3276 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

1Fair and Accurate Credit Transactions Act of 

2003 (FACT Act), Public Law 108–159, 117 Stat. 

1952, 1999 (2003). 

2 149 Cong. Rec. H8122–02, H8122 (daily ed. 

Sept. 10, 2003) (statement of Rep. Kanjorsky). 

3 15 U.S.C. 1681 et seq., 1681(a)(4). 

4 15 U.S.C. 1681b(g)(2). 

5 15 U.S.C. 1681b(g)(5). 

6 70 FR 70664 (Nov. 22, 2005). 

7See, e.g., Kenneth P. Brevoort & Michelle 

Kambara, Consumer Fin. Prot. Bureau, Data point: 

Medical debt and credit scores (May 2014), https:// 

files.consumerfinance.gov/f/201405_cfpb_report_

data-point_medical-debt-credit-scores.pdf. See also 

Mark Rukavina, Medical Debt and Its Relevance 

When Assessing Creditworthiness, 46 Suffolk U. L. 

Rev. 967 (2013), https://bpb-us-e1.wpmucdn.com/

sites.suffolk.edu/dist/3/1172/files/2014/01/ 

Rukavina_Lead.pdf. 

8See, e.g., Bus. Wire, Equifax, Experian, and 

TransUnion Support U.S. Consumers With Changes 

to Medical Collection Debt Reporting (Mar. 18, 

2022), https://www.businesswire.com/news/home/ 

20220318005244/en/Equifax-Experian-andTransUnion-Support-U.S.-Consumers-WithChanges-to-Medical-Collection-Debt-Reporting. 

9See AnnaMaria Andriotis, Major Credit-Score 

Provider to Exclude Medical Debts, Wall St. J. (Aug. 

10, 2022), https://www.wsj.com/articles/majorcredit-score-provider-to-exclude-medical-debts11660102729 (VantageScore CEO quoted as saying 

that having medical debt is not necessarily 

reflective of a consumer’s ability to pay back a 

loan); Ethan Dornhelm, The Impact of Medical Debt 

on FICO Scores, FICO Blog (July 13, 2015), https:// 

www.fico.com/blogs/impact-medical-debt-ficorscores. 

10See, e.g., Fed. Nat’l Mortg. Ass’n, Single Family 

Selling Guide, B3–2–03 (2021), https://selling-guide.

fanniemae.com/#Public.20Records

.2C.20Foreclosures.2C.20and.20Collection.

20Accounts (noting that ‘‘[c]ollection accounts 

reported as medical collections are not used in the 

DU [Desk Underwriter] risk assessment’’); Fed. 

Home Loan Mortg. Corp., The Single-Family Seller/ 

Servicer Guide, 5201.1 (2022), https://

guide.freddiemac.com/app/guide/section/5201.1; 

U.S. Dep’t of Hous. & Urban Dev., Single Family 

Housing Policy Handbook, 4000.1 (2021), https://

www.hud.gov/sites/dfiles/OCHCO/documents/

4000.1hsgh-112021.pdf. See also The White House, 

Fact Sheet: The Biden Administration Announces 

New Actions to Lessen the Burden of Medical Debt 

and Increase Consumer Protection (Apr. 11, 2022), 

https://www.whitehouse.gov/briefing-room/

statements-releases/2022/04/11/fact-sheet-thebiden-administration-announces-new-actions-tolessen-the-burden-of-medical-debt-and-increaseconsumer-protection/ (announcing changes to 

certain Federal government underwriting standards 

to remove medical debt from evaluations of whether 

a consumer will repay a loan, including those for 

the U.S. Department of Agriculture’s rural housing 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1022 

[Docket No. CFPB–2024–0023] 

RIN 3170–AA54 

Prohibition on Creditors and 

Consumer Reporting Agencies 

Concerning Medical Information 

(Regulation V) 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Final rule. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is issuing a 

final rule amending Regulation V, 

which implements the Fair Credit 

Reporting Act (FCRA), concerning 

medical information. The FCRA 

prohibits creditors from considering 

medical information in credit eligibility 

determinations. The CFPB is removing a 

regulatory exception that had permitted 

creditors to obtain and use information 

on medical debts notwithstanding this 

statutory limitation. The final rule also 

provides that a consumer reporting 

agency generally may not furnish to a 

creditor a consumer report containing 

information on medical debt that the 

creditor is prohibited from using. 

DATES: This final rule is effective March 

17, 2024. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or https://reginquiries.

consumerfinance.gov/. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Overview 

A. Summary of the Final Rule 

Information about a person’s medical 

history and health is sacrosanct and 

among the most intimate and sensitive 

categories of data. Recognizing the 

uniquely sensitive nature of such 

information, Congress acted to limit the 

use and sharing of medical information 

in the financial system by amending the 

Fair Credit Reporting Act (FCRA) 

through the Fair and Accurate Credit 

Transactions Act of 2003 (FACT Act).1

In doing so, Congress ‘‘establish[ed] 

strong privacy protections for 

consumers’ sensitive medical 

information,’’ 2 in line with the 

overarching privacy protection purpose 

of the FCRA.3 As part of these 

protections, Congress generally limited 

a creditor’s ability to obtain or use a 

consumer’s medical information in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit (creditor 

prohibition), subject to certain 

exceptions.4 One of these exceptions 

required the Federal financial banking 

agencies and the National Credit Union 

Administration (Agencies) to prescribe 

regulations that permit transactions that 

are determined to be necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs (including 

administrative verification purposes), 

consistent with congressional intent to 

restrict the use of medical information 

for inappropriate purposes.5

In 2005, the Agencies issued a 

regulatory exception (financial 

information exception) to this statutory 

prohibition, permitting consumers’ 

medical financial information to be 

obtained and used by creditors in 

connection with credit eligibility 

determinations if certain conditions 

were met.6 Since the financial 

information exception was created, a 

number of concerns have been raised 

about whether a regulatory exception 

that permits creditors to consider 

sensitive medical information about a 

consumer’s debts and certain other 

types of medical information is 

necessary and appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs, and 

consistent with the congressional intent 

to restrict the use of medical 

information for inappropriate purposes. 

First, when the Agencies issued the 

financial information exception to the 

statutory prohibition, they did so 

without providing evidence or 

reasoning to support their main 

conclusion that an exception from a 

congressionally created legal 

requirement was warranted. 

Second, research has shown that 

medical debt has limited predictive 

value in predicting future default for 

credit underwriting purposes. Questions 

about the reliability of information 

about medical debt, as compared to 

information about other types of 

consumer debt, have been raised based 

on research performed by the CFPB and 

others.7 Medical debt may be less 

predictive of whether a consumer will 

pay a future loan, because medical debts 

can occur and are collected through 

unique circumstances and practices. For 

example, consumers often have limited 

ability to control the timing and types 

of medical services that are required. 

Third, market participants, including 

in the consumer reporting industry and 

those most financially incentivized to 

assess the predictive value of medical 

debt, have reduced their reliance on 

medical debt in recognition of its 

limited utility. Consumer reporting 

agencies have removed certain medical 

debts from consumer reports.8 Major 

credit scoring companies have accorded 

less weight to, or excluded entirely, 

medical debt information in their newer 

scoring models.9 Similarly, some 

creditors have adjusted how their 

underwriting standards treat medical 

debt information.10


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service loans and the Small Business 

Administration’s loan programs and the Federal 

Housing Finance Authority’s review of credit 

models). 

11Public Law 111–203, 124 Stat. 1955, 2004 

(2010). 

12 12 CFR 1022.30(b)(2)(ii); see also 15 U.S.C. 

1681a(r)(5). ECOA is codified at 15 U.S.C. 1691 et 

seq.; ECOA section 702 is codified at 15 U.S.C. 

1691a(e). The term creditor means any person who 

regularly extends, renews, or continues credit; any 

person who regularly arranges for the extension, 

renewal, or continuation of credit; or any assignee 

of an original creditor who participates in the 

decision to extend, renew, or continue credit. 

13 15 U.S.C. 1681a(f). The term consumer 

reporting agency means any person which, for 

monetary fees, dues, or on a cooperative nonprofit 

basis, regularly engages in whole or in part in the 

practice of assembling or evaluating consumer 

credit information or other information on 

consumers for the purpose of furnishing consumer 

reports to third parties, and which uses any means 

or facility of interstate commerce for the purpose of 

preparing or furnishing consumer reports. 

Key Changes 

Given the developments over the past 

decade in its understanding of how 

consumer medical debt differs from 

other types of consumer debt and its 

uses in credit underwriting, the CFPB, 

now with primary regulatory authority 

over the FCRA, is updating the nonstatutory exceptions in Regulation V to 

ensure the use of medical information is 

consistent with the congressional intent 

to safeguard consumers’ privacy and 

restrict the use of medical information 

for inappropriate purposes. To do so, 

the CFPB is finalizing changes to how 

creditors and consumer reporting 

agencies treat medical information 

concerning a consumer’s medical debt 

in §§ 1022.3, 1022.30, and 1022.38, as 

outlined below and discussed in further 

detail in part IV, Discussion of the Final 

Rule. 

These amendments apply to any 

person that participates as a creditor in 

a transaction, except for a person 

excluded from coverage by section 1029 

of the Consumer Financial Protection 

Act of 2010 (CFPA) 11 (i.e., certain auto 

dealers). According to existing 

Regulation V, the term ‘‘creditor’’ has 

the same meaning as in section 702 of 

the Equal Credit Opportunity Act 

(ECOA).12 The amendments also apply 

to a consumer reporting agency as 

defined in section 603(f) of the FCRA.13

Removal of the Financial Information 

Exception 

Under this final rule, a creditor will 

no longer be able to consider medical 

information related to a consumer’s 

medical debt in connection with any 

determination of the consumer’s 

eligibility, or continued eligibility, for 

credit, unless one of the specific 

exceptions in final § 1022.30(e) applies. 

Specifically, the CFPB is finalizing its 

interpretation as set forth in the 

proposed rule that for information about 

a consumer’s debt to be ‘‘medical 

information’’ under FCRA section 

603(i), the information must relate to a 

debt the consumer owes, or at one time 

owed, directly to a health care provider 

or to the health care provider’s agent or 

assignee for the provision of the health 

care underlying the payment obligation. 

