Official announcements from Congress or court rulings

CFPB Erases $49 Billion Medical Debt from Credit Reports of 15 Million Americans

Jan 7, 2025, 02:24 PM

The Consumer Financial Protection Bureau (CFPB) has finalized a rule that will remove medical debt from consumer credit reports, eliminating $49 billion in unpaid medical bills from the records of about 15 million Americans. The rule ends the practice of parking medical bills on credit reports and blocks lenders from repossessing prosthetic limbs and other medical devices. It will prevent medical bills from being included on credit reports used by lenders and prohibit lenders from using medical information in their decision-making. Vice President Kamala Harris announced the move, stating, "No one should be denied economic opportunity because they got sick or experienced a medical emergency." The change is expected to improve credit scores by an average of 20 points, potentially leading to 22,000 additional mortgages being approved each year. The Biden administration's action aims to ensure that individuals are not penalized financially due to medical emergencies, though Republican lawmakers and the credit reporting industry may push to overturn the changes.