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consumer financial protection bureau
CFPB Bans Medical Debt From Credit Reports—But GOP Wants to Reverse It
The agency "effectively dared the incoming Trump administration and its Republican allies in Congress to undo rules that are broadly popular," wrote one healthcare reporter.
Jan 07, 2025
Months after more than half of respondents to an Associated Press poll said it was "extremely or very important" for the federal government to take action to help people with medical debt, the Consumer Financial Protection Bureau on Tuesday finalized a rule to keep such debt off credit reports.
With broad public support, the rule appeared to be an uncontroversial slam dunk for the Biden administration in the last days of President Joe Biden's presidency—but Republicans, who now have majorities in Congress and are poised to take over the White House in less than two weeks, have signaled that they would take action to undo the CFPB's regulations, including the medical debt rule.
U.S. Sen. Tim Scott (R-S.C.), the new chair of the Senate Banking Committee, said last month that the CFPB should halt all rulemaking until President-elect Donald Trump takes office.
"It is paramount that President Trump can begin his administration on January 20 with a fresh slate to implement the economic agenda that the American people resoundingly voted for," Scott said.
The senator's comments suggested that Americans who voted for Trump did so in order to continue paying overdraft fees, having their personal information sold by predatory data brokers, and being penalized for owing medical bills—all of which the CFPB has taken action on since the November elections.
As Noam N. Levey wrote at KFF Health News, the CFPB on Tuesday "effectively dared the incoming Trump administration and its Republican allies in Congress to undo rules that are broadly popular and could help millions of people who are burdened by medical debt."
"People who get sick shouldn't have their financial future upended."
The new rule would remove $49 billion in unpaid medical debt from credit reports by amending Regulation V, which implements the Fair Credit Reporting Act.
Lenders are restricted from obtaining or using medical information to make lending decisions. But federal regulators have created an exception to that restriction, allowing companies to consider medical debt. The new rule ends that exception by banning medical bills on credit reports, which the CFPB said has led to a practice of using the credit reporting system to coerce payments even if bills are inaccurate, as they frequently are, according to the agency.
About 15 million people will be helped by the new regulation, said the CFPB, with credit scores of people with medical debt boosted by an average of 20 points.
An estimated 100 million Americans owe debt for healthcare they've obtained, forcing many to cut spending on groceries, housing, and other essentials.
An informal KFF Health News poll of people facing eviction or foreclosure in the Denver area in 2023 found that nearly half of people surveyed said medical debt played a role in their housing insecurity.
The inclusion of medical debt on credit reports by companies like Experian, Equifax, and TransUnion can harm Americans' ability to obtain jobs, mortgages, and rental apartments, even as CFPB research shows that medical debt is a poor predictor of whether a consumer will repay a loan.
"People who get sick shouldn't have their financial future upended," said CFPB Director Rohit Chopra. "The CFPB's final rule will close a special carveout that has allowed debt collectors to abuse the credit reporting system to coerce people into paying medical bills they may not even owe."
Billionaire Trump megadonor Elon Musk, who has become a top adviser to the president-elect and was picked to co-lead the proposed Department of Government Efficiency, has made clear that the CFPB would be a key target of the advisory body, calling for the agency to be "deleted" in November.
Despite Republicans' repeated claims that Trump will lead the party in securing an agenda that serves working families, lobbying by the credit reporting industry over the medical debt rule has made clear whose side the GOP is on.
Equifax said in August, two months after the CFPB proposed the rule, that the government is "not permitted" to regulate the industry in such a way.
House Financial Services Committee Chairman Patrick McHenry (R-N.C.) also called the proposal "regulatory overreach."
Chopra said last month that despite Republicans' objections, the CFPB would not "be a dead fish" ahead of Trump's term.
"We will continue to defend consumers' rights," he said, "and to hold companies accountable."
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10 Wins Against Inequality to Celebrate in 2024
Champions in the fight against inequality face formidable challenges in 2025. But by working together at all levels—from the shop floor to state houses to the halls of Congress—we can still find ways to build power.
