Federal agencies directed to stop weighing medical debt in loan approvals

The White House's budget office is directing federal agencies that lend hundreds of millions of dollars annually to individuals and small businesses to stop factoring the existence of medical debt in lending decisions, Bloomberg reported Aug. 25. 

"The federal government has a responsibility to set the standard for how medical debt is

treated when making lending decisions," Budget Director Shalanda Young said in the directive. "To that end, whenever possible and consistent with the law, the federal government will make changes within its own programs, and as a result, influence how the broader market treats medical debt in lending decisions." 

The directive calls on federal agencies to submit plans on how they will exclude medical debt from consideration. That includes identifying any statutory, regulatory or administrative changes that would be required to change criteria. 

"Freeing American families from this burden will increase their access to credit and positively impact their financial, physical, and mental health and well-being," Ms. Young said in the directive.

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