Texas court ends federal medical-debt credit reporting rule

A Texas district court, in response to a joint request from the Consumer Financial Protection Bureau and trade industry associations, just vacated the bureau’s own rule that had prohibited most medical debt on credit reports.

The Biden-era CFPB finalized a rule in January to ban medical bills on credit reports and to prohibit lenders from using medical information in their lending decisions. Trade industry associations sued the CFPB, alleging that the rule was unlawful and exceeded the Bureau’s statutory authority. Months later, the Trump-era CFPB joined the credit industry in requesting the rule’s reversal.

In its initial announcement of the final rule, the CFPB estimated that the policy would have removed “an estimated $49 billion in medical bills from the credit reports of about 15 million Americans.”