Dec 31, 2024
In dark times like these, shining a light on successful efforts to reverse our country’s extreme inequality is more important than ever. As we looked back on 2024, we actually found plenty to celebrate. Here are 10 inspiring wins that deserve more attention.
1. Labor Breakthrough in the South
Volkswagen workers in Chattanooga, Tennessee voted overwhelmingly in April to join the United Auto Workers (UAW), a landmark win for labor organizing in the South. The region has suffered deeply because of its low-road, anti-union economic model. Seven out of ten states with the highest levels of poverty are in the South, according to the Economic Policy Institute.
Whatever happens on the national political stage over the next four years, local communities can still win important fights for a more just society.
Another UAW election, at a Mercedes-Benz facility in Vance, Alabama, where management was more aggressively anti-union, went the other way in May. But the union has vowed to continue organizing in the region. “This is a David and Goliath fight,” UAW President Shawn Fain said after the Mercedes loss. “Sometimes Goliath wins a battle. But David wins the war.”
2. Union Momentum at Amazon
Organizing workers at Amazon—now the nation’s second largest private employer—has been a white whale of the labor movement for years. Aside from a breakthrough union election win in Staten Island, puncturing the e-commerce giant’s anti-labor strategy has been challenging. That is, until this year, when the Teamsters made sizable gains.
The National Labor Relations Board ruled this summer that Amazon should be considered a joint employer of the delivery drivers it subcontracts, opening up that class of workers to organize. And organize they did—according to the Teamsters, over 5,000 drivers have joined the union at nine Amazon locations. Warehouse workers have made advances as well. In California, Amazon employees in San Francisco and at the company’s air hub in San Bernardino are now demanding union recognition.
3. Grocery Mega-Merger Blocked
For the past two years, the United Food and Commercial Workers union has led a coalition of more than 100 organizations against the proposed merger of grocery giants Kroger and Albertsons. The union predicted the mega-merger would result in “lost jobs, closed stores, food deserts, and higher prices.”
By contrast, corporate executives stood to make a killing. At Albertsons alone, the proposed merger agreement would’ve delivered as much as $146 million to the firm’s top 10 officials.
On December 10, one federal court judge and another in Washington state sided with the Federal Trade Commission and issued temporary injunctions against the deal. The following day, Albertsons threw in the towel on what would’ve been the biggest grocery store merger in U.S. history. “This is the first time the FTC has ever sought to block a merger not just because it’s gonna be bad for consumers, but also for workers,” FTC chair Lina Khan said shortly after the decision.
4. Ballot Wins on Taxes, Wages, Paid Leave
Despite the red wave on November 5, voters in several states passed ballot initiatives to adopt inequality-fighting policies that most Republican politicians oppose.
In the red states of Nebraska, Missouri, and Alaska, voters approved guaranteed paid leave, while Missouri and Alaska also passed state minimum wage hikes.
Washington state voters rejected a hedge fund-financed ballot proposal to repeal the state’s path-breaking capital gains tax on the rich. They also beat back an effort to gut a state-operated long-term care insurance program. In Illinois, voters adopted a nonbinding measure expressing support for an extra 3% tax on income of over $1 million.
5. TurboTax Got Turbo-Trounced
In 2024, for the first time ever, over 100,000 Americans filed their tax returns digitally directly to the IRS. The agency’s Direct File system went live in 12 pilot states, breaking the dominance that for-profit tax preparation companies have enjoyed for years.
“This is an important fight to ensure greedy tax prep companies don’t continue to rake in money from filers who are simply doing their civic duty,” wrote Public Citizen’s Susan Harley for Inequality.org.
Direct file also advances racial justice. Color of Change and the Groundwork Collaborative exposed how Intuit’s TurboTax and H&R Block target Black and low-income communities for costly and unnecessary services.
Unfortunately, this fight is not over. House Republicans are urging President-elect Donald Trump to kill the IRS’s free direct file service on day one of his second administration.
