Biden Administration Eyes Banning Medical Debt in Credit Reports
- CFPB is fashioning a rule to impose on credit-reporting firms
- About 20% of US households are grappling with it in some form
The CFPB’s move Thursday is part of a broader effort to update the Fair Credit Reporting Act, a 1970 law governing the credit-reporting industry.
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Medical debt would be scrubbed from consumers’ credit reports under a proposal financial regulators are considering, an effort to aid millions of US households grappling with hefty outstanding bills.
The US Consumer Financial Protection Bureau said Thursday it’s starting to fashion a rule that would ban credit-reporting companies from including the debt, while also stopping lenders from considering it when deciding whether to allow a consumer to borrow. The rule would also halt coercive repayment practices, according to a CFPB statement Thursday.