The Consumer Financial Protection Bureau (CFPB) finalized a rule on Jan. 7 excluding medical debt from credit reports. CFPB estimates $49 billion in medical bills will be removed from the credit reports of 15 million Americans.
CFPB found that medical debts provide little predictive value regarding borrowers’ ability to repay other debts. The rule, effective March 17, also prohibits lenders from using medical information in their lending decisions, increases privacy protections, and prevents debt collectors from using the credit reporting system to coerce people to pay bills they do not owe.
The bureau anticipates the move will lead to the approval of approximately 22,000 additional affordable mortgages every year and an average 20-point increase in credit scores.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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