OHIO — Americans facing additional burdens because of medical debt on their credit reports are expected to get a reprieve now that a new regulatory ban has been adopted. 

What You Need To Know

  • The U.S. Consumer Financial Protection Bureau announced a ban on medical debt appearing on credit reports
  • The American Medical Association endorsed the ban based on studies its done on borrowing and lending patterns 
  • Keeping medical debt off of their credit report would not affect someone’s ability to borrow when making other purchases 

“The rationale is that people should not have economic consequences for a medical event that’s possibly beyond their control,” said Spectrum News 1 Legal Analyst Rory Riley-Topping.

She said that essentially; it helps consumers maintain control of their borrowing power without being penalized because of medical debt, which is good news. 

At the same time, there is a chance, as with any other new administration entering the White House, that this policy and others could be overturned. Riley-Topping said, so far Elon Musk has proposed eliminating the Consumer Financial Protection Bureau. Plus, from her perspective, the legal battle concerning this move has already started.

“The Consumer Data Industry Association and Cornerstone Credit Union League have already filed a lawsuit in a federal court in Texas saying that this provision violates the Fair Credit Reporting Act, which mandates the reporting of certain types of debt,” said Riley-Topping.

The judge assigned to the case is a Trump appointee, which she believes might spell trouble for the future of this regulation.