Medical Debt Banned from Credit Reports Under New Bill
A new rule announced Tuesday by the Biden administration bans medical debt and unpaid bills from credit reports. Unpaid medical bills will no longer appear on reports, where they can block people from getting mortgages or necessary loans.
Today, the Consumer Financial Protection Bureau finalized a rule that will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans. The CFPB’s action will ban the inclusion of medical bills on credit reports used by lenders. Furthermore, it will prohibit lenders from using medical information in their lending decisions.
How will the Ban on Medical Debt on Credit Reports Affect Americans?
According to the Bureau, the change is estimated to raise credit scores by an average of 20 points. Additionally, the new rule may lead to 22,000 additional mortgages being approved every year. “People who get sick shouldn’t have their financial future upended,” said CFPB Director Rohit Chopra. “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.”
According to the final rule, lenders are strictly prohibited from considering medical information in credit reports, and medical bills are banned from appearing on credit reports altogether. The new rule will be The rule will be effective 60 days after publication in the Federal Register.
Also Read: President-Elect Donald Trump: “We Will Cut Taxes, Boost Incomes”
Vice President Kamala Harris said in a statement announcing the rule that it would be “life-changing” for millions of families, “making it easier for them to be approved for a car loan, a home loan, or a small-business loan. … Our historic rule will help more Americans save money, build wealth, and thrive.”
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” she added. With Trump’s administration set to take office soon though, Republicans in Congress demand the Biden administration stop issuing new rules. Therefore, this new rule may be reversed upon Trump’s inauguration, although his stance on the rule is unclear.
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Medical Debt Banned from Credit Reports Under New Bill
A new rule announced Tuesday by the Biden administration bans medical debt and unpaid bills from credit reports. Unpaid medical bills will no longer appear on reports, where they can block people from getting mortgages or necessary loans.
Today, the Consumer Financial Protection Bureau finalized a rule that will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans. The CFPB’s action will ban the inclusion of medical bills on credit reports used by lenders. Furthermore, it will prohibit lenders from using medical information in their lending decisions.
How will the Ban on Medical Debt on Credit Reports Affect Americans?
According to the Bureau, the change is estimated to raise credit scores by an average of 20 points. Additionally, the new rule may lead to 22,000 additional mortgages being approved every year. “People who get sick shouldn’t have their financial future upended,” said CFPB Director Rohit Chopra. “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.”
According to the final rule, lenders are strictly prohibited from considering medical information in credit reports, and medical bills are banned from appearing on credit reports altogether. The new rule will be The rule will be effective 60 days after publication in the Federal Register.
Also Read: President-Elect Donald Trump: “We Will Cut Taxes, Boost Incomes”
Vice President Kamala Harris said in a statement announcing the rule that it would be “life-changing” for millions of families, “making it easier for them to be approved for a car loan, a home loan, or a small-business loan. … Our historic rule will help more Americans save money, build wealth, and thrive.”
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” she added. With Trump’s administration set to take office soon though, Republicans in Congress demand the Biden administration stop issuing new rules. Therefore, this new rule may be reversed upon Trump’s inauguration, although his stance on the rule is unclear.
Read More