‘Midnight Rulemaking’ From Liz Warren’s Favorite Agency Spells Even More Bad News For Cash-Strapped Americans

— The Rogue Dermatologist (@YuvalBibiMDArt) January 7, 2025

The rules are part of a broader regulatory push from the Biden administration that brought the total costs of federal regulations to a record $2.1 trillion in 2023, according to the Competitive Enterprise Institute.

Republican lawmakers have decried the rule following its finalization.

“This is a classic example of the CFPB failing to live up to its name,” Antoni said. “Everything it does harms consumers financially, instead of protecting them.”

A CFPB spokesperson also told the DCNF “The credit reporting industry has recognized how medical bills can decrease trust in credit scores,” and has “already decreased its reliance on medical bills in credit reports.” However, Equifax — the second-largest credit bureau in the U.S. — explicitly requested the agency withdraw the rule prior to its finalization, arguing in a comment letter that the CFPB did not provide sufficient evidence to prove medical debts are inaccurately reported or that medical debt information is not an effective indicator of creditworthiness, therefore making the rule “arbitrary and capricious.”

CFPB Finalizes Rule to Remove Medical Bills from Credit Reports This is not “merely” a death blow to medicine in the United States. If this goes unchallenged – it’ll lead to national collapse dragging the rest of the world down the drain with it.@realDonaldTrump it’s now or… pic.twitter.com/KpYAztUlcu

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“Removing medical information will reduce the predictive accuracy of credit scores for certain borrowers,” Peter Earle, senior economist at the American Institute for Economic Research, told the DCNF. “When lending institutions are unable to differentiate between high- and low-risk borrowers, they are more likely to become risk-averse, either raising the interest rates associated with borrowing or doling out loans with increasing parsimony. With the kind of irony that only government regulators can reliably muster, acting to make credit easier to acquire by blocking lenders’ access to certain data about borrowers will ultimately impact low- and middle-income borrowers negatively, turning affordable or significant borrowing into a privilege reserved for the wealthy.”

“The rule will increase the reliability of credit reports because medical bills are a poor predictor of someone’s ability to repay a loan,” a CFPB spokesperson claimed in a statement to the DCNF.  However, CFPB director Chopra appeared to say the exact opposite in a May 2023 speech, when he cited a 2019 National Institutes of Health study that found 66.5% of personal bankruptcies were linked to medical debts.

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