As Black America knows, we suffer disproportionately from medical debt. According to Bloomberg, while 11% of low-income and uninsured Americans of all races have medical debt, 13% of Black Americans struggle with medical debt compared with just 7% of White and 3% of Asian Americans. Essentially, in the U.S., it’s harder to afford healthcare if you’re Black than if you’re poor.
A new rule from President Joe Biden’s administration seeks to ease the impact of that discrepancy. On Tuesday (Jan. 7), Vice President Kamala Harris shared the news that the Biden administration will make it impossible for lenders to see if American borrowers have unpaid medical debt in their credit history.
She further elaborated that the Consumer Financial Protection Bureau (CFPB) will be removing $49 billion of existing unpaid medical bills from the credit reports of 15 million Americans.
It will also ban the inclusion of medical debt on credit reports, meaning lenders will no longer be able to take it into consideration when deciding whether or not to issue a loan.
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” Harris said, according to The Guardian.
“This will be life changing for millions of families, making it easier for them to be approved for a car loan, a home loan or a small-business loan.”
This change would especially affect Black people, as it could raise credit scores by around 20 points and could possibly lead to 22,000 extra mortgages being approved every year, according to the bureau.
Despite the promising news, Republicans in Congress are demanding that the Biden administration stop issuing new rules with President-elect Donald Trump set to take office. Trump—and his congressional supporters—may try to reverse the ban.
Before the Biden administration’s announcement, the three national credit reporting agencies — Experian, Equifax and TransUnion — said last year that they were removing medical collections debt under $500 from U.S. consumer credit reports.