As discussed in further detail in part 

IV.B.1, Medical Information Related to 

Debts, the CFPB finalizes its definition 

of medical debt information in final 

§ 1022.3(j), as medical information that 

pertains to a debt owed by a consumer 

to a person whose primary business is 

providing medical services, products, or 

devices (also referred to herein as a 

health care provider), or to the person’s 

agent or assignee, for the provision of 

such medical services, products, or 

devices. The definition also provides 

that medical debt information includes, 

but is not limited to, medical bills that 

are not past due or that have been paid. 

The CFPB is removing the financial 

information exception to the creditor 

prohibition in current § 1022.30(d). This 

non-statutory exception provides that a 

creditor may generally obtain and use 

medical information pertaining to a 

consumer in connection with any 

determination of the consumer’s 

eligibility, or continued eligibility, for 

credit subject to certain exceptions. 

With respect to information concerning 

a consumer’s medical debts, the CFPB 

has concluded that it generally is 

neither ‘‘necessary and appropriate to 

protect legitimate operational, 

transactional, risk, consumer, and other 

needs,’’ nor consistent with Congress’s 

intent ‘‘to restrict the use of medical 

information for inappropriate 

purposes,’’ for creditors to consider 

such sensitive financial information in 

underwriting. Because of the CFPB’s 

elimination of the financial information 

exception, the FCRA will return to its 

original restrictions on creditors 

considering, in connection with credit 

eligibility determinations, certain 

medical information related to 

consumers’ medical debts. 

The final rule is also removing the 

financial information exception for 

expenses, assets, and collateral and 

related examples at current § 1022.30(d). 

As discussed in more detail in part 

IV.B.2, Medical Information Related to 

Expenses, Assets, and Collateral, the 

CFPB has determined that the financial 

information exception for a creditor to 

consider medical information relating to 

a consumer’s expenses, assets, and 

collateral is also not warranted to 

protect legitimate operational, 

transactional, risk, or consumer needs 

and is not consistent with the intent of 

the creditor prohibition to restrict the 

use of medical information for 

inappropriate purposes as required 

under FCRA section 604(g)(5). 

As discussed in more detail in part 

IV.B.3, Medical Information Related to 

Income, Benefits, or the Purpose of the 

Loan, the CFPB is retaining certain 

elements of the financial information 

exception related to income, benefits, 

and the purpose of the loan in current 

§ 1022.30(d) by moving relevant 

provisions to the list of specific 

exceptions to the creditor prohibition at 

§ 1022.30(e)(1)(x), with technical edits 

for renumbering, and is finalizing 

proposed § 1022.30(e)(7) (Example 7) 

which is an example that illustrates a 

use of medical information related to 

long-term disability income. 

This final rule is also modifying the 

text of proposed § 1022.30(e)(1)(x)(A) to 

add a new provision at final 

§ 1022.30(e)(1)(x)(A)(1), as to medical 

information included in the transaction 

information of an account for a 

consumer financial product or service 

described in 12 CFR 1033.111(b)(1) 

through (3), and accessed with the 

consumer’s authorization. As discussed 

in more detail in part VI.A, ConsumerAuthorized Transaction History, the 

CFPB has determined that including 

medical information included in the 

transaction history of a consumer’s 

account in this exception is necessary 

and appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs, including 

permitting actions necessary for 

administrative verification purposes, 

consistent with FCRA’s intent to restrict 

the use of medical information for 

inappropriate purposes. 

Limits on a Consumer Reporting 

Agency’s Disclosure of Medical Debt 

Information 

Under the final rule, new § 1022.38 to 

subpart D addresses how a consumer 

reporting agency’s medical debt 

information reporting responsibilities 

are impacted when creditors are 

prohibited from obtaining or using 

medical debt information. As discussed 

in more detail in part IV.C, Limits on a 

Consumer Reporting Agency’s 

Disclosure of Medical Debt Information, 

final § 1022.38 provides that a consumer 

reporting agency is permitted to include 

medical debt information in a consumer 

report furnished to a creditor for credit 

eligibility purposes only if the following 

criteria are met: (1) the consumer 

reporting agency has reason to believe 

the creditor intends to use the medical 

debt information in a manner not 

prohibited by § 1022.30; and (2) the 


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3278 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

14For more information about medical debt in the 

United States, including population disparities, 

impacts on consumers, and COVID–19 impacts, see 

Consumer Fin. Prot. Bureau, Medical Debt Burden 

in the United States (Feb. 2022), https://

files.consumerfinance.gov/f/documents/cfpb_

medical-debt-burden-in-the-united-states_report_

2022-03.pdf. 

15Lunna Lopes et al., Kaiser Fam. Found., Health 

Care Debt In The U.S.: The Broad Consequences Of 

Medical And Dental Bills (June 16, 2022), https:// 

www.kff.org/report-section/kff-health-care-debtsurvey-main-findings/ (reporting results of 2022 

Kaiser Family Foundation Health Care Debt Survey, 

which polled 2,375 adults). 

16See generally Consumer Fin. Prot. Bureau, 

Bulletin 2022–01: Medical Debt Collection and 

Consumer Reporting Requirements in Connection 

with the No Surprises Act, 87 FR 3025 (Jan. 20, 

2022), https://www.govinfo.gov/content/pkg/FR2022-01-20/pdf/2022-01012.pdf; Consumer Fin. 

Prot. Bureau, Consumer credit reports: A study of 

medical and non-medical collections, at 15–16, 38– 

42 (Dec. 2014), https://files.consumerfinance.gov/f/ 

201412_cfpb_reports_consumer-credit-medical-andnon-medical-collections.pdf. 

17See Consumer Fin. Prot. Bureau, Complaint 

Bulletin: Medical billing and collection issues 

described in consumer complaints, at 7 (Apr. 2022), 

https://files.consumerfinance.gov/f/documents/ 

cfpb_complaint-bulletin-medical-billing_report_

2022-04.pdf (describing consumer complaints 

received by the CFPB about unexpected medical 

care). 

18See Lunna Lopes et al., Kaiser Fam. Found., 

Health Care Debt in the U.S.: The Broad 

Consequences of Medical and Dental Bills (June 16, 

2022), https://www.kff.org/report-section/kff-healthcare-debt-survey-main-findings/ (reporting survey 

results that 7 in 10 adults with health care debt say 

the debt arose from bills for a one-time or shortterm medical expense). But see Sara R. Collins et 

al., Commonwealth Fund, Paying for It: How Health 

Care Costs and Medical Debt Are Making 

Americans Sicker and Poorer—Findings from the 

Commonwealth Fund 2023 Health Care 

Affordability Survey (Oct. 2023), https://

www.commonwealthfund.org/publications/surveys/ 

2023/oct/paying-for-it-costs-debt-americans-sickerpoorer-2023-affordability-survey (about half of 

adults with medical debt say it is from treatment 

received for an ongoing condition). 

19Consumer Fin. Prot. Bureau, Bulletin 2022–01: 

Medical Debt Collection and Consumer Reporting 

Requirements in Connection with the No Surprises 

Act, 87 FR 3025 (Jan. 20, 2022), https://

www.govinfo.gov/content/pkg/FR-2022-01-20/pdf/ 

2022-01012.pdf. See also Consumer Fin. Prot. 

Bureau, Complaint Bulletin: Medical billing and 

collection issues described in consumer complaints, 

at 7–8 (Apr. 20, 2022), https://www.consumer

finance.gov/data-research/research-reports/ 

complaint-bulletin-medical-billing-and-collectionissues-described-in-consumer-complaints/ 

(detailing consumer complaints received by the 

CFPB). 

20See, e.g., U.S. Gov’t Acct. Off., Health Care 

Capsule: Accessing Health Care in Rural America 

(May 2023), https://www.gao.gov/assets/gao-23- 

106651.pdf (generally describing health care access 

challenges for rural populations). 

21See, e.g., Karen Pollitz & Kaye Pestaina, Kaiser 

Fam. Found., Could Consumer Assistance Be 

Helpful to People Facing Medical Debt? (July 14, 

2022), https://www.kff.org/policy-watch/couldconsumer-assistance-be-helpful-to-people-facingmedical-debt/ (analyzing results of 2022 Kaiser 

Family Foundation Health Care Debt Survey). 

consumer reporting agency has reason 

to believe the creditor is not otherwise 

legally prohibited from obtaining or 

using the medical debt information, 

including by a State law that prohibits 

a creditor from obtaining or using 

medical debt information. The CFPB has 

determined that a creditor who is 

prohibited from obtaining or using 

medical debt information does not have 

a permissible purpose for a consumer 

report containing medical debt 

information. The CFPB has also 

determined that limiting the 

circumstances under which consumer 

reporting agencies may furnish medical 

debt information is necessary or 

appropriate to administer and carry out 

the purposes and objectives of the FCRA 

to protect consumers’ privacy, and to 

prevent evasions or to facilitate 

compliance. 

Example To Comply With Applicable 

Requirements of Local, State, or Federal 

Laws 

The CFPB is finalizing a specific 

example for obtaining and using 

medical information as proposed in new 

§ 1022.30(e)(6) (Example 6) concerning 

the ability-to-repay or pay requirements 

in Regulation Z with respect to 

mortgages and credit card accounts, 

with one clarification as discussed 

below. The CFPB has determined that 

Example 6 does not conflict with the 

ability-to-repay or pay requirements in 

Regulation Z and provides sufficient 

information for how creditors may 

comply with both the ability-to-repay or 

pay requirements in Regulation Z and 

the changes in this final rule with 

respect to use of medical information. 

The CFPB has determined it would not 

be necessary or appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs, 

including permitting actions necessary 

for administrative verification purposes, 

nor consistent with Congress’s intent to 

restrict the use of medical information 

for inappropriate purposes, for a 

creditor or card issuer under 

§ 1022.30(e)(1)(ii) to use medical 

information contained in a consumer 

report in order to comply with the 

applicable laws because a creditor or 

card issuer can comply with the 

applicable laws using the information 

provided by the consumer, including 

any medical information received from 

the consumer on the application in 

response to a general inquiry about 

debts or obligations. 

The final rule revises Example 6 from 

the proposal, however, to make clear 

that this example only relates to the 

exception under § 1022.30(e)(1)(ii), and 

a creditor or card issuer may obtain and 

use medical information for purposes of 

Regulation Z’s ability-to-repay or pay 

determinations pursuant to other 

exceptions in § 1022.30(e), as 

applicable. With respect to the abilityto-repay requirements in Regulation Z 

§ 1026.43(c), final Example 6 also 

contains additional information on the 

interplay between the ability-to-repay 

requirement in Regulation Z 

§ 1026.43(c) and final § 1022.30(e)(1)(ii). 

