Judge nixes wiping medical debt from credit checks
Medical debt can now be included in credit reports
What happened
A Texas judge Tuesday ruled that medical debt can be included in credit reports, potentially making it harder for many people to secure mortgages or other loans.
The ruling vacated a policy announced during the Biden presidency that would have removed nearly $50 billion in medical bills from credit reports of some 15 million people, said CNN. The judge found that the policy overstepped the Consumer Financial Protection Bureau's legal authority.
Who said what
"Every major substantive provision" of the Biden-era policy exceeded the CPFB's mandate, said Texas Eastern District Court Judge Sean Jordan, who was nominated to his seat by President Donald Trump in 2019.
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Removing medical debt from credit reports was expected to "increase the credit scores of millions of families by an average of 20 points," said The Associated Press. Republicans had "voiced opposition" to the policy "soon after it was proposed last August," claiming that it could "undermine underwriting processes" and "increase risk in the financial system," said CNN.
What next?
The ruling likely makes it harder for some people to get a loan, said Fortune. It also comes after the Trump administration ordered a series of dramatic cuts to CFPB operations earlier this year, said the AP, "effectively shutting it down."
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Jessica Hullinger is a writer and former deputy editor of The Week Digital. Originally from the American Midwest, she completed a degree in journalism at Indiana University Bloomington before relocating to New York City, where she pursued a career in media. After joining The Week as an intern in 2010, she served as the title’s audience development manager, senior editor and deputy editor, as well as a regular guest on “The Week Unwrapped” podcast. Her writing has featured in other publications including Popular Science, Fast Company, Fortune, and Self magazine, and she loves covering science and climate-related issues.
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