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.
Medical debt in the US has swelled in recent years, with a March 2022 CFPB report indicating that approximately 20% of US households reported having it in some form. The report was the agency’s first in which it publicly considered such debt, and Chopra said at the time the medical billing process in the US often leaves consumers in a “doom loop.
The White House has also shown interest in the topic, and the CFPB has continued to look at it since 2022. The consumer watchdog agency requested information in July on medical payment options such as credit cards, to learn more about how prevalent the sometimes-harmful products are and what damage some of their features can inflict on consumers.
The three consumer credit bureaus mentioned in the CFPB’s 2022 report — Experian Plc, Equifax Inc. and TransUnion – headed off the regulators by proactively removing more than 70% of existing medical-debt entries on credit reports. But eliminating all of it could make it harder for lenders, landlords and others to have a full picture of a potential borrower, employee or tenant’s creditworthiness, debt-collection and credit-reporting groups say.
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