The Consumer Financial Protection Bureau (CFPB) issued new regulations barring medical debts from American credit reports, a significant consumer protection measure days before President Biden's term concludes. The rules aim to prevent credit agencies from including medical debts and lenders from considering medical information during loan assessments. This move challenges the incoming Trump administration to overturn these popular regulations that could benefit millions burdened by medical debt.
The federal Consumer Financial Protection Bureau on Tuesday issued new regulations barring medical debts from American credit reports, enacting a major new consumer protection just days before President Joe Biden is set to leave office. The rules ban credit agencies from including medical debts on consumers' credit reports and prohibit lenders from considering medical information in assessing borrowers.
These rules, which the federal watchdog agency proposed in June, could be reversed after President-elect Donald Trump takes office Jan. 20. But by finalizing the regulations now, the CFPB effectively dared the incoming Trump administration and its Republican allies in Congress to undue rules that are broadly popular and could help millions of people who are burdened by medical debt. 'People who get sick shouldn't have their financial future upended,' CFPB Director Rohit Chopra said in announcing the new rules. 'The CFPB's final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe.' The regulations fulfill a pledge by the Biden administration to address the scourge of health care debt, a problem that touches an estimated 100 million Americans, forcing many to make sacrifices such as limiting food, clothing, and other essentials. Credit reporting, a threat that has been wielded by medical providers and debt collectors to get patients to pay their bills, is the most common collection tactic used by hospitals, a KFF Health News analysis found. The impact can be devastating, especially for those with large health care debts. There is growing evidence, for example, that credit scores depressed by medical debt can threaten people's access to housing and drive homelessness. People with low credit scores can also have trouble getting a loan or can be forced to borrow at higher interest rate
CONSUMER PROTECTION MEDICAL DEBT CREDIT REPORTS BIDEN ADMINISTRATION TRUMP ADMINISTRATION
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