WASHINGTON — Today, Representative Lou Correa (CA-46), alongside Representative Nikema Williams (GA-05) and Senator Jeff Merkley (D-OR), introduced the Medical Debt Relief Act which would ban all medical debt from appearing on credit reports and prohibit creditors from considering Americans’ medical debt in their decisions on whether to extend them credit. This push comes following recent efforts by the Trump Administration to roll back federal protections aiming to keep medical debt off Americans’ credit reports.
“Every year far too many hardworking Americans are crushed by medical debt. Even after families have paid their bills, their credit scores still take a nosedive. It’s simple: your health should never bankrupt you,” said Correa. “This legislation helps families get back on their feet without punishing them for being sick. I’ll keep fighting for common sense policies that help families get ahead and stay healthy.”
1-in-5 Americans reported having medical debt, and it is the number one reason Americans file for bankruptcy. Medical debt is the most common type of consumer debt in collection, accounting for over $88 billion of all consumer debt. Medical debt also tends to plague the most vulnerable, including the uninsured, those who are chronically ill or disabled, and minority communities.
The Medical Debt Relief Act protects patients from the financial harm that medical debt causes and codifies a federal Consumer Financial Protection Bureau (CFPB) rule that removed medical debt from credit reports for 15 million people. Specifically, the bill:
- Excludes all medical debt from credit reports; and
- Requires the Director of the CFPB to prohibit creditors from obtaining or using consumers’ medical debt in credit decisions.
“Every patient should be able to get the care they need without fear of financial ruin,” said Merkley. “America’s medical debt crisis is harming families nationwide, but instead of working to help working families, the Trump Administration is repealing a federal safeguard that removed medical debt from credit reports for 15 million people. The medical debt reporting system is badly broken, and we must do all we can to relieve patients of this tremendous burden. Our Medical Debt Relief Act is a common-sense step forward that will help families in Oregon and communities across America.”
“Trump’s reversal of the CFPB rule exempting medical debts from credit reports demonstrates a lack of understanding and care for America’s working families,” said Williams. “Medical debt is one of the leading causes of financial strain, and our current system continues that hardship even after the bill is paid, allowing settled medical debts to harm their credit reports. Often, these debts are beyond their control — and it’s far past time to right this wrong.”
The Medical Debt Relief Act is co-sponsored by U.S. Senators Richard Blumenthal (D-CT), John Fetterman (D-PA), Peter Welch (D-VT), Reverend Raphael Warnock (D-GA), and Kirsten Gillibrand (D-NY), and U.S. Representatives Raja Krishnamoorthi (IL-08), Delia C. Ramirez (IL-03), Mary Gay Scanlon (PA-05), Tim Kennedy (NY-26), Jesus "Chuy" Garcia (IL-04), Bennie Thompson (MS-02), and Hank Johnson (GA-04).
The bill is supported by the National Consumer Law Center, Consumer Action, California Low-Income Consumer Coalition, Justice in Aging, Center for Responsible Lending, and Consumer Federation of America.
Full text of the Medical Debt Relief Act can be found by clicking HERE.
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