Overview
- The bureau issued an interpretive rule asserting that the Fair Credit Reporting Act generally preempts state efforts to keep medical bills off consumer credit files.
- More than a dozen states, including New York, California, Colorado, Minnesota and much of New England, have enacted laws limiting the reporting of medical debt.
- The guidance does not immediately roll back existing state protections, but consumer advocates expect litigation and a chilling effect on new state measures.
- The move follows a Texas federal judge’s decision to scrap a Biden-era rule that would have removed medical debt from credit reports nationwide after the current administration declined to defend it.
- Medical debt remains extensive—about $220 billion owed and roughly 100 million people affected—even after credit bureaus stopped reporting debts under $500 in 2023, with potential subsidy expirations threatening to push more families into debt.