Trump Administration Takes Aim at State Laws Protecting Medical Debt Reporting

Thu Oct 30 2025 17:00:13 GMT+0200 (Eastern European Standard Time)

The CFPB is working to overrule state laws that shield consumer credit reports from the shadow of medical debt, controversially aligning with national standards set by the Fair Credit Reporting Act.

The Trump administration's Consumer Financial Protection Bureau (CFPB) plans to dismantle state protections that prevent medical debt from impacting consumer credit reports. This reversal boatered by a draft interpretative rule suggests that the Fair Credit Reporting Act (FCRA) should dominate state legislation on debt reporting. As states like New York and Delaware move to ban medical debt disclosure, critics worry this shift will harm consumers and deepen financial struggles. Currently, the Kaiser Family Foundation estimates Americans are burdened by around $220 billion in medical debt, affecting individuals’ creditworthiness and loan accessibility.

NEW YORK (AP) — The Trump administration is making moves to overturn state laws protecting consumer credit reports from medical debt and other financial issues.

The Consumer Financial Protection Bureau has drafted what’s known as an interpretative rule regarding the Fair Credit Reporting Act (FCRA), suggesting that this act should override any state legislation concerning debt reporting to credit bureaus like Experian, Equifax, and TransUnion.

This decision reverses previous regulations established by the Biden administration, which allowed states like New York and Delaware to implement their own restrictions on medical debt reporting.

Medical debt is often a significant point of contention on credit reports, with delays in insurance payments and high costs leading many patients to struggle financially.

In 2023, the three major credit bureaus announced they would cease tracking medical debts under $500, potentially eliminating up to 70% of reported medical debts. However, several states have gone beyond this initiative, banning any reporting on medical debts.

The CFPB justifies its new regulations by asserting that Congress intended to create nationwide standards through the FCRA, suggesting that state laws contradict this aim.

According to estimates from the Kaiser Family Foundation, Americans currently owe approximately $220 billion due to medical debt, with one in six individuals in certain Republican-controlled states like South Dakota and Mississippi grappling with unpaid medical bills.

Outstanding medical debt can severely impact an individual’s ability to secure mortgages, credit cards, or auto loans.

A spokesperson for the CFPB has yet to comment on this controversial move.