Effective Date 

The final rule will take effect sixty 

days after the date the rule is published 

in the Federal Register. 

B. Market Background 

Unique Characteristics of Medical Debt 

in the United States 

A significant number of Americans 

have medical debt.14 According to one 

nationally representative survey, in 

2022 around 41 percent of adults stated 

that they had some kind of medical 

debt, including debt that they were 

unable to pay, that was on credit cards, 

that was being paid over time, directly 

to a provider, or that they owed to 

family members, or to a bank, collection 

agency, or other lender.15

Several characteristics of medical debt 

pose special risks to consumers and 

distinguish it from other types of debt.16

The need for medical care can be 

unexpected,17 and medical debt often 

results from bills for a one-time or shortterm medical expense due to an 

unforeseen event such as an accident or 

sudden illness.18 Consumers are rarely 

informed of the costs of medical 

treatment in advance, and because of 

price opacity and an often immediate 

need for medical care, consumers have 

little or no ability to ‘‘shop around.’’ 19

Americans that live in rural 

communities may also experience 

limited choices when trying to access 

health care,20 which may impact the 

amount of their medical debt in ways 

that are not reflective of their other 

debts. 

There are significant concerns with 

the accuracy of medical bills. For 

example, 43 percent of all adults and 53 

percent of adults with medical debt in 

a nationally representative survey 

believed they had received a medical or 

dental bill that included an error.21

While the survey found that most of 

these adults had taken some action to 

dispute the mistake, 51 percent reported 

that they either did not dispute the bill 

or were unable to successfully resolve 

their dispute. This may be because 

medical billing and collections can be 

complicated and confusing since a 

consumer may have difficulty 

determining whether the amount is 

covered by insurance or a hospital’s 

financial assistance program (if 


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22See, e.g., Consumer Fin. Prot. Bureau, Medical 

Debt Burden in the United States, at 9–14 (Feb. 

2022), https://files.consumerfinance.gov/f/ 

documents/cfpb_medical-debt-burden-in-theunited-states_report_2022-03.pdf (describing issues 

with medical billing and collections practices); 

Consumer Fin. Prot. Bureau, Complaint Bulletin: 

Medical billing and collection issues described in 

consumer complaints (Apr. 2022), https://

files.consumerfinance.gov/f/documents/cfpb_

complaint-bulletin-medical-billing_report_2022- 

04.pdf. 

23Press Release, U.S. Dep’t of Just., Hospital 

Chain Will Pay Over $260 Million to Resolve False 

Billing and Kickback Allegations; One Subsidiary 

Agrees to Plead Guilty (Sept. 25, 2018), https://

www.justice.gov/opa/pr/hospital-chain-will-payover-260-million-resolve-false-billing-and-kickbackallegations-one; Press Release, U.S. Atty’s Off. for 

C.D. Cal., Prime Healthcare Services and its CEO 

Agree to Pay $65 Million to Settle Medicare 

Overbilling Allegations at 14 California Hospitals 

(Aug. 3, 2018), https://www.justice.gov/usao-cdca/ 

pr/prime-healthcare-services-and-its-ceo-agree-pay65-million-settle-medicare-overbilling; Press 

Release, Off. of Pub. Affairs, U.S. Dep’t of Just., 

Clinical Laboratory and Its Owner Agree to Pay an 

Additional $5.7 Million to Resolve Outstanding 

Judgement for Billing Medicare for Inflated MileageBased Lab Technician Travel Allowance Fees (Aug. 

1, 2023), https://www.justice.gov/opa/pr/clinicallaboratory-and-its-owner-agree-pay-additional-57- 

million-resolve-outstanding; Press Release, Off. of 

Pub. Affairs, U.S. Dep’t of Just., Physician Partners 

of America to Pay $24.5 Million to Settle 

Allegations of Unnecessary Testing, Improper 

Remuneration to Physicians and a False Statement 

in Connection with COVID–19 Relief Funds (Apr. 

12, 2022), https://www.justice.gov/opa/pr/ 

physician-partners-america-pay-245-million-settleallegations-unnecessary-testing-improper; Erica 

Zucco, Providence will refund medical bills for 

thousands of patients after agreement with attorney 

general, King 5 News (Feb. 1, 2024), https://

www.king5.com/article/news/health/providenceforgive-137-million-medical-payments-refund-20mpatients-after-agreement/281-3063dd66-ab54-413a893a-73463f213a5b; Off. of the Att’y Gen. of Va., 

Common Health Care Fraud Schemes, https://

www.oag.state.va.us/contact-us/frequently-askedquestions?id=511 (last visited Dec. 2, 2024). 

24See 15 U.S.C. 1681(a)(3). 

25See Consumer Fin. Prot. Bureau, Medical Debt 

Burden in the United States, at 26 n.117 (Feb. 

2022), https://files.consumerfinance.gov/f/ 

documents/cfpb_medical-debt-burden-in-theunited-states_report_2022-03.pdf. 

26See Consumer Fin. Prot. Bureau, Data Point: 

Consumer Credit and the Removal of Medical 

Collections from Credit Reports, at 2 (Apr. 2023), 

https://files.consumerfinance.gov/f/documents/ 

cfpb_consumer-credit-removal-medical-collectionsfrom-credit-reports_2023-04.pdf. 

27Payments made to medical balances not yet 

sent to collections generally are not furnished to 

consumer reporting agencies. 

28Consumer Fin. Prot. Bureau, Market Snapshot: 

An Update on Third Party Debt Collections 

Tradelines Reporting, at 5 (Feb. 2023), https://

files.consumerfinance.gov/f/documents/cfpb_

market-snapshot-third-party-debt-collectionstradelines-reporting_2023-02.pdf. 

29 Id. 

30 15 U.S.C. 1681c(a)(4). 

31Consumer Fin. Prot. Bureau, Consumer credit 

reports: A study of medical and non-medical 

collections, at 27 (Dec. 2014), https://

files.consumerfinance.gov/f/201412_cfpb_reports_

consumer-credit-medical-and-non-medicalcollections.pdf. 

32Consumer Fin. Prot. Bureau, Market Snapshot: 

An Update on Third Party Debt Collections 

Tradelines Reporting, at 16–17 (Feb. 2023), https:// 

files.consumerfinance.gov/f/documents/cfpb_

market-snapshot-third-party-debt-collectionstradelines-reporting_2023-02.pdf. 33See 15 U.S.C. 1681s–2(a)(9). 34 15 U.S.C. 1681c(a)(6); see 15 U.S.C. 1681s– 

2(a)(9) (requiring medical information furnishers to 

notify consumer reporting agencies of such status). 35Consumer Fin. Prot. Bureau, Paid and LowBalance Medical Collections on Consumer Credit 

Reports (July 27, 2022), https://

www.consumerfinance.gov/data-research/researchreports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/. 36Consumer Fin. Prot. Bureau, Complaint 

Bulletin: Medical billing and collection issues 

described in consumer complaints (Apr. 2022), 

https://files.consumerfinance.gov/f/documents/ 

cfpb_complaint-bulletin-medical-billing_report_

2022-04.pdf. 

applicable) and, if so, whether and to 

what extent the amount was already 

paid or reduced.22 Also some health 

care providers and debt collectors 

exploit these complications and charge 

inflated or unearned bills.23

Medical Debt and Consumer Reporting 

Information about medical debt is 

used in different ways in the financial 

system. Consumer reporting agencies 

play a key role in assembling and 

evaluating consumer credit and other 

information on consumers 24—including 

information about a consumer’s medical 

debt—and in providing consumer 

reports to other companies for 

employment, housing, insurance, and 

other decisions.25 Medical debt 

information on a consumer report can 

increase the cost and reduce the 

availability of credit, and can even 

reduce access to employment and 

housing.26

Generally, information about a 

medical debt on a consumer report 

appears as a collection tradeline. After 

a medical debt has been placed by the 

creditor in collections status because the 

debt has been unpaid for a period of 

time, the medical debt may be furnished 

as a collections tradeline to consumer 

reporting agencies by a debt collector, 

including a debt collector who collects 

on behalf of the original creditor for a 

fee, as well as a debt collector who 

purchases overdue accounts outright 

from the original creditor (also known 

as a debt buyer).27 Such tradelines are 

referred to as medical collections or 

medical collections tradelines. Research 

by the CFPB has found that nearly all 

medical collections furnishing is 

performed by debt collectors, rather 

than by health care providers (as 

original creditors) themselves.28

However, a debt collector may have 

limited access to an original creditor’s 

system of records, which may contribute 

to higher dispute rates for collections 

tradelines compared to other 

components of consumer reports.29

When debt collectors furnish to 

consumer reporting agencies, they 

generally report to one or more of the 

three largest nationwide consumer 

reporting agencies (NCRAs). Debt 

collections tradelines may persist on 

consumer reports for up to seven 

years; 30 however, many collections 

tradelines are removed well in advance 

of seven years.31

Historically, medical debts have been 

the most common type of debt on 

consumer reports at both the consumerreport and individual collections 

tradeline level. The CFPB estimated that 

medical collections accounted for 57 

percent of all collections tradelines in 

Q1 2022 and 58 percent in Q2 2018.32

When debt collectors acting as agents or 

assignees of health care providers 

furnish information about medical 

collections, they must notify the 

consumer reporting agency that they are 

furnishing medical information.33 The 

FCRA generally prohibits consumer 

reporting agencies from reporting to 

third parties the name, address, and 

telephone number of the health care 

provider for any account identified as 

from a medical information furnisher 

that has notified the consumer reporting 

agency of its status, unless that 

information is restricted or coded such 

that persons other than the consumer 

cannot identify or infer the specific 

provider or the nature of the medical 

services provided.34 Nevertheless, 

despite the coding of information on the 

consumer reports, a consumer report 

user could infer from the coding that 

certain debts relate to the provision of 

health care. Like with medical bills, 

consumers often find errors with 

medical collections tradeline 

information on their consumer reports. 

