In a sweeping change that could improve millions of Americans' ability to own a home or buy a car, the Biden administration will propose a rule Tuesday to ban medical debt from credit reports.
The rule, which will be announced by Vice President Kamala Harris and Consumer Financial Protection Bureau Director Rohit Chopra, comes as President Joe Biden beefs up his efforts to convince Americans his administration is lowering costs, a chief concern for voters in the upcoming election.
The rule, which has been in the works since September, could go into effect sometime next year, Chopra told ABC News in an exclusive interview ahead of the policy announcement.
"Our research shows that medical bills on your credit report aren't even predictive of whether you'll repay another type of loan. That means people's credit scores are being unjustly and inappropriately harmed by this practice," Chopra said.
CFPB's research estimates that the new rule would allow 22,000 more people to get approved for safe mortgages each year - meaning lenders could also benefit from the positive impact on peoples' credit scores, by being able to approve more borrowers.
