HR 4827119th CongressIn Committee

Medical Debt Relief Act of 2025

Introduced: Jul 29, 2025

Sponsor: Rep. Williams, Nikema [D-GA-5] (D-Georgia)

Healthcare

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Medical Debt Relief Act of 2025 would overhaul how medical debt is treated under federal credit reporting. It adds a formal definition of “medical debt” to the Fair Credit Reporting Act (FCRA) and prohibits the inclusion of medical debt on consumer credit reports. It also removes any adverse information related to medical debt from credit reports (such as collections or charge-offs) and takes steps to ensure that information about a consumer’s medical debt cannot be used by creditors when deciding whether to extend credit. In addition, the bill requires the Consumer Financial Protection Bureau (CFPB) to amend regulations within one year to bar creditors from obtaining or using medical debt information in credit decisions. The overall effect is to shield individuals with medical debt from negative credit reporting and from using that debt in lending decisions.

Key Points

1Definition added: The bill defines “medical debt” as debt arising from the receipt of medical services, products, or devices.
2Exclusion from credit reporting: Medical debt would be prohibited from being included on a consumer report, and adverse information related to medical debt (including collections or other actions) would be removed from reporting.
3Technical amendments: The bill makes conforming changes to existing FCRA provisions to eliminate references to medical debt in reporting. This includes adjustments to where and how medical debt information could appear or be treated.
4Regulatory action: Within one year after enactment, the CFPB must amend regulations to ensure creditors are prohibited from obtaining or using medical debt information in deciding whether to extend credit.
5Scope and intent: The act targets medical debt specifically and does not remove other types of debt from credit reporting or credit decisions. It positions itself as a consumer protection and debt-relief measure by reducing the impact of medical debt on credit access.

Impact Areas

Primary group/area affected- Consumers with medical debt: Likely to experience less negative impact on credit scores and credit access due to medical debt, since such debt would not be reported or used in lending decisions.- Credit reporting agencies: Required to stop reporting medical debt and to adjust how medical debt information is handled in consumer files.Secondary group/area affected- Lenders and creditors: Will be barred from using medical debt information in credit decisions, potentially altering underwriting practices and risk assessment.- Medical debt collectors and service providers: Their practices related to medical debt reporting and collection actions would be affected since medical debt would not appear on credit reports.Additional impacts- Regulatory and compliance costs: CFPB regulation updates and industry adaptation may involve compliance work for lenders and reporting agencies.- Access to credit: If medical debt cannot be used in credit decisions, some applicants with medical debt may experience improved access to credit, while lenders might adjust risk models for non-medical factors.- Consumer protections: The bill strengthens protection for individuals facing medical expenses by reducing the influence of medical debt on financial opportunities.

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