Federal judge reverses rule that would have removed medical debt from credit reports
In a recent ruling, a federal judge in Texas overturned a rule established by the Consumer Financial Protection Bureau (CFPB) during the Biden administration. This rule aimed to remove medical debt from credit reports.
Judge Sean Jordan, appointed by Trump, deemed the rule to be beyond the CFPB’s authority, citing that the Fair Credit Reporting Act prohibits the removal of medical debt from credit reports.
The CFPB’s proposed rule, if implemented, was expected to boost the credit scores of millions of families by an average of 20 points. The agency argued that outstanding medical bills are not a reliable indicator of an individual’s loan repayment ability, yet they are often used to deny mortgage applications.
Last year, the three major credit reporting agencies—Experian, Equifax, and TransUnion—announced their decision to remove medical collections under $500 from U.S. consumer credit reports. The CFPB’s rule, if implemented, would have prohibited the appearance of all outstanding medical bills on credit reports and prevented lenders from using this information.
Credit Debt Federal Judge Medical Removed Reports Reverses Rule
