OAN’s Abril Elfi
2:18 PM – Friday, September 22, 2023
The Biden Administration has announced their plans to erase medical debt records from consumer credit reports.
On Thursday, the Consumer Financial Protection Bureau (CFPB) outlined its proposed rules to keep unpaid medical bills from affecting patient’s credit scores. The bureau reportedly expects to issue a proposed rule next year.
Vice President Kamala Harris spoke on the matter, stating that more than 100 million Americans have unpaid medical debt.
She also stated how medical debts have lowered residents’ credit scores which affects their ability to buy a home, get a mortgage or own a small business.
“We know credit scores determine whether a person can have economic health and well-being, much less the ability to grow their wealth,” she said. “Today, we are offering a solution to fix this problem … Together, these measures will improve the credit scores of millions of Americans so that they will better be able to invest in their future.”
If the rule is approved, consumer credit companies will be prohibited from including medical debt and collection information on reports used by creditors to make underwhelming decisions.
When reviewing borrowers’ loan applications, creditors would only be authorized to evaluate non-medical information. The agency also stated that debt collectors would no longer be able to use the inclusion of medical debt on credit reports as leverage to compel individuals into paying questionable invoices.
CFPB Director Rohit Chopra also spoke on the function of the proposals saying how if someone is sick they should be focusing on getting better.
“Research shows that medical bills have little predictive value in credit decisions, yet tens of millions of American households are dealing with medical debt on their credit reports,” Chopra said. “When someone gets sick, they should be able to focus on getting better, rather than fighting debt collectors trying to extort them into paying bills they may not even owe.”
Chopra also stated how many of these health care bills contain mistakes that often overburden families.
“Families are often barraged with a string of confusing and error-ridden bills, and too many of us have ended up in a doom loop of disputes between insurance companies and health care providers,” he said. “These bills, even ones where the patient doesn’t owe anything further, can end up being reported on the patient’s credit report.”
The White House also has been looking into lessening American’s medical bills debts as part of an effort to help people contend with inflation and the higher cost of living.
CFPB is also reportedly looking into medical bill practices, including medical credit cards and installment loans.
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