Overview

• U.S. District Judge Sean Jordan ruled on July 11 that the CFPB exceeded its authority under the Fair Credit Reporting Act in finalizing the medical debt removal rule.
• The overturned regulation had aimed to strip roughly $49 billion in unpaid medical bills from credit files of about 15 million Americans to boost scores by 20 points on average and open the door to 22,000 more mortgages each year.
• The CFPB has declined to indicate an appeal, and experts say new rulemaking or legislative fixes face steep judicial and political hurdles.
• Industry groups such as the Consumer Data Industry Association and several House Republicans challenged the rule over concerns that it would undermine the completeness and accuracy of consumer credit reports.
• With the rule vacated, millions of people remain vulnerable to higher interest rates and limited loan access as medical debt continues to weigh on their credit histories.