A federal judge struck down a Biden-era CFPB rule that aimed to exclude certain medical debts from consumer credit reports. The ruling stated the CFPB exceeded its authority under the Fair Credit Reporting Act. A lawsuit filed by industry groups claimed only Congress could make such regulatory changes. Senator Raphael Warnock and other Democrats expressed concern in a letter to the CFPB, highlighting inaccuracies in medical debt collections and their limited relevance in assessing repayment ability. Consequently, medical debts will continue to impact consumer credit reports.
On July 11, 2025, U.S. District Judge Sean Jordan of the Eastern District Court in Texas reversed the Biden-era rule, asserting it exceeded the CFPB's authority under the FCRA.
The federal lawsuit was filed on January 7, the same day the Biden-era rule had been finalized, claiming the rule violated the law and only Congress could authorize such changes.
Senate Democrats, led by Raphael Warnock, questioned the CFPB on the reversal, noting that "Medical debt collections information is often inaccurate, and studies show that it is not useful in determining a consumer's ability to repay other debts."
The rule had prohibited creditors from considering medical information when determining credit eligibility and restricted credit reporting agencies from including certain types of medical debt information in consumer credit reports.
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