Medical debt erased from credit reports under new consumer protection bill
S. 2519 — Medical Debt Relief Act of 2025 · Filed by Jeff Merkley (D-OR) · 5 cosponsors · Introduced Jul 29, 2025 · Referred to committee
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What it does
This bill amends the Fair Credit Reporting Act to prohibit credit reporting agencies from including medical debt on consumer credit reports and bars creditors from using medical debt information when deciding whether to extend credit. It defines medical debt broadly as any debt arising from medical services, products, or devices, and requires the Consumer Financial Protection Bureau to issue regulations within one year to enforce the creditor prohibition.
Why we flagged it
The bill's operative mechanism is a straightforward exclusion of a category of debt from credit reporting and lending decisions. It is a protective measure aimed at shielding consumers from a specific harm (medical debt's impact on creditworthiness), not a deregulation, subsidy, or carve-out for a private party.
What the text implies
- Credit reporting agencies will need to retool data collection and reporting systems to identify and exclude medical debt, creating operational costs that may be passed to consumers through other fees or reduced service offerings.
- Lenders may respond by developing alternative underwriting methods (e.g., income verification, employment history, non-medical collections) that could disadvantage consumers without traditional credit histories or stable employment.
The full analysis lists 4 implications of this text.
Who stands to gain
consumers with medical debt; patient advocacy organizations; healthcare affordability nonprofits