State legislative records or news reports on state-level financial regulations

CFPB Removes $49 Billion Medical Debt from Credit Reports, Raising Credit Scores for Millions

Jan 7, 2025, 01:20 PM

On Tuesday, the Consumer Financial Protection Bureau (CFPB) finalized a rule that will remove medical debt from consumer credit reports. This move is expected to eliminate approximately $49 billion in unpaid medical bills from the credit reports of about 15 million Americans. The rule aims to prevent medical bills from negatively impacting individuals' ability to obtain mortgages, car loans, or small business loans. Vice President Kamala Harris announced the ban, emphasizing that no one should be denied economic opportunity due to illness or medical emergencies. The CFPB's new rule also prohibits lenders from using medical information in their decision-making processes and blocks lenders from repossessing prosthetic limbs and other medical devices. The change is estimated to raise credit scores by an average of 20 points for millions of Americans and could lead to 22,000 additional mortgages being approved annually. This action represents a significant effort by the Biden administration to alleviate the burden of medical debt on consumers and improve access to credit.