CFPB Proposes Medical Debt Ban to Aid Consumers

CFPB Medical Debt Ban
The Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C., U.S., on Saturday, April 16, 2022. The Credit-reporting company TransUnion is an "out-of-control" repeat offender engaging in “deceptive” marketing practices the CFPB alleged this week after filing a lawsuit. Photographer: Samuel Corum/Bloomberg

The Consumer Financial Protection Bureau (CFPB) on Tuesday unveiled a proposed rule aimed at restricting how lenders and credit reporting companies can utilize consumers’ medical debt information. This measure, according to the agency, could eliminate up to $49 billion in outstanding medical bills from millions of credit reports.

CFPB Medical Debt Ban Proposal

The proposed rule from the CFPB seeks to ban the inclusion of medical debt on most consumer credit reports and close a “regulatory loophole” that permits creditors to factor in medical debt when making lending decisions about consumers. This Medical Debt Ban aims to alleviate the negative impact of unpaid medical bills on consumers’ credit scores and their ability to secure loans, including mortgages.

Addressing Unpaid Medical Bills

CFPB Director Rohit Chopra emphasized that the proposal addresses concerns over unpaid medical bills “overly penalizing” consumers. He noted that such debts should not become an undue obstacle to obtaining credit. Chopra highlighted that the proposal would also curb the practice of medical “debt parking,” where debt collectors buy unpaid accounts at low prices and then place them on consumers’ credit reports to pressure payment.

Preventing Debt Parking

“This rule would stop debt collectors from using the credit report as a cudgel to coerce consumers into paying bills they may not even owe and ensure that the credit reporting and scoring system doesn’t unjustly punish people for getting sick,” Chopra said during a press call announcing the proposal.

Protecting American Families

“American families should not have their financial lives upended because of an unexpected medical emergency or a serious illness,” Chopra added. “Nor should an expensive surgery or procedure put them at risk of coercion and harassment.”

Impact of the CFPB Medical Debt Ban

If implemented, the CFPB Ban would represent a significant shift in how medical debt is treated within the credit reporting and lending industries. By removing such debts from credit reports, the CFPB aims to provide relief to millions of consumers facing financial difficulties due to medical expenses. This move is expected to foster a fairer credit reporting system that does not disproportionately penalize those with health issues.


The CFPB’s proposal marks a critical step toward protecting consumers from the adverse effects of medical debt on their financial well-being. By implementing the CFPB Medical Debt Ban, the agency seeks to ensure that medical emergencies do not lead to long-term financial hardship for American families.