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CFPB Removes $49 Billion in Unpaid Medical Bills from Credit Reports of 15 Million Americans

Jan 7, 2025, 11:56 AM

The Consumer Financial Protection Bureau (CFPB) on Tuesday finalized a rule that removes unpaid medical bills from consumer credit reports, potentially improving the credit scores of millions of Americans. The new regulation eliminates an estimated $49 billion in medical debt from the credit reports of about 15 million individuals and ends the practice of parking medical bills on credit reports. Under the rule, medical bills can no longer be included on credit reports used by lenders, and lenders are prohibited from using medical information in their decision-making processes. The change aims to prevent unpaid medical bills from blocking access to mortgages, car loans, or small business loans. Vice President Kamala Harris, for whom assisting Americans burdened by medical debt has been a significant cause, announced the ban, stating, “No one should be denied economic opportunity because they got sick or experienced a medical emergency.” CFPB Director Rohit Chopra said the rule also blocks lenders from repossessing prosthetic limbs and other medical devices. While the Biden administration hails this move as a significant step toward economic fairness, Republican lawmakers and the credit reporting industry may push to overturn the changes.