Medical Debt Will Stay on Credit Reports, Federal Judge Rules

A federal judge in Texas has struck down a rule from the Consumer Financial Protection Bureau (CFPB) that would have barred medical debt from appearing on credit reports. The CFPB had argued that medical bills were unreliable indicators of creditworthiness and sought to prevent lenders from using them in financial decisions. The court sided with the Cornerstone Credit Union League, ruling the CFPB overstepped its authority. Advocates decried the decision as a setback for millions struggling with medical debt, while credit bureaus applauded the ruling for maintaining a “full, fair, and accurate” credit system. The controversy highlights a uniquely American crisis—nearly 100 million Americans carry healthcare debt. While some states are trying to limit medical debt’s impact, the court’s ruling undermines federal efforts to offer protection.

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Source: NPR