6. Biden’s Worker Protection Spree
President Joe Biden adopted a range of pathbreaking executive actions to protect U.S. workers—including safeguards against toiling in extreme heat, broader overtime pay coverage, and new measures protecting organizing rights. He also authorized rules to crack down on bosses who misclassify employees as independent contractors or force them to sign noncompete agreements.
The beauty of executive actions: no need for Congressional approval. The downside: The next president has the power to roll them back.
Will that happen under Trump, a self-declared but dubious champion of the working class? We shall see. In the meantime, the National Employment Law Project and several other organizations have put together a guide on how state policymakers could enact similar standards at the subfederal level.
7. Grounding Private Jets
Did you know that private jets pollute 10 to 20 times more per passenger than commercial airplanes? And the typical private jet owner, with a net worth of nearly $200 million, actually pays a far smaller share of air safety fees than commercial coach passengers, according to Institute for Policy Studies research.
In 2024, Stop Private Jet Expansion, a 100-organization coalition, won two major victories in their campaign to block the expansion of New England’s largest private jet airport, Hanscom Field outside Boston. Massachusetts state rejected the developer’s environmental impact submission, demanding supplemental information. As part of a comprehensive climate bill, the state legislature also updated the charter of Massport, the agency that will decide the future of the airport, to require them to consider carbon emissions and climate change in their decision-making.
8. Arming Millions of Davids Against Wall Street Goliaths
Elon Musk has called for “deleting” the Consumer Financial Protection Bureau. What’s his problem with this federal agency? For Musk and his finance bro buddies, it appears the CFPB has been overly effective in helping ordinary Americans stand up to big money interests.
Recently the agency announced it’s forcing shady “credit repair” companies to return $1.8 billion in illegal junk fees to 4.3 million Americans. The agency also just issued new limits on overdraft fees that will save consumers billions more. During its nearly 14-year history, the CFPB has won nearly $21 billion in compensation for victims of fraud, racial discrimination in lending, and other financial abuse.
“Weakening the CFPB, slowing its work, or steering it to favor industry over the public interest,” explains the advocacy group Americans for Financial Reform, “would give bad actors a green light to do their worst and further deepen this country’s racial wealth gap.”
9. Public Money for the Public Good
For four decades, procurement rules made it difficult for local and state policymakers to ensure that federally funded projects create good jobs. With megabillions in new public investment about to flow into infrastructure and clean energy projects, a labor-community alliance known as the Local Opportunities Coalition led the charge to get rid of these anti-worker vestiges of the conservative Reagan era.
Finally, in 2024, the Biden administration got the job done. Now state and local governments can give companies a leg up in bidding competitions if they commit to creating specific numbers of jobs with minimum levels of pay and benefits. They can also require hiring preferences for local workers and disadvantaged communities, ban the use of contract funds for union-busting, and prohibit employers from misclassifying workers as “independent contractors” to skirt labor laws.
10. Communities Standing up for Quality Care
Whatever happens on the national political stage over the next four years, local communities can still win important fights for a more just society.
One particularly inspiring example from 2024: the battles to protect county-owned nursing homes in rural Wisconsin against privatization. Study after study has shown that private equity-owned facilities have lower-quality care and higher mortality rates. And yet many Republican lawmakers are backing for-profit corporations’ efforts to take over this critical service.
As veteran community organizer George Goehl has reported, Wisconsin seniors put up a strong fight this year. They succeeded in ousting pro-privatization members of at least three county boards and are continuing to organize to protect their healthcare from corporate greed.
Champions in the fight against inequality face formidable challenges. But by working together at all levels—from the shop floor to state houses to the halls of Congress—we can still find ways to build power and move our country towards a just economy that works for everyone.
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New Rule From Agency Trump Wants Destroyed Would Save Consumers $5 Billion Per Year in Overdraft Fees
One advocate called the CFPB's new rule "a major milestone in its effort to level the playing field between regular people and big banks."
Dec 12, 2024
The Consumer Financial Protection Bureau, one of President-elect Donald Trump's top expected targets as he plans to dismantle parts of the federal government after taking office in January, announced on Thursday its latest action aimed at saving households across the U.S. hundreds of dollars in fees each year.