A CFPB analysis found that almost 6 

percent of medical collections in its data 

were flagged as having been disputed at 

some point, almost three times higher 

than the rate of dispute flags on credit 

cards and seven times the rate of 

dispute flags on student loans.35

A 2022 review of consumer 

complaints submitted to the CFPB 

found that many consumers 

complaining of disputed debt collection 

attempts reported first learning of the 

debt from viewing their consumer 

report. Consumers expressed concern 

with inaccurate information leading to a 

decrease in their credit score. Some 

consumers reported paying debt they 

did not believe they owed in order to 

have the tradeline removed from their 

consumer report.36 A 2024 review of 

consumer complaints found that 

consumers complain that debt collectors 


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3280 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

37Consumer Fin. Prot. Bureau, Fair Debt 

Collection Practices Act: CFPB Annual Report 2024 

(Sept. 2024), https://files.consumerfinance.gov/f/ 

documents/cfpb_fdcpa-2024-annual-report_2024- 

09.pdf. 

38See 12 CFR 1006.30(a). 

39See Consumer Fin. Prot. Bureau, CFPB Takes 

Action Against Phoenix Financial Services for 

Illegal Medical Debt Collection and Credit 

Reporting Practices (June 8, 2023), https://

www.consumerfinance.gov/about-us/newsroom/ 

cfpb-takes-action-against-phoenix-financialservices-for-illegal-medical-debt-collection-andcredit-reporting-practices/; Consumer Fin. Prot. 

Bureau, CFPB Shuts Down Commonwealth 

Financial Systems for Illegal Debt Collection 

Practices (Dec. 15, 2023), https://

www.consumerfinance.gov/about-us/newsroom/ 

cfpb-shuts-down-commonwealth-financial-systemsfor-illegal-debt-collection-practices/. 

40Equifax, First Changes to Reporting of Medical 

Collection Debt Roll Out July 1, 2022 (July 1, 2022), 

https://www.equifax.com/newsroom/all-news/-/ 

story/first-changes-to-reporting-of-medicalcollection-debt-roll-out-july-1-2022; Experian, First 

Changes to Reporting of Medical Collection Debt 

Roll Out July 1, 2022 (July 1, 2022), https://

www.experianplc.com/newsroom/press-releases/ 

2022/first-changes-to-reporting-of-medicalcollection-debt-roll-out-july-1-2022; TransUnion, 

First Changes to Reporting of Medical Collection 

Debt Roll Out July 1, 2022 (July 1, 2022), https:// 

newsroom.transunion.com/first-changes-toreporting-of-medical-collection-debt-roll-out-july-1- 

2022/. 

41PR Newswire, Equifax, Experian and 

TransUnion Remove Medical Collections Debt 

Under $500 From U.S. Credit Reports (Apr. 11, 

2023), https://www.prnewswire.com/news-releases/ 

equifax-experian-and-transunion-remove-medicalcollections-debt-under-500-from-us-credit-reports301793769.html. 

42Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point, 

at 3–4, 17 (Mar. 2024), https://files.consumer

finance.gov/f/documents/cfpb_recent-changesmedical-collections-on-consumer-credit-reports_

2024-03.pdf. 

43 In 2022, the CFPB issued an interpretive rule 

clarifying that because FCRA’s express preemption 

provisions have a narrow and targeted scope, States 

retain substantial flexibility to pass laws involving 

consumer reporting to reflect emerging problems 

affecting their local economies and citizens, 

including problems related to medical debt. 

Consumer Fin. Prot. Bureau, The Fair Credit 

Reporting Act’s Limited Preemption of State Laws, 

87 FR 41042 (July 11, 2022). 

44Colo. Rev. Stat. section 5–18–109. 

45N.Y. Pub. Health Law art. 49–A. 

46 2024 Calif. SB 1061; 2024 Conn. Act 24–6; 2024 

Minn. Ch. 332C; 2024 New Jersey A3681; 2024 Ill. 

Pub. Act 103–0648; 2024 Va. Acts ch. 751. 

47Consumer Data Indus. Ass’n v. Frey, 26 F.4th 

1 (1st Cir. 2022), cert. denied, 143 S. Ct. 777 (2023). 

48U.S. Dep’t of Veterans Affairs, Threshold for 

Reporting VA Debts to Consumer Reporting 

Agencies, 87 FR 5693 (Feb. 2, 2022). 

49 Kenneth P. Brevoort & Michelle Kambara, 

Consumer Fin. Prot. Bureau, Data point: Medical 

debt and credit scores (May 2014), https://

files.consumerfinance.gov/f/201405_cfpb_report_

data-point_medical-debt-credit-scores.pdf. 

50See Ethan Dornhelm, The Impact of Medical 

Debt on FICO Scores, FICO Blog (July 13, 2015), 

https://www.fico.com/blogs/impact-medical-debtficor-scores; VantageScore, How will changes in 

how medical collection accounts get reported 

impact credit scores? (July 5, 2022), https://

www.vantagescore.com/how-will-changes-in-howmedical-collection-accounts-get-reported-impactcredit-scores/. 

51See AnnaMaria Andriotis, Major Credit-Score 

Provider to Exclude Medical Debts, Wall St. J. (Aug. 

10, 2022), https://www.wsj.com/articles/majorcredit-score-provider-to-exclude-medical-debts11660102729 (VantageScore CEO quoted as saying 

that having medical debt is not necessarily 

reflective of a consumer’s ability to pay back a 

loan). 

continue to collect on and report 

medical bills to credit reporting 

agencies even after the consumer has 

shown that they do not owe the 

amount.37

Some of the errors in medical 

collections tradelines could be due to 

debt collection furnishing practices. 

Some medical debt collectors previously 

used debt collection furnishing to 

engage in a practice known as ‘‘debt 

parking,’’ or ‘‘passive collection.’’ Debt 

collectors would report a debt to a 

consumer reporting agency, then wait 

for the consumer to notice the tradeline 

when, for example, applying for credit. 

The consumer may then pay the debt, 

possibly without raising any dispute as 

to any errors in order to access needed 

credit. The CFPB issued final rules on 

debt collection, which took effect 

November 30, 2021, that addressed this 

practice by requiring a debt collector to 

take certain actions intended to convey 

information about the debt to the 

consumer before furnishing information 

on that debt to a consumer reporting 

agency.38 Despite the protections 

offered by these rules, CFPB 

investigations indicate that some 

medical debt collectors may still be 

attempting to collect on medical debts 

that were not substantiated after 

consumers disputed the validity of the 

debts.39

Recent reporting changes announced 

by the NCRAs in 2022 and 2023 have 

begun to reduce the amount of medical 

debt reported on consumer reports and 

benefit some consumers. Specifically, 

the NCRAs announced that, starting on 

July 1, 2022, unpaid medical collections 

will not appear on a consumer’s report 

for up to one year (an increase from 180 

days), and paid medical collections will 

no longer be on consumer reports.40 In 

April 2023, the NCRAs also announced 

that medical collections with initial 

balances below $500 had been removed 

from consumer reports.41

The CFPB conducted an analysis of 

the impacts of the NCRAs’ medical debt 

reporting changes through June 2023.42

The CFPB found that after these 

changes, 15 million Americans still 

have $49 billion in medical bills on 

their consumer reports. Because the 

medical collections tradelines removed 

by the NCRAs were those with low 

balances, the total dollar balances of 

medical collections on consumer reports 

fell by only 38 percent nationwide. 

Several States and at least one Federal 

agency have also enacted policies that 

limit the inclusion of medical debt on 

consumer reports.43 For example, 

Colorado 44 and New York 45 each 

passed laws in 2023 prohibiting medical 

debts from appearing on consumer 

reports. California, Connecticut, 

Minnesota, New Jersey, Illinois, and 

Virginia followed suit earlier this year.46

Maine, in 2019, passed a law requiring 

consumer reporting agencies to remove 

medical debt upon receiving reasonable 

evidence that the debt has been settled 

or paid.47 In 2022, the U.S. Department 

of Veterans Affairs (VA) finalized a rule 

providing that the VA will report 

medical debt to consumer reporting 

agencies only if all other debt collection 

efforts have been exhausted, the 

individual is not catastrophically 

disabled or entitled to free medical care 

from the VA, and the outstanding debt 

is over $25.48

Current Use of Medical Debt in Credit 

Scoring and Underwriting 

Collections tradelines are considered 

negative information and can lower 

consumers’ credit scores. A 2014 CFPB 

analysis found that the presence of 

medical collections tradelines on 

consumer reports is less predictive of 

future defaults or serious delinquencies 

than the presence of nonmedical 

collections tradelines, and that 

consumers with paid medical debts 

have delinquency rates well below those 

of consumers with the same credit 

scores whose medical debts were mostly 

unpaid.49 Following the CFPB’s 

publication of its research and in 

recognition of the limited predictive 

value of medical bills, major credit score 

providers FICO and VantageScore made 

changes so that newer versions of their 

credit scoring models differentiate 

between medical and nonmedical 

collections tradelines, give less weight 

to unpaid medical collections tradelines 

than to other collections tradelines, and 

ignore paid medical collections of any 

kind.50 In January 2023, VantageScore 

implemented changes to VantageScore 

models 3.0 and 4.0 to ignore all medical 

collections tradelines.51

Older FICO scoring models that do 

not differentiate between medical and 

nonmedical collections tradelines, 

however, remain common in the market. 

For example, while the GovernmentSponsored Enterprises (GSEs), the 

Federal National Mortgage Association 

(Fannie Mae) and the Federal Home 

Loan Mortgage Corporation (Freddie 

Mac), and the Federal Housing 


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52See Fed. Nat’l Mortg. Ass’n, Single Family 

Selling Guide, B3–2–03 (2021), https://sellingguide.fanniemae.com/#Public.20

Records.2C.20Foreclosures.2C.20and.20

Collection.20Accounts (noting that ‘‘[c]ollection 

accounts reported as medical collections are not 

used in the DU risk assessment’’); Fed. Home Loan 

Mortg. Corp., The Single-Family Seller/Servicer 

Guide, 5201.1 (2022), https://

guide.freddiemac.com/app/guide/section/5201.1; 

U.S. Dep’t of Hous. & Urban Dev., Single Family 

Housing Policy Handbook, 4000.1 (2021), https://

www.hud.gov/sites/dfiles/OCHCO/documents/

4000.1hsgh-102021.pdf. 

53The Classic FICO score is comprised of the 

following models: Equifax Beacon® 5.0, Experian/ 

Fair Isaac Risk Model V2SM, and TransUnion 

FICO® Risk Score, Classic 04. 

54See, e.g., Fed. Nat’l Mortg. Ass’n, Single Family 

Selling Guide (Oct. 5, 2022), https://selling-guide.

fanniemae.com/sel/b3-5.1-01/general-requirementscredit-scores. 

