Rounds Leads Resolution to Overturn Biden-Era Medical Debt Rule
The final rule was submitted on January 7, 2025, less than two weeks prior to the end of Biden’s term
WASHINGTON – U.S. Senator Mike Rounds (R-S.D.) today filed a Congressional Review Act (CRA) resolution to repeal the Consumer Financial Protection Bureau’s (CFPB) Medical Debt Rule, which bans credit bureaus from including medical debt on credit reports.
“The CFPB going beyond their statutory authority to eliminate all medical debt from credit reports is irresponsible and a clear example of regulatory overreach,” said Rounds. “This rule gives credit card companies a less clear credit picture of who they’re lending money to, which could lead to banks limiting access to capital for consumers. In addition, this rule goes beyond the CFPB’s rulemaking authority by banning practices that were expressly permitted by Congress in the Fair Credit Reporting Act. This resolution would overturn this rule created in the waning hours of the Biden administration.”
The CFPB issued a final rule on January 7, 2025, which would introduce sweeping changes to information related to the payment of medical debt for underwriting purposes. The rule removes a financial information exception for medical accounts and adds a restriction that forbids consumer reporting agencies from supplying medical account information to creditors when they determine a person’s ability to take on new debt or expand existing obligations.
In addition, the rule exceeds the CFPB’s statutory authority under the Fair Credit Reporting Act (FCRA). The FCRA explicitly allows consumer reporting agencies to include coded medical debt information in credit determinations. The final rule issued by CFPB would ban that rule.
This resolution is cosponsored by Banking Committee Chairman Tim Scott (R-S.C.) and Senators Mike Crapo (R-Idaho), Bill Hagerty (R-Tenn.) and Cynthia Lummis (R-Wyo.).
“Medical debt is a serious challenge for many Americans, but this rule will do nothing to address the underlying issues,” said Scott. “Instead, it will reduce access to credit and important health care services for those most in need. I’m focused on working with President Trump and my colleagues on serious solutions to reverse the damage caused by the Biden administration and to provide relief to American families.”
“President Biden spent the last four years awarding unprecedented levels of power to unelected bureaucrats, and this CFPB rule is another example of Biden’s 11th hour regulatory overreach. Our resolution overturns this overstep,” said Lummis.
This legislation is endorsed by the American Bankers Association, the U.S. Chamber of Commerce, ACA International, the Receivables Management Association International, the Online Lenders Association, the American Financial Services Association and the Innovative Lending Platform Association.
Click HERE to read the full text of the CRA.
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