On Tuesday, January 7, 2025, the Biden administration announced a final rule from the Consumer Financial Protection Bureau (CFPB) to remove medical debt from consumer credit reports. This rule will take effect in 60 days.  

Back in 2022, the CFPB reported that medical bills made up a staggering $88 billion of the debts on credit reports. Following that, in July 2023, TransUnion, Experian, and Equifax rolled out policies to keep medical debts under $500 off credit reports. Even with those changes, 15 million Americans still have about $49 billion in unpaid medical bills in collections showing up on their credit reports.  

The new rule from the CFPB will eliminate the remaining $49 billion in medical debt from credit reports, impacting those 15 million Americans. Once this rule goes into effect, no medical debt will be listed on consumer credit reports.  

Bloomberg recently reported that a trade group representing consumer credit reporting companies, along with a Texas-based credit union association, has sued to block the CFPB’s new rule. These groups argue that the ban will make it harder for lenders, employers, and rental housing providers to make informed decisions about borrowers’ creditworthiness. This lawsuit may be the first of many challenges to the rule. 

We will continue to monitor this development and share updates as we learn more. 

Be sure to subscribe to Zotec Answers – we will be releasing a deep-dive episode on this topic in the coming weeks. 

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