The CFPB’s proposal to remove medical debt information from most credit reports would upend credit unions’ member-centric approach and prevent lenders from getting the full financial picture, America’s Credit Unions Head of Regulatory Advocacy Ann Petros wrote in CUInsight Tuesday. Petros said policies that directly contribute to incomplete credit reports will ultimately result in less access to credit.

“The CFPB’s proposal would muddy the waters by reducing lender confidence and impacting pricing decisions, ultimately leading to less loan availability as many community financial institutions will be unable to handle the increased risk,” she wrote. “This wouldn’t impact just one product. If finalized, this rule would have a seismic negative impact on borrowers looking to buy a home, start a small business, or pay for higher education.

“Incomplete credit histories are an obstacle to safe, sound lending, and the CFPB’s proposal would increase that obstacle exponentially,” Petros added.

Legacy CUNA and NAFCU members can view the latest Regulatory Comment outlining the proposal and its impact.

Comments on the proposal are due to the CFPB August 12, and feedback can be submitted to America’s Credit Unions by July 29.