The Consumer Financial Protection Bureau (CFPB) is requesting public comment on the Fair Credit Reporting Act (FCRA) Medical Debt Notice of Proposed Rulemaking which would stop credit reporting companies from sharing medical debts with lenders and prohibit lenders from making lending decisions based on medical bill data. The proposed rule is part of the CFPB’s efforts to address the burden of medical debt and coercive credit reporting practices. The deadline to submit public comments is August 12, 2024.
The proposed rule would remove medical bills from most credit reports, increase privacy protections, increase credit scores and loan approvals, and prevent debt collections from using the credit reporting system to force people to pay.
Specifically, the proposed rule would:
Eliminate the special medical debt exception which broadly permits lenders to obtain and use information about medical debt to make credit eligibility determinations. Lenders would continue to be able to consider medical information related to disability income and similar benefits, as well as medical information relevant to the purpose of the loan, so long as certain conditions are met.
Establish guardrails for credit reporting companies to prohibit credit reporting companies from including medical debt on credit reports sent to creditors when creditors are prohibited from considering it.
Ban repossession of medical devices as collateral for a loan, and bans lenders from repossessing medical devices, like wheelchairs or prosthetic limbs, if people are unable to repay the loan.
Additional information can be found on the Federal Register.