Federal judge considering rule preventing medical debt from affecting credit reports, impacting 15 million people

From Yahoo Finance: 2025-06-23 11:24:00

A federal judge is considering arguments challenging a rule preventing medical debt from affecting credit reports. The CFPB has stopped defending the rule, allowing the National Consumer Law Center to intervene. The judge is expected to rule by August 11, impacting 15 million people and potentially increasing credit scores by 20 points.

The lawsuit involves two trade associations representing credit unions and credit bureaus challenging the legality of the rule. Plaintiffs argue the rule violates the Fair Credit Reporting Act. The CFPB has declined to defend the rule, which could impact consumers’ access to credit and borrowing costs across various financial products.

The rule, enacted by the Biden administration in January, aims to remove $49 billion in medical debt from credit reports. The three major credit bureaus have previously removed medical debts under $500 from reports. The decision on the medical debt rule is part of a broader effort to narrow the CFPB’s scope and reduce staffing.

The CFPB has argued that unpaid medical bills have little predictive value for lenders. The final ruling on the medical debt rule will have significant implications for millions of consumers and could impact their credit scores and access to credit products. The judge is currently reviewing briefs from all parties involved in the case.



Read more at Yahoo Finance: CFPB medical debt rule weighed