Medical debt erased from credit reports under new consumer protection bill

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 CFPB's one-year rulemaking deadline may create regulatory uncertainty during the transition period, potentially causing lenders to adopt conservative lending postures that reduce credit availability.
• Medical providers and debt collectors may shift collection strategies away from credit reporting toward more aggressive direct collection, wage garnishment, or litigation — moving the harm off the credit system but not eliminating it.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Ordinary consumers are protected from having medical debt damage their credit scores and borrowing prospects. Medical debt is often involuntary and unrelated to creditworthiness; removing it from credit reports reduces barriers to credit access and shields consumers from cascading financial harm triggered by illness or injury.

Who stands to gain

• consumers with medical debt
• patient advocacy organizations
• healthcare affordability nonprofits

Named in the bill

Fair Credit Reporting Act (FCRA), Consumer Financial Protection Bureau (CFPB), Equal Credit Opportunity Act (ECOA), credit reporting agencies, creditors, medical providers, debt collectors

Where it stands

5 cosponsors: 5 Democrats.

• Jul 29, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Jul 29, 2025 — Referred to Senate Committee on Banking, Housing, and Urban Affairs · Congress.gov: “Read twice and referred to the Committee on Banking, Housing, and Urban Affairs”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $50,000 in lobbying spend. A filing names 5 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Jeff Merkley, the sponsor, reported $514,925 in PAC receipts in the 2026 cycle.

• Air Methods Corporation — $50,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.