Sponsors (6)
The bill protects people with medical debt from credit-reporting harms and expands financial inclusion, but does so at the cost of reducing lenders' access to risk signals—potentially raising borrowing costs, increasing uncompensated care burdens on providers, and imposing compliance costs on institutions and regulators.
Consumers with medical bills (especially low-income, uninsured, and people with chronic conditions) will no longer have medical debt appear on their credit reports, protecting credit scores and reducing the chance of denial for loans, housing, and other credit-based opportunities.
People who receive medical care will face less employment- and insurance-related discrimination from background credit checks that previously used medical-debt data.
Consumers with medical debt will encounter fewer barriers to accessing loans, credit cards, and mortgages, improving financial inclusion for those with health-related bills; the change also reduces incentives for aggressive collection practices and may encourage hospitals to expand charity or alternative repayment options.
Lenders, landlords, and other creditors will have less visibility into applicants' past medical-payment behavior, which could lead to stricter underwriting, higher interest rates or fees, and generally higher borrowing costs for many consumers.
Medical providers and debt collectors may face higher uncompensated-care costs if reporting limits reduce collection effectiveness, potentially shifting those costs into higher prices for patients or reduced services.
Narrowing permissible uses of consumer reports and prohibiting certain medical-debt uses will force financial institutions and other users of consumer reports to change operations, update systems, and adjust compliance practices.
Based on analysis of 3 sections of legislative text.
Removes adverse medical-debt information from consumer credit reports and bars creditors from using medical-debt data in credit decisions, with CFPB rulemaking due within one year.
Introduced July 29, 2025 by Jeff Merkley · Last progress July 29, 2025
Prohibits consumer reporting agencies and creditors from including or using adverse information about medical debt when reporting or deciding about credit. It adds a definition of “medical debt” into the Fair Credit Reporting Act, bars reporting of medical debt entries such as collections or charge-offs on consumer reports, and requires the CFPB to issue a regulation within one year forbidding creditors from obtaining or using medical-debt information for credit decisions.