277 consumer advocate groups join in opposition to the attempt
Quick take
- Legislation to Overturn Medical Debt Rule: U.S. Senator Mike Rounds and Representative Ralph Norman introduced resolutions to overturn a Consumer Financial Protection Bureau (CFPB) rule that removes medical debt from credit reports.
- Opposition from Consumer Advocates: Over 277 organizations oppose the resolutions, arguing that medical debt should not impact credit scores and disproportionately harms vulnerable communities.
- Potential Consequences: If overturned, the rule would allow lenders to consider medical debt in credit decisions, making it harder for millions of Americans to obtain loans, housing, or jobs.
A closer look
U.S. Senator Mike Rounds (R-SD) and Representative Ralph Norman (R-SC) introduced bills today aiming to overturn a Consumer Financial Protection Bureau (CFPB) rule that removes medical debt from credit reports. The targeted rule, widely supported by consumer advocacy groups, seeks to prevent lenders from considering outstanding medical bills when making credit decisions.
Consumer advocates warn that repealing therule would causemillions of Americans to continue suffering financial harm due to medical debt.
Senator Rounds and Representative Normans bill would yank away an important protection from 15 million hardworking Americans and allow medical debt to keep damaging their credit scores, saidChi Chi Wu, senior attorney at the National Consumer Law Center,
Wu criticized the proposed legislation, arguing that being sick and having medical bills has little to do with whether people will pay their loan payments.
Credit scores affected
The proposed resolutionswere introduced under the Congressional Review Act (CRA), which allows Congress to overturn federal agency rules using a fast-track process with presidential approval. If passed, this move could reinstate the reporting of medical debt on credit scores, including disputed or erroneous bills, and make it harder for Americans to access affordable credit.
Consumer protection groups and civil rights organizations strongly oppose the resolutions.
Medical debt should not prevent people from getting a loan for a car, a house, or starting a new business. We urge members of Congress to vote against keeping medical debt on credit scores and to focus instead on addressing the root causes of the medical debt crisis, saidMona Shah, senior director of policy at Community Catalyst.
Despite voluntary steps taken by credit bureaus Equifax, TransUnion, and Experian to remove some medical collection debts since 2022, the CFPB found that as of 2024, 15 million Americans still had over $49 billion in outstanding medical debt on their credit reports.
Data indicates that communities in the South, predominantly Black and Latino neighborhoods, and individuals with disabilities are disproportionately burdened by medical debt. Veterans and active-duty military members are also significantly affected, holding an estimated $6 billion in medical debt.
Criticspointed to the broader societal impact. Chuck Bell, advocacy program director at Consumer Reports, argued that credit-damaging medical debt can shut off access to affordable loans and other financial opportunities, like getting a job or renting an apartment. Faith leaders, including Rev. Cassandra Gould of the Faith in Action National Network, framed the issue as a moral concern, condemning the financial burden of medical debt as contrary to principles of caring for the sick.
The battle over medical debt reporting is likely to intensify in Congress, with consumer groups continuing to push for the protection of the CFPB rule, while lawmakers like Rounds and Norman seek to reinstate medical debt as a factor in lending decisions.
Posted: 2025-03-13 21:21:17