55Fed. Hous. Fin. Agency, FHFA Announces Key 

Updates for Implementation of Enterprise Credit 

Score Requirements (Feb. 29, 2024), https://

www.fhfa.gov/Media/PublicAffairs/Pages/FHFAAnnounces-Key-Updates-for-Implementation-ofEnterprise-Credit-Score-Requirements.aspx. 

56Pub. L. 104–121, 110 Stat. 857 (1996). 

57Consumer Fin. Prot. Bureau, Small Business 

Advisory Review Panel for Consumer Reporting 

Rulemaking Outline of Proposals and Alternatives 

Under Consideration (Sept. 15, 2023), https://

files.consumerfinance.gov/f/documents/cfpb_

consumer-reporting-rule-sbrefa_outline-ofproposals.pdf. 

58The Panel was comprised of a representative 

from the CFPB, the Chief Counsel for Advocacy of 

the Small Business Administration (Office of 

Advocacy), and a representative from the Office of 

Information and Regulatory Affairs (OIRA) in the 

Office of Management and Budget. 

59Consumer Fin. Prot. Bureau, Final Report of the 

Small Business Review Panel on the CFPB’s 

Proposals and Alternatives Under Consideration for 

the Consumer Reporting Rulemaking (Dec. 15, 

2023), https://files.consumerfinance.gov/f/ 

documents/cfpb_sbrefa-final-report_consumerreporting-rulemaking_2024-01.pdf. The CFPB 

considers the Panel’s findings in its final regulatory 

flexibility analysis, as set out in part VIII.B below. 

60See SBREFA Outline at 5. 

61Fed. Trade Comm’n & Consumer Fin. Prot. 

Bureau, Roundtable on Data Integrity in Debt 

Collection: Life of a Debt (2013), https://

www.ftc.gov/news-events/events/2013/06/life-debtdata-integrity-debt-collection. 

62See Kenneth P. Brevoort & Michelle Kambara, 

Consumer Fin. Prot. Bureau, Data point: Medical 

debt and credit scores (May 2014), https://

files.consumerfinance.gov/f/201405_cfpb_report_

data-point_medical-debt-credit-scores.pdf. 

63Consumer Fin. Prot. Bureau, Consumer credit 

reports: A study of medical and non-medical 

collections (Dec. 2014), https://

files.consumerfinance.gov/f/201412_cfpb_reports_

consumer-credit-medical-and-non-medicalcollections.pdf. 

64Consumer Fin. Prot. Bureau, Market Snapshot: 

Third-Party Debt Collections Tradeline Reporting 

(July 2019), https://files.consumerfinance.gov/f/ 

documents/201907_cfpb_third-party-debtcollections_report.pdf; Consumer Fin. Prot. Bureau, 

Market Snapshot: An Update on Third-Party Debt 

Collections Tradeline Reporting (Feb. 2023), https:// 

files.consumerfinance.gov/f/documents/cfpb_

market-snapshot-third-party-debt-collectionstradelines-reporting_2023-02.pdf; Ryan Sandler & 

Zachary Blizard, Consumer Fin. Prot. Bureau, 

Recent Changes in Medical Collections on 

Consumer Credit Records Data Point, at 3–4, 17 

(Mar. 2024), https://files.consumerfinance.gov/f/ 

documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

65Consumer Fin. Prot. Bureau, Prohibition on 

Creditors and Consumer Reporting Agencies 

Concerning Medical Information (Regulation V) 

(June 11, 2024), https://www.consumerfinance.gov/ 

rules-policy/rules-under-development/prohibitionon-creditors-and-consumer-reporting-agenciesconcerning-medical-information-regulation-v/. 

66 89 FR 51682 (June 18, 2024). 

Administration generally do not 

consider medical debt in their credit 

risk assessments within their respective 

automated underwriting systems,52 the 

GSEs require creditors to provide credit 

scores derived from the older Classic 

FICO 53 for each borrower on a loan that 

the GSEs purchase to assess eligibility 

for certain loan products and make 

certain pricing decisions.54 The GSEs 

and the Federal Housing Finance 

Agency (FHFA) announced in 2022 that 

they had validated and approved two of 

the new credit score models that lessen 

the weight of or do not consider medical 

collections, but that transition is not 

expected to occur until the fourth 

quarter of 2025.55

II. The Proposal and Other Procedural 

Background 

A. Small Business Advisory Review 

Panel 

Pursuant to the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA),56 the CFPB issued its 

Outline of Proposals and Alternatives 

under Consideration (Outline or 

SBREFA Outline).57 The SBREFA 

Outline addressed a number of 

consumer reporting topics under the 

FCRA, including medical debt 

collections information proposals under 

consideration. The CFPB convened a 

SBREFA Panel on October 16, 2023, and 

held Panel meetings on October 18 and 

19, 2023.58 Representatives from 16 

small businesses were selected as small 

entity representatives for this SBREFA 

process. These entities represented 

small businesses that the CFPB 

determined would likely be directly 

affected by one or more of the proposals 

under consideration. On December 15, 

2023, the Panel completed the Final 

Report of the Small Business Review 

Panel on the CFPB’s Proposals and 

Alternatives Under Consideration for 

the Consumer Reporting Rulemaking 

(Panel Report or SBREFA Report).59 In 

addition to the SBREFA Panel and Panel 

Report, the CFPB also invited feedback 

on the proposals under consideration 

from other stakeholders, including small 

stakeholders who were not small entity 

representatives.60 The CFPB considered 

the feedback related to the medical debt 

collection information proposals from 

small entity representatives and other 

stakeholders, as well as the findings and 

recommendations of the Panel, in 

preparing the proposed rule and this 

final rule. 

B. Other Stakeholder Outreach 

The CFPB has long been engaged in 

outreach and research related to medical 

debt information in the consumer 

reporting ecosystem. In 2013, the CFPB 

and the Federal Trade Commission 

(FTC) jointly hosted a public roundtable 

for industry and other stakeholders on 

the integrity of record keeping by debt 

collectors, debt buyers, and original 

creditors. Participants acknowledged 

that record keeping practices may 

introduce variability or inaccuracy to 

the consumer reporting systems.61 In 

December 2014, following the CFPB’s 

publication of its research report, Data 

Point: Medical Debt and Credit Scores,62

the CFPB issued a study of medical and 

nonmedical collections tradelines on 

consumer reports that assessed the 

furnishing practices of debt collectors 

and debt buyers, the incidence and type 

of collections tradelines on consumer 

reports, and differences between 

medical and nonmedical debt 

reporting.63 The CFPB has continued to 

monitor the incidence of medical debt 

on consumer reports and released 

several other market analyses and 

research reports on medical debt 

collection and consumer reporting 

between 2019 and 2024.64

In developing this final rule and the 

proposed rule, the CFPB consulted with 

staff from various Federal agencies to 

discuss aspects of its proposal, in 

accordance with CFPA section 

1022(b)(2)(B). Specifically, the CFPB 

met with staff from the Board of 

Governors of the Federal Reserve 

System, the Office of Comptroller of the 

Currency, the Federal Deposit Insurance 

Corporation, the National Credit Union 

Administration (NCUA), the FTC, the 

Department of Health and Human 

Services, Department of Housing and 

Urban Development, the FHFA, the 

Small Business Administration, the VA, 

and the Department of Agriculture. 

C. Summary of the Proposed Rule 

On June 11, 2024, the CFPB issued a 

notice of proposed rulemaking (NPRM) 

containing several proposed 

amendments to Regulation V, which 

implements the FCRA, concerning 

medical information.65 The NPRM was 

published in the Federal Register on 

June 18, 2024.66 The CFPB proposed 

that the final rule, if adopted, would 


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67 15 U.S.C. 1681b(g)(5). 

68See https://www.regulations.gov/document/ 

CFPB-2024-0023-0001/comment. 

69 12 U.S.C. 5512(b)(1). 

70See 12 U.S.C. 5481(12), (14). 

71See 12 U.S.C. 5512(b)(2). 

72FCRA section 602(a)(4) (15 U.S.C. 1681(a)(4)). 

73Pub. L. 108–159 (Dec. 4, 2003). Congress also 

enacted specific protections for servicemembers 

and veterans, including with respect to medical 

debt and credit monitoring. Economic Growth, 

Regulatory Relief, and Consumer Protection Act, 

Pub. L. 115–174, section 302, 132 Stat. 1296, 1333 

(2018). 

74H. Rep. No. 108–396, at 1 (2003) (Conf. Rep.); 

S. Rep. No. 108–166, at 3 (2003) (Conf. Rep.). 

75Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 

(2007); see also 15 U.S.C. 1681(a)(4) (recognizing ‘‘a 

need to insure that consumer reporting agencies 

exercise their grave responsibilities with fairness, 

impartiality, and a respect for the consumer’s right 

to privacy’’). 

take effect sixty days after the date it is 

published in the Federal Register. 

In the proposed rule, the CFPB 

discussed how Congress recognized that 

a consumer’s medical information is 

particularly sensitive, warranting 

heightened privacy protections. The 

CFPB explained while Congress did 

permit the Agencies to create 

exceptions, Congress mandated that the 

Agencies determine that any exception 

be ‘‘necessary and appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs’’ and 

consistent with the congressional intent 

‘‘to restrict the use of medical 

information for inappropriate 

purposes.’’ 67 Based on the CFPB’s 

understanding of how consumer 

medical debt differs from other types of 

consumer debt and its uses in credit 

underwriting, the CFPB preliminarily 

determined that creditors’ use of 

medical debt in underwriting does not 

meet that statutory standard, as a result, 

does not warrant an exception to the 

medical information privacy protections 

established by Congress. 

The CFPB proposed targeted 

amendments to Regulation V that 

would: (1) remove the financial 

information exception which broadly 

permits creditors to obtain and use 

medical financial information 

(including information about medical 

debt) in connection with credit 

eligibility determinations, while 

retaining select elements of the 

exception related to income, benefits, 

and loan purpose; and (2) limit the 

circumstances under which consumer 

reporting agencies are permitted to 

furnish medical debt information to 

creditors in connection with credit 

eligibility determinations. 

Under the proposed rule, a creditor 

would no longer be able to obtain or use 

medical information related to debts, 

expenses, assets, or collateral, in 

connection with a credit eligibility 

determination, unless a specific 

exception otherwise applies to the 

creditor’s consideration of the medical 

information. And a consumer reporting 

agency generally would be prohibited 

from furnishing to a creditor a consumer 

report containing medical debt 

information in connection with a credit 

eligibility determination. 

