Sponsors (18)
The bill removes medical-debt entries from credit files to improve privacy and credit access for people with medical debt, but that gain comes at the cost of reduced visibility for lenders—potentially raising borrowing costs, prompting alternative screening that shifts burdens to consumers, and creating compliance costs for institutions.
People with medical debt—particularly low-income individuals and patients with chronic conditions—will have medical-debt entries removed from credit reports, likely improving credit scores and increasing access to loans, mortgages, and rental housing.
Patients (especially those with chronic conditions) will face reduced exposure of sensitive health-related information in routine credit files, lowering privacy risks and the potential for discrimination based on health data.
Lenders and landlords will have less credit data about medical collections to assess borrower risk, which could lead to higher borrowing costs or stricter underwriting for a broad set of borrowers.
Some creditors may shift to alternative screening or noncredit medical data, which could transfer burdens onto consumers through higher fees, stricter terms, or other invasive screening approaches.
Removing limited exceptions in §1681b(g) may create compliance uncertainty and raise implementation and legal costs for consumer reporting agencies, financial institutions, and government users of credit data.
Based on analysis of 3 sections of legislative text.
Removes adverse medical-debt entries from consumer reports and bans creditors from obtaining or using medical-debt information when making credit decisions.
Prohibits consumer reporting agencies and creditors from using adverse information about medical debt when creating consumer credit reports or making credit decisions. It adds a statutory definition of “medical debt,” removes medical debt from permissible adverse entries in consumer reports, and directs the CFPB to issue a regulation within one year banning creditors from obtaining or using medical-debt information when deciding to extend credit.
Official title: To amend the Fair Credit Reporting Act to prohibit the inclusion of medical debt on a consumer report, and for other purposes.
Introduced July 29, 2025 by Nikema Williams · Last progress July 29, 2025