Sponsors (6)
The bill reduces financial and privacy harms for people with medical debt by excluding medical‑debt data from credit use, but at the cost of removing risk signals that lenders rely on—potentially raising borrowing costs, compliance burdens, and prompting use of alternative data with fairness concerns.
Low-income people, uninsured individuals, and patients with chronic conditions will have medical-debt entries removed from credit reports or excluded from lending decisions, improving credit scores and increasing chances of loan or credit approval.
Patients who accumulate medical bills will face less long-term financial harm (fewer barriers to housing and employment) because medical collection activity will not be used in credit reporting or lending decisions.
Consumers' sensitive medical information will be better protected from third‑party access and use in credit decisions, strengthening medical privacy and limiting disclosure of health-related financial data.
Lenders and creditors will have less medical-debt information to assess risk, which could prompt tighter underwriting or higher interest rates and fees, raising borrowing costs for many consumers.
Credit reporting agencies, furnishers, lenders, and the CFPB will incur administrative and compliance costs to change systems and implement new rules; those costs may be passed on to consumers or increase government administrative burden.
Removing medical-collection data may reduce the predictive power of existing credit-scoring models, increasing reliance on alternative data that could introduce new privacy risks or fairness biases and potentially raise default rates.
Based on analysis of 3 sections of legislative text.
Excludes adverse medical-debt information from consumer reports and bans creditors from using medical-debt data when making credit decisions.
Introduced July 29, 2025 by Jeff Merkley · Last progress July 29, 2025
Removes medical-debt information from consumer credit reports and stops creditors from using medical-debt data when making lending decisions. The bill adds a statutory definition of "medical debt," categorically excludes any adverse information related to medical debt from consumer reports, and directs the CFPB to ban creditors from obtaining or using medical-debt information in credit decisions within one year.