Judge blocks medical debt removal rule

A federal judge in Texas overturned a Consumer Financial Protection Bureau (CFPB) rule that would have removed unpaid medical debt from the credit reports of about 15 million Americans, citing that the agency exceeded its authority under the Fair Credit Reporting Act. The rule, which was issued in January under the Biden Administration and had not yet taken effect, was challenged by credit industry groups. Consumer advocates had supported the rule, arguing that medical debt often results from billing errors and insurance issues and is not a reliable indicator of creditworthiness. While the CFPB could theoretically appeal, the agency’s actions are currently frozen under new Trump-era leadership, leaving its future uncertain.