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20 sources

Biden Administration Finalizes Ban on Medical Debt in Credit Reports

The Biden administration's new rule removes medical debt from credit reports, boosting scores for millions, effective before President-elect Trump takes office.

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Summary

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The Biden administration has finalized a rule banning medical debt from credit reports, impacting 15 million Americans and raising credit scores by an average of 20 points. This measure aims to alleviate the financial burden of medical debt, allowing for an estimated 22,000 additional mortgages yearly. Despite pushback from the banking and consumer data industries, the Consumer Financial Protection Bureau enforces this rule to prevent abusive lender practices. The rule will take effect 60 days after publication in the federal register but could be reversed by the incoming Trump administration.

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From the Left

A recap of the main views or arguments shared by left-leaning sources.

  • The Biden administration's new rule will eliminate the inclusion of medical debt on credit reports, benefiting 15 million Americans by removing $49 billion in debts from their financial records.

  • This change is anticipated to provide an average credit score boost of 20 points, significantly improving access to loans for families, particularly for mortgages, car loans, and small business loans.

  • The rule is seen as a humane approach, relieving individuals from financial distress linked to medical emergencies and is part of the administration's broader effort to protect consumer rights against debt collection practices.

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From the Right

A recap of the main views or arguments shared by right-leaning sources.

  • The removal of medical debt from credit reports is viewed as a strategic move that will effectively increase financial opportunities for millions, with expectations of 22,000 additional mortgages approved each year due to improved credit scores.

  • Vice President Kamala Harris' emphasis on the rule's potential benefits reflects a proactive stance against the financial barriers faced by families with medical debt, highlighting the correlation between health issues and economic hardship.

  • While the ruling is a positive step, concerns remain that medical debt still exists and may pose ongoing challenges for those individuals, as the debts remain due despite their removal from credit records.

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