[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1238 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 1238
To express the sense of the Congress with respect to the price and
terms of credit used to pay large medical bills, to amend the Truth in
Lending Act with respect to credit card issuers obligations for credit
extended to pay medical expenses under certain circumstances, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 10, 2005
Mr. Hastings of Florida (for himself, Ms. Slaughter, Mr. Sanders, Mr.
Owens, Mr. Stark, Mr. Cummings, Ms. Wasserman Schultz, Mrs.
Christensen, Mr. Lewis of Georgia, Mr. Conyers, Ms. Jackson-Lee of
Texas, Mr. Butterfield, Mr. Meek of Florida, Ms. Norton, Mr. Wexler,
Mr. Clay, Mr. Michaud, and Mr. Payne) introduced the following bill;
which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To express the sense of the Congress with respect to the price and
terms of credit used to pay large medical bills, to amend the Truth in
Lending Act with respect to credit card issuers obligations for credit
extended to pay medical expenses under certain circumstances, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medical Bills Interest Rate Relief
Act''.
SEC. 2. FINDINGS; SENSE OF THE CONGRESS.
(a) Findings.--The Congress finds as follows:
(1) Many families and individuals are forced deep into debt
by the combination of large medical bills and excessively high
interest rates.
(2) The policy journal Health Affairs reports that illness
and medical bills cause half of all bankruptcies.
(3) The same report notes that over 2 million Americans are
financially ruined by medical care costs each year.
(4) Consumers whose debt consists largely of credit
extended to pay medical expenses are 42 percent more likely
than other debtors to experience lapses in coverage.
(5) Many of those forced into bankruptcy by medical
expenses are middle class and have health insurance.
(6) Major credit card issuers tie credit card interest
rates to credit records and credit scores.
(7) However, previously unforeseen and burdensome medical
expenses may arise whereby the hospital-mandated schedule of
payment is more than the individual can immediately afford.
(8) Hospitals often report late- or delinquent-payers to
consumer reporting agencies thereby directly affecting the
rates, terms, and availability of credit from other sources
that might otherwise be used to pay the medical expenses.
(9) Many individuals and families are forced to place large
medical expenses on their credit cards over time.
(10) Credit card issuers are able to raise interest rates
on late- and delinquent-payers with impunity and without
regards to the nature of the delinquency.
(11) There currently exists no government-enforced ceiling
cap on credit card interest rates.
(b) Purpose.--The purpose of this Act is to stem the loss from
rising instances of payment delinquencies and bankruptcies so that
people who meet their bill payment requirements on time and in full
receive the lowest interest rates.
(c) Sense of the Congress.--It is the sense of the Congress that--
(1) no American family or individual should be forced to
choose between the health and life of a loved one and the
financial constraints of medical care;
(2) financial institutions, including credit card issuers,
should not take financial advantage of unforeseen,
nonpreventive, or catastrophic medical situations; and
(3) individuals or families saddled with large medical
bills should receive a fair and equitable credit rating that
disregards off-schedule medical bill payments.
SEC. 3. CREDIT CARD ISSUERS OBLIGATIONS FOR CREDIT EXTENDED TO PAY
MEDICAL EXPENSES.
Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended
by adding at the end the following new subsection:
``(h) Credit Card Issuers Obligations for Credit Extended to Pay
Medical Expenses.--
``(1) In general.--If, with respect to a credit card
account under an open end consumer credit plan, the consumer
notifies the credit card issuer of anticipated, any upcoming
medical expense to be incurred by the consumer, or a member of
the consumer's household, within 30 days of the date of the
expense--
``(A) the annual percentage rate on credit extended
under the plan to pay such medical expenses shall not
exceed the annual percentage rate in effect for any
outstanding balance of the consumer under the plan at
the time such notice is given; and
``(B) the annual percentage rate extended under the
plan to pay nonmedical expenses may not be increased on
the basis of, or due to, the extension of credit to pay
such medical expenses.
``(2) Medical expenses.--For purposes of this subsection,
the term `medical expenses' includes necessary treatments,
drugs, tests, hospital stays, and expenses, doctor fees, and
elective surgeries.''.
SEC. 4. CREDIT HISTORY REPORTING REQUIREMENT IN CASE OF CERTAIN MEDICAL
EXPENSES.
Section 623 of the Fair Credit Reporting Act (15 U.S.C. 1681s-2) is
amended by adding at the end the following new subsection:
``(f) Reports Furnished by Hospitals.--
``(1) In general.--If a consumer, who is unable to make
full payments for medical expenses (as defined in section
127(h)(2)) to a hospital or other medical treatment facility in
accordance with a schedule of payments imposed by such hospital
or facility, continues, in good faith, to make partial payments
on the outstanding balance on the prescribed due dates under
such schedule, the hospital or facility may not submit negative
information relating to the failure of such consumer to
maintain the payment schedule in full during the 5-year period
beginning when the consumer first fails to make full payment
under the payment schedule.
``(2) Good faith partial payment.--For purposes of
paragraph (1), a consumer shall be deemed to be making partial
payments in good faith on the prescribed due dates if the
consumer is paying at least 20 percent of the amount of the
scheduled payment for each due date.''.
SEC. 5. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take effect on
January 1, 2006.
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