The Consumer Financial Protection Bureau (CFPB) sent a letter to the Massachusetts Legislature supporting bills HD. 3503 and SD. 1878 that would prohibit medical creditors and debt collectors from reporting medical debt to consumer reporting agencies and bar consumer reporting agencies from including medical debt information in consumer reports. The CFPB argued that preemption of state law is narrow under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, citing its 2022 interpretive rule that, with limited exceptions, states may enact additional consumer reporting protections and that state prohibitions on furnishing medical debt information would generally not be preempted. The letter also referenced the CFPB’s 7 January 2025 final rule banning the inclusion of medical bills on lender-used credit reports and prohibiting lenders from using medical information in lending decisions, noting that the rule has been challenged in two lawsuits filed in Texas. It pointed to appellate decisions upholding state medical-debt measures against preemption challenges and reiterated CFPB research and industry actions cited as support for the view that medical debt is less predictive of credit performance and often unreliable in collections reporting.
Consumer Financial Protection Bureau 2025-01-28
Consumer Financial Protection Bureau urges Massachusetts lawmakers to bar medical debt from credit reports
The Consumer Financial Protection Bureau sent a letter to the Massachusetts Legislature supporting bills HD. 3503 and SD. 1878 to prohibit medical creditors and debt collectors from reporting medical debt to consumer reporting agencies and to bar such agencies from including medical debt in consumer reports. The Bureau argued that such state measures are generally not preempted by the Fair Debt Collection Practices Act or the Fair Credit Reporting Act, referenced its 7 January 2025 final rule banning medical bills from most credit reports (currently under legal challenge in Texas), and cited appellate decisions and its own research indicating medical debt is less predictive of credit performance and often unreliable.