The CFPB also explained in the 

proposed rule that as a result of these 

changes, consumers’ sensitive medical 

information would be protected, and 

consumers would no longer be unfairly 

penalized in the credit market for 

having medical debt. Consumers with 

and without medical debt would have 

equal access to credit at comparable 

terms and debt collectors would have 

less leverage over consumers to pressure 

consumers into paying medical debts 

that they may not owe. 

Comments 

The CFPB received over 74,000 

comments on the proposal.68 Around 

2,000 of these comments were unique 

comment letters. These commenters 

included: consumers; consumer 

advocacy groups; consumer reporting, 

debt collection, and banking trade 

groups; economic research and taxpayer 

advocacy groups; governmental entities, 

including members of Congress; 

medical, dental and hospital 

practitioner groups; and patient 

advocacy groups. 

The remaining comments included 

some duplicate submissions (i.e., letters 

with the same content from the same 

commenter submitted through multiple 

channels, or letters with the same 

content submitted by multiple people 

on behalf of the same commenting 

organization) as well as comments that 

appeared to be part of several comment 

submission campaigns. Such comment 

campaigns typically advocated for or 

against particular provisions in the 

proposal and urged additional changes. 

The CFPB considered all the 

comments it received regarding the 

proposal, made certain modifications, 

and is adopting the final rule as 

described in part IV below. 

III. Legal Authority 

A. CFPA Section 1022(b) 

Section 1022(b)(1) of the CFPA 

authorizes the CFPB to prescribe rules 

‘‘as may be necessary or appropriate to 

enable the [CFPB] to administer and 

carry out the purposes and objectives of 

the Federal consumer financial laws, 

and to prevent evasions thereof.’’ 69 The 

term ‘‘Federal consumer financial laws’’ 

includes the ‘‘enumerated consumer 

laws,’’ which include the FCRA.70

Section 1022(b)(2) of the CFPA 

prescribes certain standards for 

rulemaking that the CFPB must follow 

in issuing rules under Federal consumer 

financial laws.71 For a discussion of the 

CFPB’s standards for rulemaking under 

CFPA section 1022(b)(2), see part VII 

below. 

B. Fair Credit Reporting Act 

The FCRA was enacted in 1970 and 

was one of the world’s first data privacy 

laws. The law was enacted after growing 

public concern about the lack of 

regulation concerning the widespread 

dissemination of sensitive information 

about Americans. One of Congress’s 

main purposes in passing the FCRA was 

a respect for the consumer’s right to 

privacy.72 The law has been amended 

several times in the ensuing years, 

including by the FACT Act.73 For 

example, Congress, through the FACT 

Act, amended the FCRA to include 

additional protections for consumer 

privacy, such as restricting the use and 

transfer of sensitive medical 

information, enhancing the ability of 

consumers to combat identity theft, 

increasing the accuracy of consumer 

reports, and allowing consumers to 

exercise greater control regarding the 

type and amount of marketing 

solicitations they receive.74

The FCRA governs the collection, 

assembly, and use of consumer report 

information and provides the framework 

for the consumer reporting system in the 

United States. The FCRA regulates the 

practices of consumer reporting 

agencies that collect and compile 

consumer information into consumer 

reports for use by creditors, insurance 

companies, employers, landlords, and 

other entities in making eligibility 

decisions affecting consumers. The 

FCRA also limits the circumstances 

under which persons, such as creditors, 

may obtain and use consumer report 

information from consumer reporting 

agencies. 

The FCRA was enacted to (1) prevent 

the misuse of sensitive consumer 

information by limiting recipients to 

those who have a legitimate need for it; 

(2) improve the accuracy and integrity 

of consumer reports; and (3) promote 

the efficiency of the nation’s banking 

and consumer credit systems.75 An 

important purpose of the FCRA is to 

enable creditors to make appropriate 

credit decisions based on accurate 

consumer reporting information that 

truly reflects whether a consumer will 

repay a loan, while simultaneously 


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76S. Rep. No. 91–517, at 1 (1969); see also Trans 

Union Corp. v. FTC, 81 F.3d 228, 234 (D.C. Cir. 

1996). 

77See CFPA section 1088(a)(10)(E) (15 U.S.C. 

1681s(e)). 

78FACT Act sections 411(a), 412(f)(2), 117 Stat. 

1999–2000, 2003 (15 U.S.C. 1681b(g)(2)). FCRA 

section 604(g)(2) provides: ‘‘Except as permitted 

pursuant to paragraph (3)(C) or regulations 

prescribed under paragraph (5)(A), a creditor shall 

not obtain or use medical information (other than 

medical information treated in the manner required 

under section 1681c(a)(6) of this title) pertaining to 

a consumer in connection with any determination 

of the consumer’s eligibility, or continued 

eligibility, for credit.’’ 15 U.S.C. 1681b(g)(2). 

79FACT Act section 411(a), 117 Stat. 2000 (15 

U.S.C. 1681b(g)(1)). 

80FACT Act section 412(a), 117 Stat. 2002 (15 

U.S.C. 1681s–2(a)(9)). 

81FACT Act section 412(b), 117 Stat. 2002 (15 

U.S.C. 1681c(a)(6)). 

82FACT Act section 411(c), 117 Stat. 2001 (15 

U.S.C. 1681a(i)). 

83FACT Act section 411(a), 117 Stat. 2001 (15 

U.S.C. 1681b(g)(5)(A)). 

84 70 FR 70664 (Nov. 22, 2005). See also interim 

final rules published at 70 FR 33958 (June 10, 

2005). 

85 70 FR 70664, 70667 (Nov. 22, 2005). 

86 69 FR 23380, 23384 (Apr. 28, 2004). 

87 Id. 

88 70 FR 70664, 70668 (Nov. 22, 2005). 

89This exception is restated at § 1022.30(e)(1)(ii). 

90 69 FR 23380, 23382 (Apr. 28, 2004). 

91Title X of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act, Pub. L. 111–203, 

section 1088, 124 Stat. 1376, 1955 (2010). 

92 76 FR 79308 (Dec. 21, 2011). 

93 81 FR 25323 (Apr. 28, 2016). 

protecting the privacy of consumer 

data.76

FCRA Section 621(e) 

Effective July 21, 2011, section 1088 

of the CFPA made conforming 

amendments to the FCRA, transferring 

rulemaking authority under much of the 

FCRA, except with respect to sections 

615(e) and 628 and with respect to 

certain motor vehicle dealers, to the 

CFPB. Section 621(e) of the FCRA 

authorizes the CFPB to issue regulations 

as ‘‘necessary or appropriate to 

administer and carry out the purposes 

and objectives of [the FCRA], and to 

prevent evasions thereof or to facilitate 

compliance therewith.’’ 77

FCRA Section 604(g)(2) and (5) 

Through the FACT Act, Congress 

added, in FCRA section 604(g)(2), a 

broad new limitation on the ability of 

creditors to obtain or use medical 

information pertaining to a consumer in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit.78 Congress also 

limited the circumstances under which 

consumer reporting agencies could 

furnish consumer reports containing 

medical information for credit, 

employment, or insurance purposes,79

and generally required consumer 

reporting agencies providing consumer 

reports not to furnish contact 

information for medical information 

furnishers—who were also required to 

identify themselves to consumer 

reporting agencies 80—without 

restrictions or coding ‘‘that do not 

identify, or provide information 

sufficient to infer, the specific provider 

or the nature of such services, products, 

or devices to a person other than the 

consumer.’’ 81 Congress also broadly 

defined medical information in FCRA 

section 603(i) to include ‘‘information or 

data . . . created or derived from a 

health care provider or the consumer, 

that relates to . . . the payment for the 

provision of health care to an 

individual.’’ 82

Congress initially granted rulemaking 

authority to the Agencies to make 

exceptions to the limitation on creditors 

obtaining and using medical 

information that are necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs (including 

administrative verification purposes), 

consistent with congressional intent to 

restrict the use of medical information 

for inappropriate purposes.83 Pursuant 

to this authority, the Agencies 

promulgated final rules that, among 

other things, implemented the statute’s 

general prohibition on creditors 

obtaining or using medical information 

pertaining to a consumer in connection 

with any determination of the 

consumer’s eligibility, or continued 

eligibility, for credit and created 

exceptions to the prohibition.84

The Agencies’ final rules contain the 

financial information exception for 

creditors obtaining and using medical 

information in credit eligibility 

determinations.85 The financial 

information exception consists of a 

three-part test which allows creditors to 

use medical information in connection 

with credit eligibility determinations so 

long as (1) the information is the type 

of information routinely used in making 

credit eligibility determinations; (2) the 

creditor uses the information in a 

manner and to an extent no less 

favorably than comparable nonmedical 

information; and (3) the creditor does 

not take the consumer’s physical, 

mental, or behavioral health, condition 

or history, type of treatment, or 

prognosis into account when making the 

determination. The Agencies stated that 

the ‘‘three-part test strikes a balance 

between permitting creditors to obtain 

and use certain medical information 

about consumers when necessary and 

appropriate to satisfy prudent 

underwriting criteria and to ensure that 

credit is extended in a safe and sound 

manner, while restricting the use of 

medical information for inappropriate 

purposes.’’ 86 Although the Agencies 

explained the boundaries of their threepart test, and gave responses to 

commenters on various examples, they 

did not provide evidence or reasoning to 

support the main conclusion that an 

exception from a congressionally 

created legal requirement was 

warranted, other than a single 

conclusory sentence in the proposed 

rule stating that ‘‘[a] creditor should not 

be prohibited from obtaining or using 

information about a debt, for example, 

in connection with making a credit 

decision, just because that debt happens 

to be for medical products or 

services.’’ 87

The Agencies’ final rules also 

identified a limited number of other 

particular purposes for which a creditor 

may use medical information in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit.88 For example, a 

creditor may use medical information in 

credit eligibility determinations to 

comply with applicable requirements of 

local, State, or Federal laws.89 The 

Agencies found that this exception, and 

the other enumerated specific 

exceptions, are necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs (including 

administrative verification purposes), 

and are consistent with the 

congressional intent to restrict the use of 

medical information for inappropriate 

purposes.90

Congress (through the CFPA) 

transferred to the CFPB primary 

regulatory authority for the FCRA.91 The 

CFPB restated the Agencies’ regulations 

as an interim final rule, with request for 

comment, on December 21, 2011.92 On 

April 28, 2016, the CFPB finalized the 

interim final rule without assessing or 

otherwise reconsidering the policy 

decisions and justifications that served 

as the basis for the regulations.93

As a result of the transfer of authority, 

FCRA section 604(g)(5) now authorizes 

the CFPB to prescribe regulations to 

create exceptions from the statutory 

prohibition on obtaining or using 

medical information in connection with 

determinations of credit eligibility. 

