Introduction
In a significant development for consumer credit rights, the Consumer Financial Protection Bureau (CFPB) has finalized a rule that prohibits the inclusion of medical debt on credit reports. Announced in January 2025, the rule aims to prevent millions of Americans from being penalized for medical bills when applying for loans or credit.
However, with the 2025 administration change and new legislative challenges, the future of this consumer protection hangs in the balance.
Medical Debt and Credit Reporting: The Background
Medical debt is a widespread issue in the United States, impacting over 100 million adults. According to the CFPB’s data, Americans carry over $88 billion in medical debt, much of it reported inaccurately.
What the CFPB’s New Rule Changes
The CFPB’s Final Rule eliminates the use of medical debt in credit reporting and lending decisions.
1. Medical Bills Banned from Credit Reports
Consumer reporting agencies can no longer include medical debts on the credit reports they provide to lenders.
2. Lenders Can’t Consider Medical Data
The rule also prohibits lenders from using any medical information when evaluating credit applications.
3. Eliminates Regulatory Exceptions
The CFPB removed existing regulatory exceptions that previously allowed some lenders to use medical information.
Benefits for Consumers
- Improved credit scores for millions.
- Increased access to credit, including an estimated 22,000 additional mortgage approvals annually.
- Greater privacy protections.
Read more from VeryWell Health and AP News.
Legal and Political Challenges Ahead
Legislative Push to Repeal the Rule
In March 2025, legislators introduced a bill to repeal the CFPB rule. This could reinstate medical debts on credit reports, affecting up to 100 million Americans.
Read more at InvestmentNews.
Administrative Uncertainty Under the Trump Administration
The CFPB, now led by Scott Bessent, has paused regulatory activity, raising questions about enforcement of the rule.
Source: Wall Street Journal
Consumer Advocacy Perspective
Groups such as the American Association of People with Disabilities (AAPD) argue this rollback would disproportionately impact vulnerable populations.
See the AAPD’s statement here.
Conclusion: What This Means for You
As of now, medical debt is no longer included in consumer credit reports. However, given the shifting political landscape, this protection could be reversed.
At SUE YOUR DEALER – A LAW FIRM, we monitor these developments closely. If you believe your credit report has been impacted by unlawful medical debt reporting, contact us today for a free consultation.