INDUSTRY NEWS
Consumer Finance Protection Bureau (CFPB) Starts Process to Eliminate Medical Bills from Credit Reports
The proposal by the CFPB to remove medical bills from credit reports comes on the heels of a July 2022 decision by the three major credit reporting firms to remove most medical debt from consumers' credit reports.
The CFPB has now gone a step further, announcing the launch of a rulemaking process aimed to completely remove medical debt entirely from credit reports. The CFPB has found that medical billing data on credit reports is less valuable in predicting future repayment and that medical billing inaccuracies and mistakes are very common.
The CFPB's proposal would remove medical bills from consumer credit reports entirely, and prohibit creditors from using medical collections information to evaluate a credit application. If finalized, this ruling will impact the 20% of Americans who reported medical debt. If this rule is enacted, employers who run credit reports for employment purposes would not expect to see any medical debt collection tradelines on an employee's or applicant's consumer report.
Source: CFPB Small Business Advisory Review Panel for Consumer Reporting Rulemaking
Posted: October 3, 2023
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