CFPB’s Medical Debt Credit Reporting Rule Finalized

As State has been sharing for more than a year, the CFPB continues with its medical debt credit reporting rulemaking process, publishing the final rule on January 7, 2025. Under the direction of State’s President & CEO Tim Haag, serving in his capacity as the Board President of ACA International, the trade association filed a lawsuit on January 9, challenging the rule in a Texas federal court.
While many healthcare providers ceased credit reporting years ago, the new reporting guidelines are impacting patient payment and recovery rates. This is because most patients were previously unaware that your organization did not credit report. Given the widespread media attention, some patients now erroneously believe that medical debts are no longer owed.
It also should be noted that the CFPB presented the rule to the members of the media as an outright ban on reporting medical debt, which is incorrect and misleading to the American consumer.  While medical debt may continue to be reported, it may not be considered by lenders in determining a consumer’s creditworthiness. This means that medical debt may appear on a consumer’s credit report when they review it but will not appear on the version sent to a lender. Likely, the nuances of this rule will further confuse consumers, which is against the spirit of the FDCPA.
Both Haag, and State’s General Counsel Mike Frost, are actively working with the ACA International and lobbyists to educate legislators on this rule’s illegality and unintended consequences to both patients and providers. Incoming Senate Banking Chair Tim Scott has stated his plans to use the Congressional Review Act to overturn Biden-era financial rules. It is expected that the CFPB’s medical debt credit reporting rules will be one of the initial targets.
State will continue to provide additional information on this critical issue as it is available.