New federal rule will remove medical debt from credit reports
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(WASHINGTON) — In a major change that could affect millions of Americans’ credit scores, the Consumer Financial Protection Bureau on Tuesday finalized a rule to remove medical debt from consumer credit reports.
The rule would erase an estimated $49 billion in unpaid medical bills from the credit reports of roughly 15 million Americans, the CFPB said.
That could help boost those borrowers’ credit scores by an average of 20 points, helping them qualify for mortgages and other loans.
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” Vice President Kamala Harris said in a statement touting the new rule.
She announced the proposal for the rule last June alongside CFPB Director Rohit Chopra.
“This will be life-changing for millions of families, making it easier for them to be approved for a car loan, a home loan or a small-business loan,” Harris added.
Major credit reporting agencies have already announced voluntary steps to remove medical debt from their reports.
The final rule is set to take effect in March – but that timeline could be delayed by legal challenges.
Debt collection industry groups like the Association of Credit and Collection Professionals have opposed the change, saying it would result in “reduced consequences for not paying your bills, which in turn will reduce access to credit and health care for those that need it most.”
(LOS ANGELES) — Multiple fires raging across the Los Angeles area will cost insurers as much as $30 billion, Wells Fargo and Goldman Sachs estimated in a report released this week.
After accounting for non-insured damages, the total costs will balloon to $40 billion, the report said.
The ongoing fires, according to analysts, “appear to already be the costliest wildfire event in California history.”
The forecast would make the fires one of the 20 costliest natural disasters in U.S. history, when calculated as a share of the nation’s gross domestic product, analysts added.
The wildfires have left a path of wreckage in their wake. More than 12,000 homes and other structures have burned down in the fire, the California Department of Forestry and Fire Protection said.
At least 24 people have died and more than a dozen others remain unaccounted for as multiple wildfires, fueled by severe drought conditions and strong winds, continue to burn.
Thousands of firefighters are battling wildfires across 45 square miles of Los Angeles County. About 92,000 people remain under mandatory evacuation orders and another 89,000 are under evacuation warnings.
A rise in high-cost natural disasters has strained insurers and helped send home insurance premiums nationwide soaring, experts previously told ABC News. Plus, a recent bout of acute inflation has made homebuilding and repairs more expensive, they noted, exacerbating the cost crunch for insurers.
Industry unrest roiling the insurance market in California demonstrates the role climate change has played in skyrocketing premiums and struggling insurers, some experts said.
The average home insurance price jumped a staggering 43% in California from January 2018 to December 2023, S&P Global found last year.
Over recent years, many insurers have reduced coverage or stopped offering it altogether in California as wildfire risks have grown. With more frequent and intense wildfires, insurers face the prospect of more claims and higher costs.
While wildfires are a natural and necessary part of Earth’s cycle, climate change and other more direct human influences have increased their likelihood. Climate change is making naturally occurring events more intense and more frequent, research shows.
Los Angeles residents and homes remain under threat from the wildfires.
A “particularly dangerous situation” with a red flag warning will go into effect in western Los Angeles County and most of Ventura County on Tuesday, weather officials said, with winds threatening to further fuel historic Southern California wildfires.
ABC News’ Kevin Shalvey, David Brennan, Emily Shapiro, Meredith Deliso, Max Golembo, Matthew Glasser and Julia Jacobo contributed to this report.
(WASHINGTON) — Autoworkers, farmers and alcohol distillers are among a set of U.S. workers who risk losing their jobs as a result of potential tariffs on Canada, China and Mexico, experts told ABC News.
The U.S. president was expected to sign executive orders on Tuesday putting in place the 25% tariffs on goods from Mexico and Canada and 10% tariffs on those from China, according to the White House.
Trump announced on Monday that the proposed tariffs on most goods from Canada and all products from Mexico would be paused for one month, putting the policies on schedule to take effect in early March. The postponements came following conversations Trump had with Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau. Trump said Monday afternoon he plans to talk to China in the next day or two about tariffs on that country.
Some U.S. shoppers and economists have raised alarm about the potential for tariff-driven price increases, since importers typically pass along a share of the cost of the higher taxes to consumers.
A lesser-known effect of the potential tariffs, however, could arise as some retailers struggle to sell imported goods at competitive prices while manufacturers reckon with higher costs of raw materials such as car parts and lumber, experts said. Sales could wobble, they added, leading directly to job cuts.
Potential retaliatory tariffs slapped on U.S. exports could prove another cause of layoffs, the experts said, since U.S. firms dependent on selling products overseas risk weakened performance.