The agency issued a final rule to close a 55-year-old loophole that has allowed big banks to collect billions of dollars in overdraft fees from consumers each year,
The rule makes significant updates to federal regulations for financial institutions' overdraft fees, ordering banks with more than $10 billion in assets to choose between several options:
- Capping their overdraft fees at $5;
- Capping fees at an amount that covers costs and losses; or
- Disclosing the terms of overdraft loans as they do with other loans, giving consumers a choice regarding whether they open a line of overdraft credit and allowing them to comparison-shop.
The final rule is expected to save Americans $5 billion annually in overdraft fees, or about $225 per household that pays overdraft fees.
Adam Rust, director of financial services at the Consumer Federation of America, called the rule "a major milestone" in the CFPB's efforts "to level the playing field between regular people and big banks."
"No one should have to pick between paying a junk overdraft fee or buying groceries," said Rust. "This rule gives banks a choice: they can charge a reasonable fee that does not exploit their customers, or they can treat these loan products as an extension of credit and comply with existing lending laws."
The rule is set to go into effect next October, but the incoming Trump administration could put its implementation in jeopardy. Trump has named billionaire Tesla CEO Elon Musk to co-lead the Department of Government Efficiency, an advisory body he hopes to create. Musk has signaled that he wants to "delete" the CFPB, echoing a proposal within the right-wing policy agenda Project 2025, which was co-authored by many officials from the first Trump term.
"The CFPB is cracking down on these excessive junk fees and requiring big banks to come clean about the interest rate they're charging on overdraft loans."
"It is critical that incoming and returning members of Congress and President-elect Trump side with voters struggling in this economy and support the CFPB's overdraft rule," said Lauren Saunders, associate director at the National Consumer Law Center (NCLC). "This rule is an example of the CFPB's hard work for everyday Americans."
In recent decades, banks have used overdraft fees as profit drivers which increase consumer costs by billions of dollars every year while causing tens of millions to lose access to banking services and face negative credit reports that can harm their financial futures.
The Federal Reserve Board exempted banks from Truth in Lending Act protections in 1969, allowing them to charge overdraft fees without disclosing their terms to consumers.
"For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans' deposit accounts," said CFPB Director Rohit Chopra. "The CFPB is cracking down on these excessive junk fees and requiring big banks to come clean about the interest rate they're charging on overdraft loans."
Government watchdog Accountable.US credited the CFPB with cracking down on overdraft fees despite aggressive campaigning against the action by Wall Street, which has claimed the fees have benefits for American families.
Accountable.US noted that Republican Reps. Patrick McHenry of North Carolina and Andy Barr of Kentucky have appeared to lift their criticisms of the rule straight from industry talking points, claiming that reforming overdraft fee rules would "limit consumer choice, stifle innovation, and ultimately raise the cost of banking for all consumers."
Similarly, in April Barr claimed at a hearing that "the vast majority of Americans" believe credit card late fees are legitimate after the Biden administration unveiled a rule capping the fees at $8.
"Americans pay billions in overdraft fees every year, but the CFPB's final rule is putting an end to the $35 surprise fee," said Liz Zelnick, director of the Economic Security and Corporate Power Program at Accountable.US. "Despite efforts to block the rule and protect petty profits by big bank CEOs and lobbyists, the Biden administration's initiative will protect our wallets from an exploitative profit-maximizing tactic."
The new overdraft fee rule follows a $95 million enforcement action against Navy Federal Credit Union for illegal surprise overdraft fees and similar actions against Wells Fargo, Regions Bank, and Atlantic Union.
Consumers have saved $6 billion annually through the CFPB's initiative to curb junk fees, which has led multiple banks to reduce or eliminate their fees.
"Big banks that charge high fees for overdrafts are not providing a courtesy to consumers—it's a form of predatory lending that exacerbates wealth disparities and racial inequalities," said Carla Sanchez-Adams, senior attorney at NCLC. "The CFPB's overdraft rule ensures that the most vulnerable consumers are protected from big banks trying to pad their profits with junk fees."
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