As Congress cracks down on harmful practices from lenders that would increase consumers’ credit card debt, so too is the state of New York.
According to a report in the Wall Street Journal, state attorney general Andrew Cuomo has issued subpoenas to JP Morgan Chase and Citigroup as part of an investigation into the rise of credit cards for health care, which are offered by major lenders through care providers. Cuomo said that this is predatory lending because providers typically try to pressure consumers with sales pitches.
The report said that Cuomo also feels the relationship between health care provider and credit card issuer is a “kickback arrangement,” because providers pay a fee to be able to offer the cards, then get some of that money back in the form of rebates based on how much money they generate through sales on them.
A New York Post report said that the program, CareCredit, is accepted by more than 125,000 health care practices across the country, and is endorsed by the American Dental Association.