Summary

Adds a definition of "medical debt" to the Fair Credit Reporting Act, changes how medical-debt information can appear in consumer credit reports, and directs the Consumer Financial Protection Bureau (CFPB) to issue a rule within one year that prevents creditors from obtaining or using a consumer's medical-debt information when making credit decisions. The law aims to limit the role of medical debts in credit reporting and in lenders' underwriting decisions.

Key Points

• Establishes a statutory definition of "medical debt" in the Fair Credit Reporting Act.
• Limits how medical-debt information can appear on consumer credit reports by changing adverse-information rules.
• Directs the CFPB to issue a rule within one year banning creditors from obtaining or using medical-debt information in credit decisions.
• Relies on existing Equal Credit Opportunity Act definitions for terms like “credit” and “creditor.”
• Shifts decision-making tools away from medical-debt data, potentially improving credit reports for people with medical bills.
• Requires updates to credit reporting and collections practices, creating compliance tasks for CRAs, furnishers, and creditors.
• Does not create new funding or appropriation; implementation occurs through CFPB rulemaking and existing enforcement authorities.
• Affects lenders' underwriting data sources and may cause lenders to adjust risk models and pricing in response.

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