Biden admin's CFPB proposes banning medical debt from credit reports

The Biden administration announced a proposed rule that would ban medical-related debt from credit reports.

"The proposal would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical information," read a Consumer Financial Protection Bureau news release on Tuesday. "The proposed rule is part of the CFPB’s efforts to address the burden of medical debt and coercive credit reporting practices."

CFPB Director Rohit Chopra said the bureau is "seeking to end the senseless practice of weaponizing the credit reporting system to coerce patients into paying medical bills that they do not owe.”

Chopra also said that "medical bills on credit reports too often are inaccurate and have little to no predictive value when it comes to repaying other loans."

Vice President Kamala Harris said that "one of the most significant consequences of carrying medical debt is the harm it does to a person’s credit score.”