Trump CFPB takes aim at 15 states that ban medical debt on credit reports—it's 'salt in the wound,' says consumer advocate

The administration of President Donald Trump is taking aim at state laws that ban the inclusion of medical debt on consumers’ credit reports.

In late October, the Consumer Financial Protection Bureau released what’s known as an interpretive rule, stating that laws prohibiting medical debt reporting in 15 states are preempted by the Fair Credit Reporting Act.

Though the move is not legally binding, it marks an abrupt about-face from CFPB guidance during former President Joe Biden’s administration, which allowed states to make their own credit rules as long as they weren’t “inconsistent” with the federal law. A state requiring each credit agency to provide consumers with two free credit reports per year, for instance, would not be at odds with the FCRA, which requires one.

Consumer credit advocates are sounding the alarm. Millions of Americans are already facing the possibility of rising health-care premiums, a reality that could force more people into medical debt, says Chi Chi Wu, a senior attorney at the National Consumer Law Center.

Should medical debt protections fall, “now we’re going to make it even worse by ruining your credit record,” Wu says. “It’s just insult to injury. It’s rubbing salt in the wound.”