Judge Halts CFPB Effort to Clear $49 Billion in Medical Debt from Credit Scores

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On July 15, 2025, a federal judge struck down a Consumer Financial Protection Bureau (CFPB) rule that aimed to remove unpaid medical debt from the credit reports of approximately 15 million Americans. The decision, made by Judge Sean Jordan in the U.S. District Court for the Eastern District of Texas, declared that the CFPB overstepped its authority under the Fair Credit Reporting Act.

The overturned rule, introduced in January, sought to eliminate medical debt from credit reports due to its limited relevance in predicting a consumer’s ability to repay other loans, such as mortgages or auto loans. The CFPB highlighted that medical debt, totaling about $49 billion for affected consumers, often stems from inaccuracies, disputes, or issues like insurance denials and reimbursement complications.

The lawsuit challenging the rule was filed by the Cornerstone Credit Union League and the Consumer Data Industry Association, representing the credit reporting industry. The court’s ruling could now affect the financial prospects of millions, as medical debt on credit reports can influence lenders’ decisions on loan approvals.

Consumer advocates had praised the CFPB’s rule for safeguarding consumers entangled in medical debt complexities. Julie Margetta Morgan, former associate director at the CFPB, emphasized to CBS News that medical debt is a poor indicator of creditworthiness due to frequent inaccuracies and disputes.

Judge Halts CFPB Effort to Clear $49 Billion in Medical Debt from Credit Scores – Judge Halts CFPB Effort to Clear $49 Billion in Medical Debt from Credit Scores – Judge Halts CFPB Effort to Clear $49 Billion in Medical Debt from Credit Scores

Judge Halts CFPB Effort to Clear $49 Billion in Medical Debt from Credit Scores – Credit Union Collections – Credit Union Collectors – Lending – Consumer Financial Protection Bureau – CFPB