New regulation could potentially help millions of Americans land a job, rent an apartment or qualify for a car loan.
Medical debt will be stricken from credit reports in a change proposed by the White House that could help millions of Americans land a job, rent a home or obtain a car loan.
Vice President Kamala Harris and Rohit Chopra, director of the Consumer Financial Protection Bureau, formally announced the proposal to take unpaid medical bills off the table in determining one’s credit worthiness in a news conference on Tuesday.
The idea is to no longer “unjustly punish people for getting sick”, Chopra said. He noted the potential financial damage caused by one trip to a hospital emergency room, a debt “taken on unexpectedly and in a time of crisis.”
Further, CFPB researchers have found that medical debt, unlike other kinds of debt, does not accurately predict a consumer’s creditworthiness, rendering it virtually useless on a credit report.
Even so, medical debt results in thousands of denied applications on mortgages that consumers would repay, the agency said. The CFPB expects the proposed rule would lead to the approval of approximately 22,000 additional, safe mortgages each year, it stated.
