A federal judge in Texas has reversed a Biden administration rule that wiped medical debt from credit reports, affecting nearly 15 million Americans.
The rule, which did not discharge debt but changed how credit scores could be calculated, would have removed $50 million of medical debt from credit reports.
U.S. District Judge Sean Jordan, who was appointed by President Donald Trump during his first term, argued in his decision that the Fair Credit Reporting Act does not allow the Consumer Financial Protection Bureau (CFPB) to remove medical debt from reports.
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The CFPB had made the changes in January before President Joe Biden left office. The independent agency had calculated that the new credit reporting rules would result in an additional 22,000 mortgages every year and boost Americans’ credit scores by an average of 20 points.
Although the judge has prevented the advancement of these changes, he noted that the bureau can "encourage" creditors to use other categories of information.
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