“It’s like Trump took a grenade and threw it into the economy, and he walked away to see what happens,” Rob Handfield, professor of operations and supply chain management at North Carolina State University, told ABC News.
The Trump administration did not immediately respond to ABC News’ request for comment.
In a series of social media posts over the weekend, Trump said the tariffs target Canada, Mexico and China for hosting the manufacture and transport of illicit drugs that end up in the United States. In a Truth Social post on Sunday, Trump urged the three countries to address his concerns, while acknowledging the tariffs may cause some financial hardship within the U.S.
“WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID,” Trump wrote.
In recent days, some trade associations and labor unions voiced warnings about tariff-related job losses.
Jay Timmons, president and CEO of the National Association of Manufacturers, said small- and medium-sized firms in the sector employing millions of Americans risk “significant disruptions” as a result of potentially high energy prices and costly supply chain workarounds.
“Manufacturers will bear the brunt of these tariffs,” Timmons said, adding that the policies would put “American jobs at risk.”
Distilled Spirits Council, a trade association representing alcohol makers across North America, cautioned that tariffs would harm business in all three countries. “Maintaining fair and reciprocal duty-free access for all distilled spirits is crucial for supporting jobs and shared growth,” the group said.
The risks for U.S. workers are perhaps best demonstrated by the auto industry, which employs about 4 million people, experts said.
U.S. automakers hold deep ties to Canada and Mexico, since products often snake back and forth between the countries before a car reaches full assembly, Christopher Conlon, a professor of economics at New York University who studies trade, told ABC News.
Mexico and Canada make up the top two U.S. trading partners for both finished motor vehicles and car parts, according to a Cato Institute analysis of data from the U.S. International Trade Commission.
“The supply chains involve shipping parts back and forth over the border five times, six times, seven times. If every time a part crosses the Canadian border it gets taxed at 25%, that will add up really quickly,” Conlon said, noting the added costs could hike car prices by as much as $10,000 and, in turn, weaken sales.
“The companies will have to scale back production, and that will mean fewer shifts,” Conlon added.
The production slowdown may lead to job cuts at companies indirectly impacted by the tariffs, such as car dealerships and auto-part sellers, experts said. More than 550,000 workers at car dealerships representing international brands risk losing their jobs if the industry falters due to the tariffs, the American International Automobile Dealers Association told ABC News in a statement.
To be sure, employment may grow in some domestic industries protected by the tariffs, such as the steel and energy sectors, some experts said. Even those businesses, however, may contend with challenges if the tariffs limit consumer demand, they added.
Potential job gains in some sectors would not outweigh the losses in others, Jason Miller, a professor of supply chain management at Michigan State University, told ABC News.
“It’s very difficult to see a net positive of this in terms of employment for the U.S.,” Miller said.
(NEW YORK) — Cryptocurrencies affiliated with President Donald Trump and first lady Melania Trump plummeted in the initial hours after Trump was sworn into office Monday.
“Official Trump,” a recently launched crypto token, plunged more than 20% in value over a 24-hour stretch ending Tuesday morning, according to crypto tracking site CoinGecko. After the drop, Official Trump stood at $38.
The decline for Trump’s meme coin reverses some of the gains enjoyed in an initial surge after it hit crypto markets last week. The coin’s price climbed from about $10 on Saturday morning to a high of about $74.59 before it began to slide.
“Melania Meme,” which also launched last week, dropped in value by more than half over a 24-hour timespan ending on Tuesday morning, CoinGecko data showed. The price of the Melania Meme was $4.19 on Tuesday morning.
The recent decline for the coins associated with Trump and Melania coincided with a slight drop for bitcoin, the world’s largest cryptocurrency. In early trading on Tuesday, bitcoin fell nearly one percentage point, putting its price at $102,853.
Many digital assets have climbed since Trump won the November election, indicating investor enthusiasm about declarations Trump made in support of cryptocurrency.
In July, Trump told the audience at a cryptocurrency conference in Nashville, Tennessee, that he wanted to turn the U.S. into the “crypto capital of the planet.”
Trump also has promised to ease regulations for the sector and establish the federal government’s first National Strategic Bitcoin Reserve.
On Monday, Securities and Exchange Commission Chair Gary Gensler officially resigned from his position, marking the departure long-sought by some crypto boosters who viewed Gensler as overly restrictive toward digital assets.
There have been reports that Trump would sign an executive action that would prioritize cryptocurrency policy. However, no such order was among the dozens of actions Trump signed
