US Bans Medical Debt on Credit Reports

The Biden administration, through the United States — Consumer Financial Protection Bureau, finalized a rule to ban unpaid medical bills from appearing on credit reports. This change will remove an estimated $49 billion in medical debt from the credit reports of over 15 million Americans, potentially raising their credit scores by an average of 20 points and leading to 22,000 additional mortgages annually. Vice President Kamala Harris emphasized the 'lifechanging' impact of this rule, which aims to prevent medical emergencies from hindering economic opportunities. While consumer groups like Community Catalyst have praised the move, some Republican lawmakers and organizations like the Bank Policy Institute have expressed concerns about its potential to weaken credit report accuracy and increase financial system risk. The rule also builds on previous actions by major credit reporting agencies Experian, Equifax, and TransUnion to remove certain medical debts.