of those bills off credit reports, and FICO and VantageScore, the two major credit scoring companies, have decreased the degree to which medical bills impact a consumer’s score.


Despite these voluntary industry changes, 15 million Americans still have $49 billion in outstanding medical bills in collections appearing in the credit reporting system.


Officials said the complex nature of medical billing, insurance coverage and reimbursement, and collections means that medical debts that continue to be reported are often inaccurate or inflated.


Additionally, changes by FICO and VantageScore haven’t eliminated the credit score difference between people with and without medical debt on their credit reports, the officials said.


CFPB officials said they expect that Americans with medical debt on their credit reports will see their credit scores rise by 20 points, on average, if the proposed rule is finalized.


The officials said many debt collectors engage in a practice known as “debt parking,” where they purchase medical debt then place it on credit reports, often without the consumer’s knowledge.


When consumers apply for credit, they may discover that a medical bill is hindering their ability to get a loan. Consumers may then feel forced to pay the medical bill in order to improve their credit score and be approved for a loan, regardless of the debt’s validity, the officials said.


Specifically, the proposed rule, if finalized would:

Eliminate the special medical debt exception: The proposed rule would remove the exception that broadly permits lenders to obtain and use information about medical debt to make credit eligibility determinations. Lenders would continue to be able to consider medical information related to disability income and similar benefits, as well as medical information relevant to the purpose of the loan, so long as certain conditions are met.


Establish guardrails for credit reporting companies: The proposed rule would prohibit credit reporting companies from including medical debt on credit reports sent to creditors when creditors are prohibited from considering it.


Ban repossession of medical devices: The proposed rule would prohibit lenders from taking medical devices as collateral for a loan, and bans lenders from repossessing medical devices, like wheelchairs or prosthetic limbs, if people are unable to repay the loan.


The CFPB began the rulemaking in September 2023 with the goals of ending coercive debt collection practices and limiting the role of medical debt in the credit reporting system.


The CFPB additionally published in 2022 a report describing the extensive and debilitating effects of medical debt along with a bulletin on the No Surprises Act to remind credit reporting companies and debt collectors of their legal responsibilities under that legislation.

New Gateway at the Green Project Announces Key Partners

The Greenville Housing Fund, Gateway Development, and Creative Builders are announcing their key partners in the under-construction Gateway at the Green, a 72-unit, apartment community on Webb Road near Haywood Mall in Greenville, South Carolina.


The Gateway at the Green involved a capital investment of approximately $20 million. 


In addition to support from the Greenville Housing Fund, the project was funded through a $14.5 million construction loan from Synovus Bank, a $10.5 million Federal tax credit investment from Synovus Community Investment Capital, a $5.5 million State Tax Credit investment from Monarch Private Capital and a $3.5 million permanent loan from Centrant Community Capital.  


In addition, Creative Builders serves as general contractor; Studio 8 Architecture provided the architectural design and Site Design is handling the civil engineering.


The project will bring the all-affordable development to this convenient location, adjacent to Mall Connector, Congaree, and Woodruff Road businesses and to Greenlink Transit connections.


The Patewood medical campuses and the new city of Greenville, Greenville County, and state of South Carolina public services cluster on Halton Road are also nearby.


Leasing at the complex is slated to begin in late summer 2025.


Gateway at the Green will consist of three energy-efficient residential buildings containing a mix of one-bedroom/one-bathroom, two-bedroom/two-bathroom, and three-bedroom/two bathroom units, with naturalized landscaping. 


A community clubhouse will house laundry facilities, a computer lab, a fitness room, a community gathering space, and a leasing office. 


In a little over five years since its inception, GHF has invested over $19 million and leveraged $250 million in creating or preserving over 1,550 units of housing in Greenville County, many affordable to households living on as little as 30 percent of area median income.

MTEC Announces Strategic Leadership Transitions

Summerville, South Carolina-based Medical Technology Enterprise Consortium (MTEC) said Shawn Green has taken over the reins of MTEC's presidency from former President Bill Howell effective May 24.


