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The White House wants to remove medical debt from credit scores. Here's why that's a big deal.

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The White House wants to remove medical debt from credit scores. Here's why that's a big deal.

The Consumer Financial Protection Bureau has proposed a rule that would remove medical bills from credit reports, a ban that would prevent lenders from considering those debts when making decisions about whether to issue loans.

The proposed rule change, announced Tuesday, would also increase privacy protections, help raise credit scores and prevent debt collectors from using the credit reporting system to coerce people to pay.

“The CFPB is seeking to end the senseless practice of weaponizing the credit reporting system,” Rohit Chopra, director of the Consumer Financial Protection Bureau, said in a statement. “Medical bills on credit reports too often are inaccurate and have little to no predictive value when it comes to repaying other loans.”

If finalized, the rule would remove as much as $49 billion of medical debts that currently lower the credit scores for 15 million Americans, the bureau said.

How did we get here?

Congress in 2003 restricted lenders from obtaining or using medical information, including medical debts, through the Fair and Accurate Credit Transactions Act. But federal agencies subsequently issued a special regulatory exception to allow creditors to use medical debts in their credit decisions.

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Now the bureau is proposing to close that regulatory loophole. It began the rulemaking process in September.

Wasn’t medical debt already erased from many credit reports?

Yes. In March 2022, the CFPB released a report estimating that medical bills made up $88 billion of reported debts on credit reports and announced that it would assess whether credit reports should include data on unpaid medical bills.

After that, the three nationwide credit reporting conglomerates — Equifax, Experian and TransUnion — announced that they would voluntarily remove many of those bills.

And FICO and VantageScore, the two major credit scoring companies, have decreased the degree to which medical bills affect a consumer’s score.

If that’s the case, why is there a need for the proposed rule?

Despite the voluntary industry changes, Americans still have billions of dollars in outstanding medical bills in collections appearing in the credit reporting system, the bureau said. The complex nature of medical billing, insurance coverage and reimbursement, and collections means that medical debts that continue to be reported are often inaccurate or inflated, it added.

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Additionally, the changes made by FICO and VantageScore have not eliminated the credit score difference between people with and without medical debt on their credit reports.

By how much would credit scores improve?

Americans with medical debt on their credit reports would see their credit scores rise by 20 points on average if the proposed rule goes into effect, according to an estimate by the bureau.

How would this help homeowners?

If finalized, the rule would lead to the approval of about 22,000 additional mortgages every year, the CFPB said.

It said an internal analysis showed that medical debts penalize consumers by making underwriting decisions less accurate, leading to thousands of denied applications on mortgages that consumers would otherwise have repaid.

What happens next?

The proposed rule is open for public comment through Aug. 12.

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Eggs of grapevine-gobbling insect snagged en route to California. Are vineyards at risk?

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Eggs of grapevine-gobbling insect snagged en route to California. Are vineyards at risk?

Eggs of the spotted lanternfly, an invasive species that’s wreaked havoc on crops across more than a dozen states, were recently discovered on a metal art installation that was headed to Sonoma County, one of California’s most esteemed wine regions.

The discovery of the infamous bug’s eggs represents the first time the insect has been seen in California. The California Assn. of Winegrape Gowers, a statewide nonprofit, warns the invasive plant-hopper native to Asia has the potential to affect the entire winegrape industry in California, potentially pushing up prices if an infestation results in a smaller grape crop.

“Spotted lanternflies have been found in 18 states and have proven to pose a serious threat to vineyards,” Natalie Collins, president of the growers group, said. “These invasive insects feed on the sap of grapevines, while also leaving behind a sticky honeydew residue on the clusters and leaves.”

Impacts of the stress on the plant could range from reduced yields — and fewer bottles of wine for consumers — and, if severe and persistent enough, complete vine death and higher wine prices. No adult spotted lanterflies have been reported in the state, Collins said.

California is responsible for an average of 81% of the total U.S. wine production each year, according to the Wine Institute.

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The association warned that if there are additional egg masses in California from other shipments that haven’t been detected “they may produce adult [spotted lanternflies] in the coming weeks with peak populations expected in late summer or early fall.”

The California Department of Food and Agriculture last year developed an action plan to try to eradicate the pests if they were to enter the state. State officials have asked the public to look for egg masses outdoors. If a bug is found, they recommend grabbing it and placing it in a container where it can’t escape, snapping a photo and reporting it to the CDFA Pest Hotline at (800) 491-1899

The metal art installation on which the eggs were found was shipped to California in late March from New York, where the insects have been a persistent problem. After 11 viable egg masses were spotted at the Truckee Border Protection Station, the 30-foot-tall artwork was sent back to Nevada, where officials discovered an additional 30 egg masses. The art was power washed with detergent and then sent on its way again to Truckee, according to the association.