However, the CFPB must determine that 

such exceptions to the general 

prohibition in FCRA section 604(g)(2) 

are necessary and appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs 

(including administrative verification 

purposes), consistent with the 


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94 15 U.S.C. 1681b(g)(5). 

95 15 U.S.C. 1681b(a). Other sections of the FCRA 

identify additional limited circumstances under 

which consumer reporting agencies are permitted or 

required to disclose certain information to 

government agencies. See 15 U.S.C. 1681f, 1681u, 

1681v; see also, e.g., FTC v. Manager, Retail Credit 

Co., Miami Beach Branch Off., 515 F.2d 988, 994– 

95 (D.C. Cir. 1975) (holding that 15 U.S.C. 1681s(a) 

authorizes the FTC to obtain consumer reports in 

FCRA enforcement investigations). Further, the 

Debt Collection Improvement Act of 1996, Pub. L. 

104–134, section 31001(m)(1), 110 Stat. 1321–366, 

allows the head of an executive, judicial, or 

legislative agency to obtain a consumer report 

under certain circumstances relating to debt 

collection. See 31 U.S.C. 3711(h). 

96 15 U.S.C. 1681e(a). 

97 15 U.S.C. 1681b(f). 

98 15 U.S.C. 1681b(g)(2). 

congressional intent to restrict the use of 

medical information for inappropriate 

purposes.94 Because the CFPB has 

determined that a regulatory exception 

for certain financial information is not 

necessary and appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs 

(including administrative verification 

purposes), the CFPB is removing the 

exception. This ensures that only 

exceptions that are necessary and 

appropriate, consistent with the CFPB’s 

rulemaking authority under FCRA 

section 604(g)(5), remain in § 1022.30. 

FCRA Section 604(a) Permissible 

Purposes and Related Provisions 

The FCRA protects consumer privacy 

in multiple ways, including by clearly 

prohibiting certain uses of data and 

limiting the circumstances under which 

consumer reporting agencies may 

disclose consumer information. FCRA 

section 604, entitled Permissible 

purposes of consumer reports, identifies 

an exclusive list of permissible purposes 

for which consumer reporting agencies 

may provide consumer reports.95 The 

statute states that a consumer reporting 

agency may provide consumer reports 

under these circumstances ‘‘and no 

other.’’ In addition, FCRA section 607(a) 

requires that ‘‘[e]very consumer 

reporting agency shall maintain 

reasonable procedures designed to . . . 

limit the furnishing of consumer reports 

to the purposes listed under section 

604.’’ 96

In addition to imposing permissible 

purpose limitations on consumer 

reporting agencies, the FCRA limits the 

circumstances under which third parties 

may obtain and use consumer report 

information from consumer reporting 

agencies. FCRA section 604(f) provides 

that a person shall not use or obtain a 

consumer report unless the consumer 

report is obtained for a purpose for 

which the consumer report is 

authorized to be furnished under FCRA 

section 604 and the purpose is certified 

in accordance with FCRA section 607 by 

a prospective user of the report.97

The FCRA’s permissible purpose 

provisions are thus a key component to 

the statute’s protection of consumer 

privacy. Consumers suffer harm when 

consumer reporting agencies provide 

consumer reports to persons who are 

not authorized to receive the 

information or when recipients of 

consumer reports obtain or use such 

reports for purposes other than 

permissible purposes. These harms 

include the invasion of consumers’ 

privacy, as well as reputational, 

emotional, physical, and economic 

harms. 

Because the CFPB is removing the 

financial information exception, which 

broadly permitted creditors to obtain 

and use medical financial information 

(including information about medical 

debt) in connection with credit 

eligibility determinations, creditors 

generally will no longer have a 

permissible purpose for consumer 

reports containing medical debt 

information. 

IV. Discussion of the Final Rule 

A. Overview of the CFPB’s Approach 

As discussed above, the CFPB 

proposed to amend Regulation V to 

remove a regulatory exception from the 

limitation in the FCRA on creditors 

obtaining or using information on 

medical debts for credit eligibility 

determinations. The CFPB also 

proposed that a consumer reporting 

agency generally may not furnish to a 

creditor a consumer report containing 

information on medical debt that the 

creditor is prohibited from using. 

Congress restricted a creditor’s ability 

to obtain or use a consumer’s medical 

information in connection with any 

determination of the consumer’s 

eligibility, or continued eligibility, for 

credit.98 When the Agencies issued the 

current regulatory exception to the 

statutory prohibition, they did so 

without providing evidence or 

reasoning to support their main 

conclusion that an exception from a 

congressionally created legal 

requirement was warranted. Research 

has shown that medical debt has limited 

predictive value for credit underwriting 

purposes. Market participants, 

including in the consumer reporting 

industry and those most financially 

incentivized to assess the predictive 

value of medical debt, have reduced 

their reliance on medical debt in 

recognition of its limited utility. 

The CFPB proposed this rule to 

address concerns that the regulatory 

exception to the medical information 

privacy protections established by 

Congress, which allows creditors to use 

medical debt information for 

underwriting, is not necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs, nor 

consistent with the intent to restrict the 

use of medical information for 

inappropriate purposes. The CFPB 

proposed removing the broad regulatory 

exception—while retaining select 

elements of the exception related to 

income, benefits, and loan purpose— 

and limiting the circumstances under 

which consumer reporting agencies are 

permitted to furnish medical debt 

information to creditors in connection 

with credit eligibility determinations. 

The CFPB is adopting the same 

general approach in the final rule, with 

some modifications, as discussed 

herein. 

Comments Received on the CFPB’s 

Proposed Approach Generally 

Comments received by the CFPB on 

the proposal, and responses thereto, are 

discussed in more detail throughout this 

notice. The following is a synopsis of 

comments received on the CFPB’s 

proposed approach generally. 

Commenters, including consumer 

advocate groups and consumers 

(generally in the form of a comment 

submission campaign), supported the 

CFPB’s proposal, noting that the rule 

would align with congressional intent 

behind the FCRA, as amended by the 

FACT Act, and agreeing that medical 

debt information should be treated 

differently than other debt information. 

Commenters stated that the proposed 

rule is within the CFPB’s legal authority 

under FCRA sections 621(e) and 

604(g)(5) and will promote the FCRA’s 

objectives as to the accuracy, fairness, 

and privacy of consumer information— 

given that medical debt is often 

inaccurate or error prone, is 

inconsistently reported, and has limited 

predictive value for credit underwriting. 

Commenters also stated that medical 

debt disproportionately impacts 

vulnerable populations and the CFPB’s 

proposal would mitigate medical debt’s 

negative impacts on consumers’ health 

decisions and financial well-being, 

including by increasing consumers’ 

access to credit. 

Other commenters including industry 

commenters and consumers opposed 

the CFPB’s proposal, asserting that it is 

arbitrary and capricious, exceeds the 

CFPB’s legal authority, and conflicts 

with FCRA, as amended by the FACT 


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99FCRA section 604(g)(2) (15 U.S.C. 1681b(g)(2)). 

100As described above, Congress also limited the 

circumstances under which consumer reporting 

agencies can provide consumer reports containing 

medical information for credit, employment, or 

insurance purposes, and required consumer 

reporting agencies to restrict or code contact 

information for medical information furnishers. 15 

U.S.C. 1681b(g)(1), 1681c(a)(6). 

101 15 U.S.C. 1681b(g)(5). 

102 12 CFR 1022.30(d)(1). 

103Fair Credit Reporting Medical Information 

Regulations (2004 NPRM), 69 FR 23380, 23384 

(Apr. 28, 2004). 

Act, and other laws. Commenters 

disagreed with the proposal’s evidence 

that medical debt information has 

limited predictive value and asserted it 

is necessary for credit underwriting 

purposes and should not be treated 

differently than other debt information. 

Commenters stated that the CFPB’s 

proposal would undermine the fairness 

and accuracy of credit reports and have 

negative impacts on consumers’ ability 

to repair credit scores by making 

payments on collection tradelines and 

on creditors’ ability to accurately assess 

creditworthiness—resulting in lessqualified consumers becoming 

overleveraged and well-qualified 

consumers experiencing decreased 

access to credit. Commenters also 

contended that the CFPB’s proposal 

could result in lost income for medical 

providers, higher healthcare costs for 

consumers, and increased debt 

collection litigation. 

B. Removal of the Financial Information 

Exception to the Creditor Prohibition on 

Obtaining or Using Medical Information 

The creditor prohibition in section 

604(g)(2) of the FCRA,99 incorporated at 

Regulation V § 1022.30(b), restricts 

creditors from obtaining or using (i.e., 

considering) medical information 

pertaining to a consumer in connection 

with any determination of the 

consumer’s eligibility, or continued 

eligibility, for credit. Regulatory 

exceptions to this prohibition are at 

current § 1022.30(d) and (e), which are 

respectively titled ‘‘Financial 

information exception for obtaining and 

using medical information’’ (financial 

information exception) and ‘‘Specific 

exceptions for obtaining and using 

medical information’’. 

The CFPB proposed removing the 

financial information exception at 

§ 1022.30(d). For the reasons discussed 

in part IV.B.1, Medical Information 

Related to Debts, and part IV.B.2, 

Medical Information Related to 

Expenses, Assets, and Collateral, the 

CFPB is finalizing this change as 

proposed. The CFPB also proposed 

retaining certain elements of the 

financial information exception related 

to income, benefits, and purpose of the 

loan by moving relevant provisions to 

the list of specific exceptions to the 

creditor prohibition at § 1022.30(e). For 

reasons discussed in part IV.B.3, 

Medical Information Related to Income, 

Benefits, or the Purpose of the Loan, the 

CFPB is finalizing its proposal to retain 

elements of the financial information 

exception as to income, benefits, and 

the purpose of the loan. The CFPB has 

also revised the proposed text for the 

revised exception to include medical 

information contained in the transaction 

information of an account for a 

consumer financial product or service 

described in 12 CFR 1033.111(b)(1) 

through (3), and accessed with the 

consumer’s authorization, as discussed 

in part VI.A, Consumer-Authorized 

Transaction History. 

