Biden admin finalizes rule to ban medical debt from credit reports

• The CFPB estimates that for Americans with medical debt, the new rule could raise their credit scores by an average of 20 points.
• "People who get sick shouldn't have their financial future upended," CFPB Director Rohit Chopra said in the press release.

The big picture: While the new rule won't forgive any medical debt, it will bar outstanding medical debt balances from being included in credit reports and prevent lenders from using that debt in making a decision on a person's creditworthiness.

• The rule will "close a special carveout that has allowed debt collectors to abuse the credit reporting system," Chopra added.

The intrigue: The new rule, issued in the final weeks of the Biden administration, is set to take effect 60 days after being published in the federal register.

• The timing, as the Biden admin winds down, tees up a potential conflict with President-elect Trump's incoming administration, which could reverse the rule.

• The rule already drew the ire of some Republicans. Some House Republicans previously told Chopra that they had "serious concerns" concerning the bid to "weaken the accuracy and completeness of consumer credit reports," the New York Times reported.
• The rule also saw pushback from debt collectors and credit reporting agencies, including ACA International and Equifax.

Go deeper: Medical debt is squeezing millions of middle-class Americans, report says