Medical Debt Relief Act of 2025
- Sponsor
- Rep. Williams, Nikema [D-GA-5]
- Committees
- Financial Services Committee (primary)
- Last action
- Jul 29, 2025
Bottom line
The bill aims to remove medical debt from consumer credit reports and prevent its use in credit decisions, thereby potentially improving credit access and financial stability for individuals with such debt.
What it actually does
This bill amends the Fair Credit Reporting Act (FCRA) to explicitly prohibit consumer reporting agencies from including any adverse information related to medical debt on a consumer report. It also mandates that the Bureau of Consumer Financial Protection (BCFP) amend its regulations to prevent creditors from obtaining or using medical debt information when making credit extension decisions.
Proponents argue
Supporters argue that medical debt is often unexpected and involuntary, unlike other forms of debt, and should not negatively impact a consumer's creditworthiness. They contend that removing medical debt from credit reports will help millions of Americans access essential credit, such as mortgages and car loans, and reduce financial stress, especially for those facing health crises.
Opponents contend
Opponents might argue that medical debt, like any other debt, reflects a consumer's ability to manage financial obligations and should therefore be included in credit reports to provide a complete picture for creditors. They may contend that excluding medical debt could obscure relevant risk factors for lenders, potentially leading to less accurate credit assessments or increased lending risks.
The bill is very short and clear, making it highly accessible for a quick review by an informed reader.
Section 2(a), amending Section 603 of FCRA
Definition of Medical Debt
This provision adds a new definition to the Fair Credit Reporting Act, specifying that 'medical debt' refers to any debt, in whole or in part, arising from the receipt of medical services, products, or devices. This broad definition ensures comprehensive coverage for the subsequent prohibitions on reporting and using such debt.
Supporters argue
Supporters argue that a clear and broad definition is essential to ensure that all forms of debt related to healthcare are covered by the protections, preventing loopholes that could undermine the bill's intent.
Critics contend
No specific opposition is typically raised against definitional provisions unless the definition itself is seen as overly broad or narrow, which is not the case here.
Tradeoffs
The tension lies in ensuring the definition is broad enough to protect consumers without inadvertently covering non-medical financial obligations, striking a balance for comprehensive coverage.
Section 2(b)(1), amending Section 605(a) of FCRA
Prohibition on Reporting Medical Debt
This section amends the Fair Credit Reporting Act to explicitly prohibit consumer reporting agencies from including any adverse information related to medical debt on a consumer report. This includes medical debt that has been placed for collection, charged off, or subjected to similar actions, effectively removing it from credit reports.
Section 2(b)(2), amending Section 604(g) of FCRA
Conforming Amendments for Medical Information Use
This section makes necessary technical adjustments to other parts of the Fair Credit Reporting Act, specifically Section 604(g), which deals with the permissible purposes of consumer reports. It removes previous exceptions that allowed for the use of medical contact information or other medical information under certain conditions, aligning the act with the new prohibition on reporting medical debt.
Section 3(b), amending Section 1022.30 of title 12, Code of Federal Regulations
BCFP Regulation to Prohibit Use of Medical Debt Information by Creditors
This provision mandates the Director of the Bureau of Consumer Financial Protection (BCFP) to amend existing regulations within one year of the bill's enactment. The amendment will prohibit creditors from obtaining or using information related to a consumer's medical debt when deciding whether to extend credit. This goes beyond just credit reporting and directly restricts creditors' access and use of such information.
This provision strikes existing language in Section 604(g) of the FCRA that allowed for the use of 'medical contact information' and other 'medical information' under specific circumstances, ensuring that no medical debt-related information can be used for credit reporting purposes.
Section 2(b)(2)
Why it matters:This is standard legislative practice for ensuring consistency across a statute when a primary section is amended. It's not necessarily evasive but requires careful reading to understand the full scope of the change and its implications for data use.
Case for: Supporters argue these amendments are essential to prevent loopholes, ensuring that the prohibition on medical debt reporting is comprehensive and cannot be circumvented by using other forms of medical information.
Case against: No specific opposition is typically raised against technical conforming amendments unless they are seen as having an unintended substantive effect beyond the stated policy goal.
Estimated impact: Ensures full implementation of the bill's intent to remove medical debt from credit considerations by eliminating any residual pathways for medical information use.