Impact of Medical Debt on Consumers: Federal Judge Overturns CFPB Rule
Impact of Medical Debt on Credit Reports
A federal judge has blocked a rule issued by the Consumer Financial Protection Bureau (CFPB) in January that would have removed unpaid medical debt from the credit reports of about 15 million consumers. The ruling, issued by Judge Sean Jordan of the U.S. District Court of Texas' Eastern District, orders that the rule be vacated due to the court's finding that the CFPB exceeded its authority under the Fair Credit Reporting Act.
Implications for Consumers
The court's decision could impact the roughly 15 million people carrying about $49 billion in medical debt on their credit reports. This burden influences whether lenders will extend loans such as mortgages or auto loans. When the CFPB issued the rule, the agency highlighted that medical debt poorly predicts whether a consumer will fulfill other loan obligations.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.