Industries File Lawsuits Against Banning Medical Debt From Credit Reports

The legislation prevents lenders from using certain medical information in loan decisions.

The Biden administration’s rule to ban medical debt from impacting credit reports is now facing opposition.

Two industry groups filed lawsuits last week in an attempt to block the rule, which was finalized by the Consumer Financial Protection Bureau. A leading House Republican lawmaker has also promised to take action on the ban.

The legislation ends the inclusion of medical debt on credit reports. That prevents lenders from using certain medical information in loan decisions.

It is expected to remove an estimated $49 billion in medical bills from the credit reports of nearly 15 million consumers.

The move aims to raise credit scores and make it easier from people to obtain mortgages.

The measure is set to take effect 60 days after it is published in the Federal Register.

However, those against it, argue that the rule violates the fair credit reporting act. They also argue the bureau lacks the authority to issue such a ban.