Jan 8, 2025, 11:37 AM
Jan 7, 2025, 12:00 AM

Vice President Harris removes $49 billion in medical debt from credit reports

Highlights
  • The Consumer Financial Protection Bureau has enacted regulations to remove medical debts from credit reports.
  • About 15 million Americans will benefit from the elimination of $49 billion in medical debt.
  • The new rules aim to alleviate financial struggles for millions burdened by healthcare costs.
Story

On January 6, 2025, the federal Consumer Financial Protection Bureau announced significant regulations aimed at protecting consumers from being penalized for medical debts on their credit reports. This new ruling will effectively eliminate $49 billion worth of unpaid medical debt from the credit histories of approximately 15 million Americans, bringing hope to those facing financial strain due to medical expenses. Vice President Kamala Harris underscored the importance of this ruling, emphasizing that no individual should suffer economic consequences for health-related issues. The introduction of these regulations fulfills a commitment made by the Biden administration in response to the widespread burden of health care debt, which reportedly affects around 100 million Americans. Medical debt has been associated with various detrimental effects, including the risk of homelessness and difficulties in securing loans. The changes come just days before President Joe Biden is set to leave office, presenting a challenge to the incoming Trump administration, which may attempt to reverse these regulations. Under the new rules, credit agencies are prohibited from including medical debts in credit reporting, meaning lenders can no longer consider medical information when evaluating borrowers. The CFPB indicated that these regulations may boost credit scores of those affected by medical debt by an average of 20 points. Such an increase could improve access to essential loans for many individuals and families whose credit scores have suffered due to medical expenses. Despite advancements toward providing relief, opposition from the collections industry may arise, raising concerns about potential challenges to the ruling. The new regulations reflect a broader movement across several states advocating to remove medical debt from credit reports, providing a lifeline to those struggling with financial stability. Overall, this decision represents a substantial step toward addressing the pervasive issue of medical debt in America and enabling millions to regain financial foothold.

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