Follows proposed 2023 rulemaking to limit medical debt in credit reporting, #185494.
Proposal Highlights
Eliminates the special medical debt exception, establishes guardrails for credit reporting companies and bans repossession of medical devices as collateral for a loan.
Increases privacy protections, helps increase credit scores and loan approvals, and prevents debt collectors from using credit reporting system to coerce people to pay.
Proposal stops credit reporting companies from sharing medical debts with lenders.
Also prohibits lenders from making lending decisions based on medical information.
Regulatory loophole has kept medical debt information in the credit reporting system.
Proposed rule would close loophole, help ensure that medical information does not unjustly damage credit scores, and keep debt collectors from coercing payments.
Americans with medical debt on credit reports will see credit scores rise by 20 points.
Director Remarks
CFPB Director Rohit Chopra spoke on proposed ban of medical bills on credit reports.
Credit reporting system is intended to help lenders assess if loan will be repaid.
Medical bills on credit reports too often are inaccurate and have little predictive value.
CFPB research has found broad concerns regarding the accuracy of medical bills.
Including harassment of individuals with allegedly unpaid medical bills and debt collectors telling consumers they were responsible for debts incurred by identity theft.
The CFPB is seeking to end the senseless practice of weaponizing the credit reporting system to coerce patients into paying medical bills that they are not responsible for.
Consultation
Comments on the proposal must be received on or before Aug. 12, 2024.
Jun. 11, 2024 White House Fact Sheet
On Jun. 11, 2024, White House issued fact sheet on the medical debt proposal.
Jun. 18, 2024 CFPB Federal Register
On Jun. 18, 2024, CFPB published the proposed rule in the federal register.
In Aug. 2024, CAL AG issued support against medical debt reporting, see #222725.
In Aug. 2024, House FSC commented with concerns on proposal, see #223168.
Jan. 7, 2025 CFPB Final Rule
On Jan. 7, 2025, CFPB finalized rule to remove medical bills from credit reports.
Provided executive summary, unofficial redline; also, White House issued a fact sheet.
Final rule effective 60 days after publication in the federal register, Mar. 17, 2025.
Jan. 14, 2025 CFPB Fed Reg Final Rule
On Jan. 14, 2025, CFPB published final rule amending Regulation V in federal register.
Prohibits medical information being considered in credit eligibility determinations.
Final rule removes a regulatory exception that had permitted creditors to obtain and use information on medical debts notwithstanding this statutory limitation.
Consumer reporting agency generally may not furnish to a creditor a consumer report containing information on medical debt that the creditor is prohibited from using.
In Jan. 2025, US ACU issued blog on CFPB final medical debt, credit rule, #241485.
Jan. 27, 2025 CFPB Fed Reg Corrections
On Jan. 27, 2025, CFPB published corrections to the final rule in the federal register.
Updated dates section to reflect the correct effectiveness of final rule, Mar. 17, 2025.
In Jan. 2024, CFPB letters in support of State legislation introduced, see #241919.
