US bans medical debt from credit reports as Biden nears exit
Al Jazeera
Consumer Financial Protection Bureau says change will strike $49bn in medical debt from credit reports.
Consumers in the United States will no longer have medical debt appear on their credit reports under changes that will make it easier for millions of Americans to obtain loans.
The new rule means that lenders will be barred from using medical information in their lending decisions, the Consumer Financial Protection Bureau (CFPB) said on Tuesday.
Under the change, an estimated $49bn in medical debt will be struck from the credit reports of more than 15 million Americans, the CFPB said.
The consumer watchdog said that its research showed that medical debt is a poor predictor of whether a loan will be repaid and that it expects the change to result in the approval of approximately 22,000 additional mortgages every year.
“People who get sick shouldn’t have their financial future upended,” CFPB Director Rohit Chopra said in a statement.
