WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today announced it is beginning a rulemaking process to remove medical bills from Americans’ credit reports. The CFPB outlined proposals under consideration that would help families financially recover from medical crises, stop debt collectors from coercing people into paying bills they may not even owe, and ensure that creditors are not relying on data that is often plagued with inaccuracies and mistakes.
“Research shows that medical bills have little predictive value in credit decisions, yet tens of millions of American households are dealing with medical debt on their credit reports,” said CFPB Director Rohit Chopra. “When someone gets sick, they should be able to focus on getting better, rather than fighting debt collectors trying to extort them into paying bills they may not even owe.”
A 2022 report found that roughly 20% of Americans report having medical debt, but previous research by the CFPB has shown that medical billing data on a credit report is less predictive of future repayment than reporting on traditional credit obligations. Mistakes and inaccuracies in medical billing are common and can be compounded by problems such as disputes over insurance payments or complex billing practices.
The Fair Credit Reporting Act restricts creditors’ ability to use medical information in making credit decisions and places limits on the inclusion of medical information on credit reports. The FCRA also granted five financial regulators authority to create regulatory exemptions to the restriction on creditors’ use of medical information, and in 2005, those regulators created an exception to allow creditors to rely on medical data if it could be characterized as “financial information.”
The document released today is an outline of proposals and alternatives under consideration for the CFPB’s medical debt rulemaking. If finalized, they would:
- Remove medical bills from consumers’ credit reports: Consumer reporting companies would be prohibited from including medical debts and
