US banks may allow borrowers to pay for their own doctor’s medical expenses with personal loans that are less than 30% of their home mortgages, US financial regulators said on Thursday.
The Federal Reserve, the Financial Stability Oversight Council and the Office of Thrift Supervision, the two regulators overseeing the nation’s banking sector, are proposing rules that will require banks to allow borrowers with medical debt payments to borrow money directly from lenders with lower-than-30% mortgages.
The proposals are aimed at addressing concerns about banks’ ability to meet the debt obligations of medical professionals and other borrowers.
They say the change would ease pressure on banks to make loans to medical professionals to avoid a risk of default, but it would also reduce the ability of lenders to take on debt.
The move is a blow to the banking industry, which is already under pressure to reduce costs by reducing loan types and raising the interest rates on their loans.
Banks are already struggling to service the massive amounts of medical debt, particularly for the chronically ill, who need intensive care treatment.
“If we have to reduce the cost of loans for medical professionals, that’s the wrong place to do it,” said Elizabeth McKeon, a professor at Washington University in St Louis who has studied the issue.
“Banks are not going to be able to make up for that shortfall with a larger loan pool.”
The move comes after the US House of Representatives passed legislation this year that would have required banks to increase the minimum payment on medical debt from 30% to 40%.
The changes in the Federal Reserve’s proposed rules are part of an effort to rein in the banks’ growing regulatory burdens and reduce their ability to overcharge consumers, which has been a source of frustration for many Americans who are increasingly reliant on the financial system.
The rules are also a response to concerns about the financial industry’s inability to meet their obligations to consumers and their ability, and willingness, to make hard choices to reduce risks to the health of their loved ones.
The proposal comes as banks are increasingly turning to a new, less risky form of financing.
In the last few years, some of the largest banks, including JPMorgan Chase and Bank of America, have been using advances from personal loans to make payments to their medical staff.
The banks’ new approach to borrowing from medical professionals is designed to make them more efficient and cost-effective, said Josh Bivens, a senior research associate at the Economic Policy Institute, a left-leaning Washington think tank.
But the new rules also pose a threat to the ability for banks to serve as a lender to the underserved, Bivans said.
The new rules would likely discourage the use of these personal loans as a way to reduce loan defaults and increase the availability of credit for consumers who need it most.
“These new rules are really just the first steps in a larger effort by the banks to further restrict the ability to borrow,” Bivins said.
A person who has been diagnosed with a chronic disease and can’t pay their medical bills and can not qualify for a private loan to care for a loved one could still have to take out a loan to help pay their bills.
But that person would not be able do so through the financial institution they normally would be able through.
While the proposed rules would require banks, for the first time, to require loans from medical institutions with lower loans to be repaid in full, the proposal does not say if banks will require loans with a 30% rate to be repayable in full.
Banks have historically been able to borrow from medical entities with lower loan rates.
But in recent years, banks have been increasingly looking for ways to offer less expensive forms of financing to their staffs, which would allow them to pay down the debt.
In the latest report from the Federal Deposit Insurance Corporation, a government agency that monitors the federal safety net, banks reported that the average annual cost of paying off a loan on a home loan is $8,828.
For the average medical debt payment, the average cost is $3,087.
Since the financial crisis, many borrowers have been relying on the banks for assistance with their medical debt.
Some banks have made significant savings on their medical loan payments by charging lower interest rates, while others have increased the rate to cover the higher medical costs.
Some analysts have said that the new regulations would make it harder for borrowers to borrow at lower interest rate, as the rate on a 30-year mortgage would go up to as high as 11.5%.
The Federal Deposit insurance Corporation estimated in a report in January that more than half of the mortgages on average held by people with medical debts were under 30% and that over half of those loans were over 30%.
“It’s going to have a lot of negative impact on the health and safety of the financial institutions,” said David Karr, a