Biden Era CFPB Rule Reversed
Trump appointed Sean Jordan of Texas’s Eastern District, rules that the Consumer Financial Protection Bureau (CFPB) rule that removed medical debt from credit reports, is illegal.
Removing medical debts from consumer credit reports was expected to increase the credit scores of millions of families by an average of 20 points, the bureau said. The CFPB states that its research has shown outstanding healthcare claims to be a poor predictor of an individual’s ability to repay a loan, yet they are often used to deny mortgage applications.
The three national credit reporting agencies — Experian, Equifax, and TransUnion — announced last year that they would remove medical collections under $500 from U.S. consumer credit reports. The CFPB’s rule was projected to ban all outstanding medical bills from appearing on credit reports and prohibit lenders from using the information.
According to the agency, one in five Americans has at least one medical debt collection account on their credit reports, and over half of the collection entries on credit reports are for medical debts. The problem disproportionately affects people of color, the CFPB has found: 28% of Black people and 22% of Latino people in the U.S. carry medical debt versus 17% of white people.
The CFPB was established by Congress after the 2008 financial crisis to monitor credit card companies, mortgage providers, debt collectors and other segments of the consumer finance industry.
Earlier this year, the Trump administration requested that the agency halt nearly all its operations, effectively shutting it down.
MAGA.
Removing medical debts from consumer credit reports was expected to increase the credit scores of millions of families by an average of 20 points, the bureau said. The CFPB states that its research has shown outstanding healthcare claims to be a poor predictor of an individual’s ability to repay a loan, yet they are often used to deny mortgage applications.
The three national credit reporting agencies — Experian, Equifax, and TransUnion — announced last year that they would remove medical collections under $500 from U.S. consumer credit reports. The CFPB’s rule was projected to ban all outstanding medical bills from appearing on credit reports and prohibit lenders from using the information.
According to the agency, one in five Americans has at least one medical debt collection account on their credit reports, and over half of the collection entries on credit reports are for medical debts. The problem disproportionately affects people of color, the CFPB has found: 28% of Black people and 22% of Latino people in the U.S. carry medical debt versus 17% of white people.
The CFPB was established by Congress after the 2008 financial crisis to monitor credit card companies, mortgage providers, debt collectors and other segments of the consumer finance industry.
Earlier this year, the Trump administration requested that the agency halt nearly all its operations, effectively shutting it down.
MAGA.
