Biden Administration Announces Rule For Medical Debt Relief
Biden Administration Announces Rule To Remove Medical Debt From Credit Reports
As President Biden and his administration prepare to leave the White House, they have announced a new rule to block medical debt from Americans’ credit reports.
According to the Consumer Financial Protection Bureau (CFPB), approximately 15 million American citizens own more than $49 billion in medical debt due to an injury or illness. The new policy, which was proposed in June of 2023, will prevent credit agencies from listing medical debts on consumers’ credit reports and stop lenders from using medical information when evaluating borrowers.
“People who get sick shouldn’t have their financial future upended,” said CFPB’s 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.”
States like Colorado, New York and California have already passed legislation prohibiting medical debt from being including on a residents’ credit report and now the federal government is following suit. However, the rule could be overturned when President-Elect Donald Trump takes office on January 20. Many Republicans have criticized CFB, even calling for the elimination of the agency.