Particle.news
Download on the App Store
19 ARTICLES
·
2w ago

Judge Vacates CFPB Rule to Remove Medical Debt From Credit Reports

A federal judge ruled that the CFPB overstepped its authority under the Fair Credit Reporting Act, leaving medical debt on the records of about 15 million Americans.

FILE - Medical bills are seen in Temple Hills, Md., on June 26, 2023. (AP Photo/Jacquelyn Martin, File)
© Aashish Kiphayet/Shutterstock
credit scores
The seal of the US Consumer Financial Protection Bureau (CFPB) at the agency's headquarters in Washington, DC, US, on Monday, Feb. 10, 2025.

Overview

  • On July 11, U.S. District Judge Sean Jordan vacated the CFPB’s medical debt rule, determining the agency lacked authority under the 1970 Fair Credit Reporting Act.
  • The overturned rule would have erased roughly $49 billion in unpaid medical bills from credit reports, boosting average scores by 20 points and enabling about 22,000 additional mortgages per year.
  • The Cornerstone Credit Union League and the Consumer Data Industry Association sued to block the rule, arguing it would undermine the accuracy and completeness of credit files, a suit later supported by the Trump administration.
  • Critics warn that by keeping medical debt on credit reports, lower-income and minority consumers could face higher borrowing costs and reduced access to loans.
  • Any future relief now hinges on CFPB rulemaking within statutory limits, congressional legislation or expanded protections enacted by individual states.