Rule Finalized to Remove All Medical Debt From Credit Reports

Rule Finalized to Remove All Medical Debt From Credit Reports

On January 7, 2025, the Consumer Financial Protection Bureau (CFPB)
finalized a rule that will remove an estimated $49 billion in medical bills from
the credit reports of about 15 million Americans. The CFPB’s action will ban
the inclusion of medical bills on credit reports used by lenders and prohibit
lenders from using medical information in their lending decisions. The rule
will increase privacy protections and prevent debt collectors from using the
credit reporting system to coerce people to pay bills they don’t owe. The
CFPB has found that medical debts provide little predictive value to lenders
about borrowers’ ability to repay other debts, and consumers frequently report receiving
inaccurate bills or being asked to pay bills that should have been covered by insurance or
financial assistance programs. The rule will be effective 60 days after publication in
the Federal Register.