Biden Administration Removes Medical Debt from Credit Reports

The Biden administration has announced a final rule that will remove unpaid medical bills from credit reports, impacting over 15 million Americans and eliminating $49 billion in medical debt. This change, implemented by the Consumer Financial Protection Bureau (CFPB), is expected to boost average credit scores by 20 points and facilitate approximately 22,000 additional mortgage approvals annually. Vice President Kamala Harris emphasized that this measure would be 'life-changing' for families, ensuring that health-related financial challenges do not hinder economic opportunities. The rule's introduction comes amid criticism from Congressional Republicans and financial industry groups, who argue it may overlook valuable risk indicators for lenders. Additionally, Harris noted that more than $1 billion in medical debt has already been alleviated through state and local pandemic aid efforts. The CFPB's decision aligns with a broader initiative to better support Americans facing financial hardships due to medical expenses.