Before Joe Biden and Kamala Harris’ administration leaves office to make way for President-elect Donald Trump, they have announced that they will remove $49 billion in medical debt from 15 million Americans’ credit reports, as a new federal rule prohibits credit agencies from reporting unpaid medical bills, which have been preventing people from obtaining mortgages, car loans, small business loans, and other loans.
On Tuesday (January 7), the Consumer Financial Protection Bureau (CFPB), which has helped protect consumer interests for 13 years and returned $17.5 billion to millions of Americans’ pockets, announced a new federal rule requiring credit agencies to remove medical debt from credit reports, resulting in an average 20-point credit score boost and approximately 22,000 additional mortgages per year.
In response to the new ruling, which is expected to benefit 15 million Americans, Joe Biden and Kamala Harris’ administration announced on Tuesday (January 7) that they will cancel $49 billion in medical debt.
According to a White House fact sheet, “Under the CFPB rule, there will be no Americans with medical debt on their credit reports, down from 46 million in 2020.” … 15 million Americans still have $49 billion in outstanding medical bills in collections, according to the credit reporting system.
The action will remove the outstanding $49 billion in unpaid medical bills from the credit reports of the remaining 15 million affected Americans.
In response to the news, DNC Rapid Response Director Alex Floyd stated, “Thanks to the Biden-Harris administration, no American will be denied a mortgage or a small business loan due to medical debt.”
This life-changing CFPB rule will remove $49 billion in medical debt from over 15 million Americans’ credit reports, allowing hardworking families to save money and build wealth even during medical emergencies.”
He went on: “While Donald Trump and his billionaire Cabinet focus on rigging the economy for their ultra-wealthy special interest backers and threaten to gut the CFPB’s critical protections for millions of Americans, Democrats are fighting every day to help the American people thrive.”
According to a 2024 poll conducted by Peterson-KFF, a nonprofit organization that researches health policy issues, approximately one in every twelve adults in the United States has medical debt.
In response, the Consumer Financial Protection Bureau determined that a medical bill on a person’s credit report was an unreliable predictor of whether or not they would repay a loan; however, the debt resulted in thousands of denied mortgage applications.
