cross-posted from: https://lemmy.world/post/16427924
The Biden administration is moving to ban medical debt from credit reports.
Vice President Kamala Harris said Tuesday that the proposed rule, taken through the Consumer Financial Protection Bureau, would reduce the number of Americans with medical debt listed on their credit reports to zero, down from 46 million in 2020.
In a press call Tuesday, Harris said the move would help improve the financial health and wellbeing of millions of Americans.
Medical debt, she said, “makes it more difficult to get by, much less get ahead. That is simply not fair.”
The administration calculates that if implemented, the rule would raise affected individuals’ credit scores by an average of 20 points, and could lead to the approval of approximately 22,000 additional mortgages every year as a result of the cleaned-up credit reports.
A recent study estimated that one in five U.S. households live with medical debt, including people with health insurance; and that on average, a typical American household owes about $4,600 in medical debts.
While this is good for privacy, …
… it is disasterous for lenders trying to comprehend the risk in lending to a particular individual.
Economic-integrity requires that credit-ratings be accurate, for organizations/companies AND for individuals.
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Demand for medical care is far less elastic than demand for a lot of other things you would use credit for.
The fact that someone failed to repay exploitative medical bills for a procedure they needed to continue living isn’t particularly indicative of how likely they are to be delinquent on a car loan, for example.
