During the Biden Administration, the Consumer Financial Protection Bureau (CFPB) passed a rule banning credit agencies from including medical debt on people’s credit reports. The final rule was set to go into effect on March 17, 2025. But, Evan Weinberger reports for Bloomberg Law News that Republicans in Congress are working to repeal this consumer protection.
Congressmen from South Dakota and South Carolina aim to ensure the CFPB rule never goes into effect. They call it “irresponsible and a clear example of regulatory overreach.” They have the power to repeal the federal rule with a simple majority vote.
As of now, President Trump delayed the rule’s start date. Moreover, a federal judge in Texas ruled in favor of a credit reporting agency group to delay the start date until June 15 unless Congress or the CFPB repealed it before then.
The CFPB rule improves credit scores by around 20 points. According to the CFPB, around 15 million Americans have medical debt totaling $49 billion. That’s likely a conservative estimate. Others have reported that older adults alone owe $54 billion in medical debt.
The rule’s repeal would make it harder and more expensive for people with medical debt to get credit. The Congressmen who oppose this consumer protection argue that banks and others who make loans cannot make informed decisions about whether a person is creditworthy if this CFPB rule goes into effect.
Here’s more from Just Care:
- Older adults owe $54 billion in medical debt
- Millions of adults still carry significant student debt
- New bill in Congress would cancel medical debt
- Medical debt is a profit center for banks and private equity
- Medical debt more prevalent among Medicare Advantage enrollees than traditional Medicare enrollees
