In a stunning, unprecedented and ostensibly voluntary move, the nation’s top three credit bureaus announced on Friday that they intend to wipe out 70 percent of “medical collection debt tradelines from consumer credit card reports.”
Tradeline is a credit reporting term that simply refers to a single debt. For instance, if you accrued a $15,000 debt to a specific physician, that would be a tradeline. If you accrued another $25,000 debt to a specific hospital, that would be another tradeline.
In a press release, all three unions attributed their decision to “months of industry research” by the Kaiser Family Foundation, which the release states has determined that “two-thirds of medical debts are the result of a one-time or short-term medical expense arising from an acute medical need.”
“After two years of the COVID-19 pandemic and a detailed review of the prevalence of medical collection debt on credit reports, the NCRAs are making changes to help people to focus on their personal wellbeing and recovery,” the presser notes.
“NCRAs” is short for nationwide credit reporting agencies.
Major credit reporting agencies announced they will remove many types of medical debt from credit reports.
— Larry Levitt (@larry_levitt) March 18, 2022
Included among the changes is the elimination of “paid medical collection debt” from consumer credit reports. Currently, even paid debt tends to remain on a credit report for a full seven years from the date of delinquency.
In addition, the date of delinquency will be postponed by another six months. At the moment, a debt isn’t declared delinquent til it’s gone unpaid for 180 days. But moving forward, the grace period will be extended to one full year.
The first two changes are set to go into effect on July 1st.
And lastly, starting in 2023, Equifax, Experian and TransUnion “will also no longer include medical collection debt under at least $500 on credit reports,” according to the press release.
What remains unclear is how voluntary this move really is. The Washington Post notes that far-left Sen. Elizabeth Warren’s brainchild, the Consumer Financial Protection Bureau, had “indicated the agency was seriously looking into regulatory rules to exclude such debt from credit reports.”
“CFPB Director Rohit Chopra [had] been extremely critical of how medical debt is reported to the credit bureaus and thus factored into credit scores, which are used to determine creditworthiness for loans, apartments or insurance,” according to the Post.
These changes are a real mixed bag but worth noting that they’re only coming about because credit bureaus are under pressure from the CFPB. Great case of regulators prompting change through saber-rattling. https://t.co/anOyL65ZOj
— Ames Grawert ☃️ (@AmesCG) March 18, 2022
It’s the same phenomenon that’s played out vis-a-vis social media. Democrat legislators threatened action against the major social media companies after the 2016 election, and so the companies responded by drastically altering the way their algorithms work.
The social media phenomenon continues to this day. As noted by Pulitzer Prize-winning journalist Glenn Greenwald, “Democrats are pressuring companies to censor for them.”
“It’s typically argued by those defending censorship … that this is just private companies making decisions for themselves about the type of content with which they do or don’t want to be associated. … But the reality is that’s not what’s happening,” he noted in a recent video presentation.
“What’s actually happening is that so often the decisions to censor nominally being made by Big Tech, by Silicon Valley companies, are in fact being directed by political officials in Washington, specifically by Democratic Party officials.”
Officials who, Greenwald claimed, “are using their control over both houses of Congress and the White House, and along with it, therefore the entire executive branch, to pressure and cajole and often threaten explicitly that these companies need to start censoring more in accordance with the Democratic Party’s view of what should and shouldn’t be heard, or they will face legal and retaliatory reprisals.”
That the US Government violates the 1st Amendment’s free speech guarantee not just when they directly censor but also when they pressure or coerce private companies to do it for them is clear in the law. Here’s what ACLU’s @benwizner told me when I first reported on this: pic.twitter.com/bAkZyKaGZs
— Glenn Greenwald (@ggreenwald) February 3, 2022
That being said, even after having secured such a momentous victory, far-left activists, including some congressional Democrats, remain unsatisfied and want more than these “meager scraps.”
Case in point:
Now, let’s pass Medicare for All and end the burden of medical debt, once and for all. https://t.co/C9VNoWqyYU
— Pramila Jayapal (@PramilaJayapal) March 18, 2022
We applaud the decision by credit bureaus to stop tracking medical debt.
It shouldn’t exist at all.
It doesn’t in any other industrialized country.
Why do Americans settle for such meager scraps?
— Shahid Buttar for Congress (@ShahidForChange) March 19, 2022
there shouldn’t be such a thing as “medical debt” https://t.co/enKS55zCv9
— Jesse Spector (@jessespector) March 19, 2022
How about we get universal health care so medical debt doesn’t exist?
— Patzuzu (@PazuzuWoW) March 18, 2022
— Janne Cinsk 🌻 (@CinskJanne) March 18, 2022
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