In the final weeks of Joe Biden's Democratic administration, the U.S. consumer finance watchdog is actively moving forward with rulemaking. This comes as a bid to enhance consumer protections before President-elect Trump takes over and potentially overhauls the agency. Three people with knowledge of the agency's thinking have shed light on these developments.

"Consumer Finance Watchdog's Last Stand for Protections"

Ban on Including Medical Debt in Credit Reports

The Consumer Financial Protection Bureau is hopeful of finalizing a ban on including medical debt in credit reports. This proposal, championed by Vice President Kamala Harris, aims to provide relief to consumers burdened by medical debts. It is a significant step towards safeguarding the financial well-being of individuals. By removing medical debt from credit reports, more people will have a fair chance to rebuild their credit and access financial services.

One source with direct knowledge of the matter emphasized the importance of this rule. "This ban will help countless Americans who have been unfairly affected by medical debt. It gives them a fresh start and allows them to move forward without the constant shadow of medical debt on their credit records."

Another aspect to consider is the impact on the credit industry. Removing medical debt from credit reports will force lenders to look beyond this aspect when evaluating creditworthiness. This could lead to more inclusive lending practices and better access to credit for those with medical debt histories.

Restrictions on Data Brokers

The CFPB also plans to propose restrictions on data brokers that track and collect personal data. In today's digital age, personal data is a valuable commodity, and data brokers often collect and sell this information without proper consent. These restrictions will help protect consumers' privacy and prevent the misuse of their personal data.

A source familiar with the matter stated, "Data brokers have been a growing concern as they collect and sell personal information without proper safeguards. These proposed restrictions will give consumers more control over their data and prevent it from being misused."

With the increasing number of data breaches and privacy concerns, these restrictions are crucial in ensuring that consumers' personal information remains secure. It will also hold data brokers accountable for their actions and prevent them from engaging in unethical practices.

Other Pending Proposals

The CFPB has at least seven other pending proposals, including curbs on fees lenders charge on overdrafts and transactions declined for insufficient funds, and rules governing paycheck advances. These proposals address various aspects of consumer finance and aim to provide more protection and transparency.

For example, curbing overdraft fees will help consumers avoid unnecessary financial penalties. Many consumers end up paying high fees when they overdraw their accounts, and these proposals seek to address this issue. Similarly, rules governing paycheck advances will ensure that consumers have access to fair and transparent borrowing options.

These pending proposals demonstrate the CFPB's commitment to protecting consumers and addressing issues in the consumer finance industry. They will have a significant impact on the way consumers interact with financial institutions and access financial services.