Federal Court Asked to Vacate Medical Debt Reporting Rule 

The motion questions the CFPB’s authority in issuing its final rule that restricts the inclusion of medical debt information in credit reports provided to creditors. Notably, the CFPB has agreed with the plaintiffs’ argument, indicating a shift in position on the matter. 

According to the filing, the Fair Credit Reporting Act (FCRA) and the Administrative Procedure Act allow consumer reporting agencies (CRAs) to include medical debt information—so long as it is coded in a way that protects consumer privacy. These codes are intended to obscure details about specific medical conditions, treatments, or providers. 

As the motion explains, “The statute expressly permits CRAs to include a consumer’s medical debt information on their consumer report, as long as the information is coded to hide the consumer’s underlying health condition, procedure, or provider.” The contested rule, however, prohibits CRAs from sharing even this coded medical debt information with creditors. 

The parties also agree that creditors are permitted to review medical data as long as the coding does not reveal or suggest identifiable health information. In their view, the current rule exceeds the CFPB’s statutory authority by restricting information that federal law allows. 

The motion points to the court’s precedent, which supports vacating agency rules that conflict with existing law. The parties contend that this approach applies here, as the rule’s issues cannot be resolved through further agency revision. 

If granted, the request could restore prior standards for reporting medical debt, influencing how credit decisions incorporate such information while maintaining consumer privacy protections.