Evan Weinberger reports:
A federal credit reporting law generally takes precedence over state measures barring medical debt and other items on consumer credit reports, the Trump administration said.
Several states including Colorado, New York, and Maryland have passed medical debt reporting bans. But those laws are preempted by the Fair Credit Reporting Act and courts should overturn them, “consistent with Congress’s intent to create national standards for the credit reporting system,” the Consumer Financial Protection Bureau said in an interpretive rule set to be published Tuesday.
The new policy would replace preemption guidance the CFPB issued in 2022, according to the Federal Register filing. The CFPB in May withdrew the previous interpretive rule along with nearly 70 other guidance documents.
The latest change comes as Obamacare health insurance premiums are set to spike unless Congress can agree to extend federal subsidies, a key issue in the federal government shutdown that began Oct. 1.
Premium increases could leave millions of Americans without health insurance and struggling to pay bills. Allowing medical debt to appear on credit reports would add “salt to the wound” by making it harder for those consumers to get access to credit, said Chi Chi Wu, a National Consumer Law Center attorney who focuses on credit reporting issues.
Read more at Bloomberg Law.