Lena Petrova summarizes the current situation of the American consumer (8 minutes). The unemployment rate should increase as businesses lay off workers due to insufficient demand. Banks practice usury, paying next to nothing on deposits while charging 23 percent on credit cards. The “animal spirits” update is on Friday.
To solve this problem, the Biden administration has removed medical debt from being allowed in the calculation of credit scores so people can take out more mortgages.
Vice President Kamala Harris announced on Tuesday a final rule by the Consumer Financial Protection Bureau (CFPB) that will remove $49 billion in unpaid medical bills from the credit reports of 15 million Americans.
The move will raise their credit scores by an estimated average of 20 points and lead to the approval of about 22,000 additional mortgages annually, according to Harris’s office.
“Today, we are building on this meaningful work by announcing an unprecedented final rule that will make it so medical debt is no longer included in your credit score,” Harris said in a statement. “This will be lifechanging for millions of families, making it easier for them to be approved for a car loan, a home loan, or a small-business loan.”
The CFPB previously stated that medical billing is “often riddled with errors, including inflated or duplicative charges, fees for services the patient never received, or charges already paid,” making it less reliable for predicting future repayment.
Harris said that states and localities have already eliminated over $1 billion in medical debt for more than 700,000 Americans by leveraging the American Rescue Plan (ARP) funds, which are part of the federal government’s efforts to abolish $7 billion in medical debt by 2026.
These include New Jersey, Connecticut, and several counties in Louisiana, Michigan, and Illinois.