With a doctorate in cellular biology and MBA from Georgetown University, Green brings extensive experience in biomedical research and created several successful life science companies in the areas of therapeutics, devices, and bioinformatics.


He is a prolific researcher with over 100 patents and publications in esteemed journals such as Science and Nature Medicine.


During his early career at Walter Reed Army Institute of Research (WRAIR), his discoveries provided new insights in our understanding of innate immunity in infectious diseases. 


As MTEC president, Green will lead efforts to diversify funding sources and expand the commercialization and branding strategies for MTEC.


Green is joined by Ret. CDR Christopher Steele, Ph.D., who will serve as MTEC's new chief of Strategy and Business Development. Steele has 34+ years of Army enlisted, and Navy commissioned service.


His R&D experience includes tours at the Naval Submarine Medical Research Laboratory, Uniformed Services University of the Health Sciences, Office of Naval Research, U.S. Army Medical Research and Development Command, and the Bureau of Navy Medicine and Surgery.


Steele's program experience includes strategic planning and funding in behavioral health, musculoskeletal injuries, rehabilitative medicine, neurosensory systems, sleep, environmental physiology, combat casualty care and radiological health.


In addition, Ret. Col. Stuart Tyner, Ph.D., will serve as a senior advisor to MTEC. Tyner spent 22 years in the Army, serving in leadership positions, including director of the Defense Health Agency Infectious Diseases Portfolio and director of the Military Infectious Diseases Research Program.


He also was chief science officer at the U.S. Army Institute of Surgical Research and the chief of staff at WRAIR. Tyner's program experience includes strategic planning and funding in infectious diseases, combat casualty care and regenerative medicine.


In culmination of his service, Tyner was appointed as the lead policy advisor to the U.S. Army Surgeon General in microbiology and serves on the advisory board of The Geneva Foundation.


The Medical Technology Enterprise Consortium is a 501(c)(3) biomedical technology consortium that is internationally dispersed, collaborating with multiple government agencies.


The consortium focuses on the development of medical solutions that protect, treat, and optimize the health and performance of military personnel and civilians.

Nucor Announces Guidance for the Second Quarter of 2024 Earnings

Nucor Corporation (NYSE: NUE) on June 14, 2024,today announced guidance for its second quarter ending June 29, 2024.


Nucor expects second quarter earnings to be in the range of $2.20 to $2.30 per diluted share. Nucor reported net earnings of $3.46 per diluted share in the first quarter of 2024 and $5.81 per diluted share in the second quarter of 2023.


Nucor officials said the largest driver for the expected decrease in earnings in the second quarter of 2024 as compared to the first quarter of 2024 is the decreased earnings of the steel mills segment, due primarily to lower average selling prices, and, to a lesser extent, lower volumes.


The officials said the steel products segment is expected to have decreased earnings in the second quarter of 2024 as compared to the first quarter of 2024 due to lower average selling prices, partially offset by increased volumes.


Earnings in the raw materials segment are expected to be higher in the second quarter of 2024 as compared to the first quarter of 2024 due to the increased profitability of the company’s direct reduced iron facilities, the officials said.


During the second quarter, Nucor has repurchased approximately 2.9 million shares at an average price of $170.70 per share (approximately 8.5 million shares year-to-date at an average price of $177.30 per share).


Nucor has returned more than $1.76 billion to stockholders in the form of share repurchases and dividend payments year-to-date.


Nucor and its affiliates are manufacturers of steel and steel products, with operating facilities in the United States, Canada and Mexico, including operations in Berkeley County, South Carolina.


Products produced include: carbon and alloy steel -- in bars, beams, sheet and plate; hollow structural section tubing; electrical conduit; steel racking; steel piling; steel joists and joist girders; steel deck; fabricated concrete reinforcing steel; cold finished steel; precision castings; steel fasteners; metal building systems; insulated metal panels; overhead doors; steel grating; wire and wire mesh; and utility structures.


Nucor, through The David J. Joseph Company, also brokers ferrous and nonferrous metals, pig iron and hot briquetted iron/direct reduced iron; supplies ferro-alloys; and processes ferrous and nonferrous scrap.


Nucor is North America's largest recycler.

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