By the time the installation reached Sonoma County on April 4, the owner agreed to allow officials to open up the hollow beams in the artwork to inspect it further. Inside, they found an additional three egg masses and searched until they were confident no other eggs were present.

Spotted lanternflies were first discovered in Pennsylvania in 2014 and quickly spread to nearby states, where they became a nuisance. In New York they proved to be such a problem that officials encouraged residents to kill them on sight. The pest has become so notorious that it made an appearance on “Saturday Night Live” in a 2022 skit where one viewer applauded them for capturing “the unbelievable hubris of the lanternfly.”

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While they feed on more than 100 different plant species, they have a particular affinity for grapevines and a tree known as the “tree of heaven.” The adults, which have the ability to fly short distances, are typically 1 inch long. At rest, with its wings folded, the bug is a dull tan-gray color with black spots. During flight, its open wings feature a bright red, black and white pattern.

The species is often described as a “hitchhiker,” since its egg masses appear similar to cakes of mud and can easily be transported on tractor trailers and semi-trucks. During the first three immature stages of the bug’s life cycle they appear to be black with white spots and later turn red and black with white spots.

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After a pandemic strike, nurses union must pay Riverside hospital millions in damages

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After a pandemic strike, nurses union must pay Riverside hospital millions in damages

The union representing nurses at Riverside Community Hospital has been ordered to pay more than $6 million to the hospital for the fallout from a 2020 strike.

The unusual financial penalty was imposed by an arbitrator who found the 10-day work stoppage during the pandemic violated the terms of the labor agreement signed by HCA Healthcare, which operates the hospital, and Service Employees International Union Local 121RN. The $6.26-million fine, the arbitrator determined, was necessary to compensate the hospital for the cost of replacing workers who walked off the job during the strike, according to a statement released Wednesday.

Nurses walked off the job in June 2020 in an effort to force the hospital to increase staffing and improve safety as COVID-19 infections surged, the union said at the time. But hospital officials argued that because nurses also voiced complaints about shortages of personal protective equipment, the reasons for the strike were too expansive to be allowed under the collective bargaining agreement the two sides had signed.

“Our contract was clear, and the union showed reckless disregard for its members and the Riverside community by calling the strike,” said Jackie Van Blaricum, president of HCA Healthcare’s Far West Division, who was the hospital’s chief executive during the strike. “We applaud the arbitrator’s decision.”

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SEIU 121RN Executive Director Rosanna Mendez objected to the arbitrator’s findings, saying nurses were permitted under their contract to go on strike. She called the arbitrator’s decision “absurd and outrageous.”

“It is absolutely shocking that an arbitrator would expect nurses to not talk about safety issues,” Mendez said, adding that the union was exploring its options to contest the arbitrator’s decision.

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Supreme Court rejects California man's attempt to trademark Trump T-shirts

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Supreme Court rejects California man's attempt to trademark Trump T-shirts

The Supreme Court on Thursday turned down a California attorney’s bid to trademark the phrase “Trump Too Small” for his exclusive use on T-shirts.

The justices said trademark law forbids the use of a living person’s name, including former President Trump.

The vote was 9-0.

Trump was not a party to the case of Vidal vs. Elster, but in the past he objected when businesses and others tried to make use of his name.

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Concord, Calif., attorney Steve Elster said he was amused in 2016 when Republican presidential candidates exchanged comments about the size of Trump’s hands during a debate. Florida Sen. Marco Rubio, whom Trump had mocked as “Little Marco,” asked Trump to hold up his hands, which he did. “You know what they say about guys with small hands,” Rubio said.

After Trump won the election, Elster decided to sell T-shirts with the phrase “Trump Too Small,” which he said was meant to criticize Trump’s lack of accomplishments on civil rights, the environment and other issues.

Legally he was free to do so, but the U.S. Patent and Copyright Office denied his request to trademark the phrase for his exclusive use.

When he appealed the denial, he won a ruling from a federal appeals court which said his “Trump Too Small” slogan was political commentary protected by the 1st Amendment.

The Biden administration’s Solicitor Gen. Elizabeth Prelogar appealed and urged the Supreme Court to reject the trademark request.

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She acknowledged that Elster had a free-speech right to mock the former president, but argued he did not have the right to “assert property rights in another person’s name.”

“For more than 75 years, Congress has directed the U.S. Patent and Trademark Office to refuse the registration of trademarks that use the name of a particular living individual without his written consent,” she said.

Writing for the court, Justice Clarence Thomas said Thursday: “Elster contends that this prohibition violates his 1st Amendment right to free speech. We hold that it does not,”

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