Consumer debt: medical credit cards and medical debt.

Existing law regulates the issuance, use, and processing of credit cards and credit card transactions. Existing law, the Areias Credit Card Full Disclosure Act of 1986, requires a credit card issuer, with each billing statement provided to a cardholder in this state, to provide certain information on the front of the first page of the billing statement. This bill would regulate offers for a medical credit card, which the bill would define as a credit card issued under an open-end or closed-end plan offered specifically for the payment of medical services, products, or devices. Specifically, the bill would require an entity that offers a medical credit card to provide a clear and conspicuous disclosure to an individual stating that the product is a credit card and not a payment plan. The bill would require the disclosure to include the annual percentage rate applicable to the medical credit card. The bill would require the entity to obtain the individual's express written consent, as evidenced by a signature, acknowledging that the individual has received the disclosure and understands that the medical credit card is a credit card and is not a payment plan. Existing law, the Consumer Credit Reporting Agencies Act, defines and regulates consumer credit reports and consumer credit reporting agencies. Existing law regulates the treatment of medical debt in this regard by, among other things, prohibiting a consumer credit reporting agency from making any consumer credit report containing medical debt information, prohibiting a person who uses a consumer credit report in connection with a credit transaction from using medical debt as a negative factor when making a credit decision, and prohibiting a person from furnishing information regarding a medical debt to a consumer credit reporting agency. Existing law makes a violation of certain provisions related to medical debt by a person holding a license or permit issued by the state to be deemed a violation of the law governing that license or permit. Existing law, the Investigative Consumer Reporting Agencies Act, defines and regulates investigative consumer reports and investigative consumer reporting agencies. Existing law prohibits an investigative consumer reporting agency from making or furnishing any investigative consumer report containing specified items of information, including medical debt. Existing law defines "medical debt" for the purposes of the Consumer Credit Reporting Agencies Act and the Investigative Consumer Reporting Agencies Act as a debt owed by a consumer to a person whose primary business is providing medical services, products, or devices, or to the person's agent or assignee, for the provision of medical services, products, or devices, as specified. This bill would, instead, define "medical debt" for these purposes as a debt related to, in whole or in part, a transaction, account, or balance arising from a medical service, product, or device, except as provided. By changing the scope of what is considered medical debt, and because certain violations of the Consumer Credit Reporting Agencies Act are deemed a violation of a licensing statute and the violation of some licensing statutes is a crime, this bill would impose a state-mandated local program. This bill would prohibit a consumer credit reporting agency from making a consumer credit report that contains information from a medical credit card for a purchase made at specified medical facilities, including a general acute care hospital, a special hospital, or a pharmacy. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.