The shuttering of the Consumer Financial Protection Bureau means there are no efforts underway to help keep billions of dollars in medical debt off the credit reports of millions of Americans.
But can a D.C. nonprofit step in and fill that gap?
That’s what the group Tzedek DC is asking a federal judge. The organization, along with the New Mexico Center on Law and Poverty, wants to help defend a federal rule that keeps medical debt off credit reports.
“This is an issue where 15 million Americans’ rights are affected, and the amount of money involved is staggering,” said Ariel Levinson-Waldman, founding director of Tzedek DC.
“We’re talking about $49 billion of medical debt sitting on credit reports — and that is harming Americans every day.”
Levinson-Waldman is taking up the case of a D.C. man named Harvey Coleman, who has been denied the ability to finance a cellphone because of debt related to medical bills. And Levinson-Waldman said it’s impacting Coleman’s efforts to start his own food-related business, too.
“Medical debt is a little bit unique because people got to go to the doctor, particularly in emergency situations,” Levinson-Waldman said.
“And the fact that people accumulated medical debt doesn’t tell you anything particularly helpful in terms of evaluating someone’s reliability to be a borrower who’s going to be able to pay back.”
It’s something Levinson-Waldman said also hits Black Americans disproportionately.
“One of the patterns we see is that people shouldn’t have gotten billed in the first place,” he said.
“They got billed. Now they have medical debt and they’re burdened by debt that shouldn’t be there at all and has to be unwound. But that’s a slow, complicated process.”
The rule protecting those with medical debt was enacted just last month, in the final weeks of the Biden Administration.
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