Press Releases
Watchdog: Biden Admin Rule Scrubbing Medical Debt from Credit Reports Just the Break Millions of Families Need
WASHINGTON, D.C. – Following its launch of a major crackdown against abusive credit card industry junk fees that has already saved consumers billions of dollars, the Consumer Financial Protection Bureau (CFPB) is out with a historic new rule today eliminating burdensome medical bills from most credit reports – building on the agency’s success helping everyday families and honest businesses get ahead. Government watchdog Accountable.US warned the greedy debt collection and credit reporting industry will likely try to obstruct the action that erases as much as $49 billion worth of medical debts unfairly tarnishing credit scores.
Tens of millions of Americans are currently saddled with often-inaccurate medical debt that unfairly diminishes their credit health. Despite overwhelming data showing medical bills have negligible predictive value in credit decisions, a previous Accountable.US review found that top debt collection trade group ACA International has spent over $2 million on lobbying during the COVID-19 pandemic, including against efforts to address medical debt collections and credit reporting that are entrapping millions of Americans into financial turmoil and impacting their ability to improve their credit scores and access credit products and medical care. Adding insult to injury, the financial industry has sought to pad their profits by pushing high-cost financial products onto struggling Americans patients with medical debt, usually with interest rates often exceeding 25%.
The Consumer Financial Protection Bureau’s action scrubbing medical debt from credit reports will be a lifeline for millions of Americans trying to get above water, especially those recovering from sickness or injury. No American should be kept from buying a new car or home because of a credit report smeared by often-inaccurate medical debt that has virtually no bearing on how financially responsible they are. Yet shady and ruthless debt collectors notorious for fudging numbers and pinning debt on the wrong people have spent millions lobbying to keep the system broken in favor of higher profits. This is yet another reminder why Americans benefit from having a strong independent consumer watchdog in their corner.”
