Biden administration bans medical debt from credit reports

With less than two weeks left of Joe Biden's presidency, the administration announced a new rule Tuesday that could lift the credit scores of millions of Americans. The finalized rule will not only stop medical debt from being included on credit reports, it would also ban lenders from using certain medical information in loan decisions. The rule comes despite objections from the banking and consumer data industries and will eliminate an estimated $49 billion in medical bills from the credit reports of about 15 million Americans. That's according to the Consumer Financial Protection Bureau. The rule also bans lenders from using medical devices like wheelchairs or prosthetic limbs as collateral for loans and bars them from repossessing the devices if patients are not able to repay the loans. Lenders will still be able to consider medical information in certain situations though, like when the loan would be used to pay health expenses. That info could also be used if a person asks for a temporary postponement of loan payments for medical reasons. The CFPB says the measure will boost the credit scores of people with medical debt by 20 points on average. It's also expected to lead to the approval of 22,000 additional mortgages a year. The rule will take effect 60 days after it's published in the Federal Register. However, the Trump administration could undo it because Congress has the opportunity to review and rescind final rules. President-elect Donald Trump is set to be inaugurated on January 20th. Stay up to date on this story and all the major headlines by downloading the Straight Arrow News app.