The Biden administration is proposing to eliminate medical debt from Americans’ credit reports, a change that could impact millions.
What Happened: Vice President Kamala Harris announced the proposed rule on Tuesday, which is being put forth by the Consumer Financial Protection Bureau. If implemented, the rule will erase medical debt from the credit reports of 46 million Americans, a figure recorded in 2020, according to NBC News.
The administration estimates that this move could potentially raise the credit scores of affected individuals by an average of 20 points. This, in turn, could lead to approximately 22,000 additional mortgages being approved annually due to the improved credit reports.
Medical debt, according to Harris, “makes it more difficult to get by, much less get ahead. That is simply not fair.”
Why It Matters: The proposal, open for public comments until Aug. 12, 2024, is expected to take effect next year at the earliest. The Consumer Data Industry Association, which represents major credit bureaus, is currently reviewing the proposal.
Earlier this year, Microsoft Co-Founder Bill Gates expressed concerns about the global decline in healthcare funding. The proposed rule could alleviate the financial burden on many Americans, especially in light of the rising medical costs.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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