North Carolina Expands Medical Debt Relief and Urges Credit Reporting Reform

Following the Consumer Financial Protection Bureau’s (CFPB) release of updated guidance on credit reporting standards under the Fair Credit Reporting Act, Governor Stein sent a letter to the chief executives of Equifax, Experian, and TransUnion. In the letter, he urged the agencies to reaffirm their commitment to removing medical debt that has been forgiven, paid, or settled from consumer credit files and to continue expanding efforts to protect consumers from the long-term impact of medical debt. 

“In light of the CFPB’s recent action, I urge you to reiterate to North Carolina consumers your continued commitment to removing medical debt that has been forgiven, paid, or settled from their credit files,” Stein wrote. 

Stein also encouraged the agencies to build on credit reporting changes implemented in 2022, which removed paid medical debt and debt under $500 from credit reports. He emphasized that ongoing reporting of relieved medical debt can hinder individuals’ financial recovery and economic participation. 

According to the Governor’s Office press release, the discussion featured advocates, faith leaders, healthcare professionals, and patients who shared how medical debt relief has improved financial stability and access to care. 

The North Carolina Department of Health and Human Services (NCDHHS), in partnership with hospitals and the nonprofit Undue Medical Debt, administers the program. Hospitals participating in the initiative are required to relieve old medical debt for eligible residents and adopt stronger charity care policies to prevent future debt accumulation. Residents began receiving notifications in mid-October confirming partial or complete forgiveness of their medical debt. 

However, the program’s structure has drawn some debate. In September 2025, the Committee for a Responsible Federal Budget released a report questioning whether using hospital incentive payments is the most efficient way to achieve debt relief. The report recommended that states consider direct debt purchase programs or other targeted mechanisms instead. 

As of late 2025, North Carolina’s Medical Debt Relief Program remains one of the largest state-led efforts of its kind in the United States. The program continues to eliminate qualifying medical debt for eligible residents and influence credit reporting practices through coordination with federal guidance and national credit bureaus. State officials report that implementation and evaluation of the program will continue into 2026 as hospitals, nonprofit partners, and regulators assess its long-term financial and administrative outcomes.