Kilroy Achieves another Legislative Victory for Ohio Consumers

Washington, DC—The same week that her Small Business Intermediary Lending Pilot Program Act was signed into law, U.S. Representative Mary Jo Kilroy (OH-15) put another legislative win under her belt with the passage of her Medical Debt Relief Act of 2010.  The bill, which passed the House today by a margin of 336 to 82, would prevent credit bureaus from using paid off or settled medical debt against consumers seeking home mortgages or car loans.

“I introduced the Medical Debt Relief Act to help hard-working Ohioans who play by the rules yet suffer blows to their credit scores because of an unforeseen medical emergency," said Kilroy.  "In this day and age credit scores are critical to an individual’s ability to buy a house, car, or even attain gainful employment. My bill would ensure fairness by guaranteeing Ohioans and the millions of other Americans affected by medical debt that their future financial transactions will not be adversely affected years after they’ve settled what they owed.”

According to the nonpartisan Commonwealth Fund, there are 79 million adults with medical debt or bill problems.  This is because medical debt collections are more likely to be in dispute, inconsistently reported, and can stay on a borrower’s credit report for seven years – even if that bill is ultimately paid or settled. Therefore, Americans who do incur debt and subsequently reconcile it are forced to wait years for their credit scores to rebound, affecting their ability to buy a home, launch a business, or even obtain a job.  Kilroy introduced the Medical Debt Relief Act to help hard-working Americans who despite having paid their medical debts, find their economic well-being adversely affected for years to come. The bill would require that medical debt fully paid off or settled be removed from a consumer’s credit records within 45 days.

Kilroy’s Medical Debt Relief Act is supported by: National Association of Home Builders, Mortgage Bankers Association, Americans for Financial Reform, National Credit Reporting Association, Consumer’s Union, National Consumer Law Center (on behalf of its low income clients), National Association of Consumer Advocates, Consumer Action, Families USA, Unite Here, National MS Society, Corporation of Enterprise Development, NAACP, the National Council of La Raza, Consumer Federation of America, U.S. PIRG, and Community Catalyst.

Some additional facts about medical debt:

·               Medical debt is unique as individuals don't get to decide when they get sick or when illness strikes.

·               60% of those with medical bills and debts were insured at the time they assumed health care debt.

·               Over 28 million Americans were harassed by debt collectors in 2007 because of health care bills.

·               Medical debt collections are of questionable value in predicting future payment performance because they are atypical and non-predictive.

·               According to mortgage originators and services, even one negative medical collection mark on a credit score can drop a consumer from Tier 1 to Tier 2 of the credit rating system which could cost consumers thousands of dollars in percentage points and closing premiums. 


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About

Representative Kilroy

The 15th District



Washington, DC Office
1237 Longworth HOB
Washington, D.C. 20515
Phone: (202) 225-2015
Fax: (202) 225-3529

Columbus Office
<1299 Olentangy River Rd, ste. 200
Columbus, OH 43212
Phone: (614) 294-2196
Fax: (614) 294-2384