Financial institutions will not be able to take into account Americans' overdue debts arising from medical treatment. Records of medical debts amounting to $49 billion will disappear from the credit information of 15 million people. Banks opposed this regulation.
The Consumer Financial Protection Bureau (CFPB) announced Tuesday that when assessing the creditworthiness of loan applicants,
Vice President Kamala Harris said in a statement that the decision would “change the lives of millions of families.”
“No one should be deprived of economic opportunity because they have an illness or a medical emergency,” Harris said.
Records of medical debts amounting to $49 billion will disappear
Thanks to the decision of the Consumer Financial Protection Bureau (CFBP) – an independent regulatory agency established after the financial crisis of 2007-2008, responsible for protecting the rights of consumers in the financial sector – records of medical debts will be removed from the credit information of 15 million Americans, reaching USD 49 billion. The introduction of the ban is the fulfillment of the outgoing president's election promise Joe Biden – noted Reuters.
The new regulation was opposed by Republican members of Congress, demanding that this step be postponed just before the power in the White House was transferred to the hands of Donald Trump. This signals that the regulations can be canceled as soon as Trump takes office, explained the Washington Post website.
Additional creditworthiness of Americans
The ban introduced on Tuesday applies to credit information companies that collect detailed data on consumers and make them available to banks, employers and real estate owners to enable them to assess a person's financial situation. Under the new policy, companies that obtain a customer's credit history cannot judge her application based on unpaid medical debts. The regulations do not write off health-related debts, the portal emphasized.
According to the CFPB, thanks to the change, Americans will be able to receive an additional 22,000 annually. mortgage loans.
The new regulation will also prevent attempts to force consumers to pay off medical debts they did not actually incur, the CFPB said. The Bureau believes that many past due debts have incorrect balances. They contain amounts already paid or amounts that are significantly higher than actual debts.
The American Medical Association supported the change, but banking and credit organizations do not agree with it. They claim that the change in law will hide important information from them, thanks to which they could assess the risk of borrowers.
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