Biden Administration Moves to Ban Medical Debt from Credit Reports

This is more nuanced than even the CFPB is letting on. It’s more privacy than financial regulation.

“The proposal would continue to permit creditors to obtain or use” medical information “for credit availability determinations” if “the creditor uses the information in the same manner and to the same extent it would comparable non-medical information” [1].

Sounds like there is a business opportunity in collecting medical-debt data, stripping it of the “consumer’s physical, mental, or behavioural health condition, history, treatment type, or prognosis” and then presenting it back to creditors.

[1] https://files.consumerfinance.gov/f/documents/cfpb_fast-fact...

If you make credit reports less informative, the natural consequence is to make the result of extending credit less predictable, and therefore make the cost of credit higher and the availability lower. I do not assert that the costs are greater than the benefits of such a policy, but I do think that attempts to define and measure those effects should inform the policy.

From a quick skim, this seems like the interesting part:

> The bureau has found that having medical debt on a credit report is not a good predictor of whether a borrower will repay a loan, and that consumers frequently report receiving inaccurate bills.

If true, then keeping fairly-useless & junk information out of credit reports is a pretty good idea.

This is a bad non-solution to the healthcare issues in the USA