Additionally, the CFPB proposed 

adding a definition for ‘‘medical debt 

information’’ at § 1022.3(j). The CFPB is 

finalizing the definition as proposed for 

the reasons discussed in the relevant 

portion of the discussion in part IV.B.1, 

Medical Information Related to Debts. 

The CFPB also proposed and is 

finalizing conforming amendments to 

§ 1022.30(c) to remove the reference to 

the financial information exception in 

§ 1022.30(d), because the exception is 

removed under the final rule. Further, 

the CFPB proposed and is finalizing the 

removal of an example at existing 

§ 1022.30(c)(3)(iii), which the CFPB 

discusses further in part IV.C, Limits on 

a Consumer Reporting Agency’s 

Disclosure of Medical Debt Information. 

In the NPRM, the CFPB explained that 

Congress had put in place strong 

privacy protections for consumers’ 

medical information in the FCRA, 

including by enacting the creditor 

prohibition through FCRA section 

604(g)(2).100 Congress also provided 

additional protections by stipulating 

that the CFPB may permit exceptions to 

the creditor prohibition only when the 

CFPB has determined the exceptions to 

be ‘‘necessary and appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs . . . 

consistent with the intent of [FCRA 

section 604(g)(2)] to restrict the use of 

medical information for inappropriate 

purposes.’’ 101

The CFPB further explained that, 

consistent with the general creditor 

prohibition in FCRA section 604(g)(2), 

current § 1022.30(b)(1) states: ‘‘A 

creditor may not obtain or use medical 

information pertaining to a consumer in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit, except as provided 

in this section.’’ The CFPB also noted 

that in 2005, before the CFPA 

transferred primary regulatory authority 

for the FCRA to the CFPB, the Agencies 

adopted the exceptions to this 

prohibition that are now codified in the 

financial information exception at 

§ 1022.30(d) and the list of specific 

exception at § 1022.30(e) (listing 

specific exceptions). 

The CFPB also explained that the 

financial information exception allows a 

creditor to consider medical information 

pertaining to a consumer in connection 

with any determination of the 

consumer’s eligibility, or continued 

eligibility, for credit if the conditions of 

the following three-part test are met: (1) 

the information is the type routinely 

used in making credit eligibility 

determinations, such as information 

relating to debts, expenses, income, 

benefits, assets, collateral, or the 

purpose of the loan, including the use 

of proceeds; (2) the creditor uses the 

medical information in a manner and to 

an extent no less favorable than it would 

use comparable information that is not 

medical information; and (3) the 

creditor does not take the consumer’s 

physical, mental, or behavioral health, 

condition or history, type of treatment, 

or prognosis into account as part of the 

credit eligibility determination.102

The CFPB observed that the 

predecessor Agencies had stated that it 

was their belief that the financial 

information exception struck a balance 

between permitting creditors to obtain 

and use certain medical information 

about consumers when necessary and 

appropriate to satisfy prudent 

underwriting criteria and ensuring that 

credit is extended in a safe and sound 

manner, while restricting the use of 

medical information for inappropriate 

purposes.103 However, the CFPB noted 

that the Agencies had not cited evidence 

or provided analysis in support of this 

statement of their conclusion. 

Comments received in response to 

specific aspects of the CFPB’s proposal 

to remove the financial information 

exception, and the CFPB’s reasons for 

finalizing its proposed removal of the 

exception with regard to each such 

aspect, are discussed separately below 

in this part IV.B, Removal of the 

Financial Information Exception to the 

Creditor Prohibition on Obtaining or 

Using Medical Information. 

1. Medical Information Related to Debts 

In its proposal, the CFPB explained 

that by proposing to eliminate the 

financial information exception, the 

CFPB was generally proposing to 

prohibit creditors from considering, in 


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104 12 CFR 1022.30(d)(1)(i). 

105 12 CFR 1022.30(d)(2)(i)(A). 

106 12 CFR 1022.30(d)(2)(i)(D). 

107The CFPB explained that its use of the word 

‘‘owed’’ referred to the characterization of the debt 

by the health care provider or its agent or assignee. 

108Cf. 15 U.S.C. 1681s–2(a)(9) (providing that the 

term ‘‘medical information furnisher’’ includes the 

‘‘agent or assignee’’ of a medical provider). 

connection with credit eligibility 

determinations, certain financial 

information related to consumers’ 

medical debts. 

The financial information exception 

currently permits a creditor to consider 

certain medical information related to a 

consumer’s debts in connection with 

any determination of the consumer’s 

eligibility, or continued eligibility, for 

credit.104 Such medical information 

related to medical debt includes, for 

example, ‘‘[t]he dollar amount, 

repayment terms, repayment history, 

and similar information regarding 

medical debts to calculate, measure, or 

verify the repayment ability of the 

consumer, the use of proceeds, or the 

terms for granting credit’’ 105 and ‘‘[t]he 

identity of creditors to whom 

outstanding medical debts are owed in 

connection with an application for 

credit, including but not limited to, a 

transaction involving the consolidation 

of medical debts’’ 106 (collectively 

referred to herein as financial 

information). 

Thus, under the CFPB’s proposal, 

which the CFPB is finalizing as 

proposed for the reasons discussed in 

this part IV.B.1, a creditor would no 

longer be able to consider such medical 

information related to a consumer’s 

medical debt, unless one of the specific 

exceptions in final § 1022.30(e) applies. 

Specifically, as discussed in further 

detail below, the CFPB is finalizing its 

interpretation as set forth in the 

proposed rule that for information about 

a consumer’s debt to be ‘‘medical 

information’’ under FCRA section 

603(i), the information must relate to a 

debt the consumer owes, or at one time 

owed, directly to a health care provider 

or to the health care provider’s agent or 

assignee for the provision of the health 

care underlying the payment obligation. 

The CFPB is also finalizing its definition 

of medical debt information in final 

§ 1022.3(j), as medical information that 

pertains to a debt owed by a consumer 

to a person whose primary business is 

providing medical services, products, or 

devices (also referred to herein as a 

health care provider), or to the person’s 

agent or assignee, for the provision of 

such medical services, products, or 

devices. The definition also provides 

that medical debt information includes, 

but is not limited to, medical bills that 

are not past due or that have been paid. 

Further, the CFPB has concluded that it 

generally is neither ‘‘necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs,’’ nor 

consistent with Congress’s intent ‘‘to 

restrict the use of medical information 

for inappropriate purposes,’’ for 

creditors to consider sensitive financial 

information concerning a consumer’s 

medical debt in underwriting. 

Preliminary Interpretation—Owes or 

Owed to a Health Care Provider 

FCRA section 603(i)’s definition of 

‘‘medical information,’’ incorporated in 

Regulation V at § 1022.3(k), informs the 

types of medical debt that creditors are 

generally prohibited from considering, 

but for which the financial information 

exception currently applies. Medical 

information is defined as ‘‘[i]nformation 

or data, whether oral or recorded, in any 

form or medium, created by or derived 

from a health care provider or the 

consumer’’ that relates to, among other 

things, ‘‘[t]he payment for the provision 

of health care to an individual.’’ 

In its proposal, the CFPB explained 

that with regard to ‘‘[t]he payment for 

the provision of health care to an 

individual’’—i.e., the subset of ‘‘medical 

information’’ concerning debt—the 

CFPB proposed to interpret FCRA 

section 603(i) to mean that medical 

information about a consumer’s debt 

must relate to a debt the consumer 

owes, or at one time owed (for example, 

in the case of paid medical debt), 

directly to a health care provider or to 

the health care provider’s agent or 

assignee.107 Specifically, the CFPB 

stated that the statute provides that 

medical information is information or 

data ‘‘created by or derived from a 

health care provider or the consumer’’ 

that relates to ‘‘the payment for the 

provision of health care to an 

individual.’’ And, as a result, the CFPB 

preliminarily interpreted the statute’s 

use of the phrase ‘‘provision of health 

care,’’ following the requirement that 

the medical information must be 

‘‘created by or derived from a health 

care provider or the consumer,’’ to mean 

that for information on a debt to be 

medical information under the FCRA, 

the information must relate to a debt 

arising from a payment obligation that 

the consumer owes (or at one time 

owed) directly to a health care provider 

for the provision of the health care 

underlying the payment obligation. 

The CFPB also stated that its 

preliminary interpretation would 

include medical debt that had been sold 

or resold to a debt buyer, who had 

become the health provider’s assignee 

for the debt, because the payment 

obligation that was sold was created by 

a health care provider and at one time 

was owed to the health care provider. It 

would also include medical debt that 

had been assigned to a third-party debt 

collector, who was acting as an agent on 

behalf of the health care provider, or 

debt buyer to whom the debt was 

owed.108 Further, it would include 

medical information in the form of a 

civil judgment arising from a debt 

collection action as to a medical debt 

directly owed to a health care provider 

or debt buyer, whether provided on a 

consumer report, by the consumer on a 

credit application, or if the creditor 

learned of the civil judgment through 

other means; a credit score that had 

weighed medical debt information; and 

debts arising from medical care that is 

elective, or otherwise not medically 

necessary (e.g., some cosmetic 

surgeries). 

The CFPB further explained that 

because medical information on a 

consumer’s debt must relate to a debt 

the consumer owes (or owed) directly to 

a health care provider under the CFPB’s 

preliminary interpretation, medical debt 

would not include a debt owed to a 

third-party lender (including a medical 

credit card issuer whose products are 

offered specifically for the payment of 

medical services or general purpose 

credit card issuer), from whom a 

consumer took out a loan to pay medical 

expenses or bills. The CFPB noted that 

such loans would be new debt 

obligations used to pay the medical debt 

obligation owed to a health care 

provider. Moreover, the CFPB also 

preliminarily concluded that debts 

owed to such third-party lenders are 

distinguishable from debts that health 

care providers have sold to debt buyers 

because medical debts are assigned to 

such debt buyers, but not to third-party 

lenders. 

The CFPB sought comment on its 

approach and on whether, in the 

alternative, information about debts 

generally incurred to pay for medical 

bills and expenses should be considered 

to be ‘‘medical information’’ that is 

‘‘derived’’ from a health care provider or 

consumer. The CFPB also sought 

comment on the feasibility of furnishing 

such medical debt information under 

this latter approach to consumer 

reporting agencies and reporting to 

creditors in a way that distinguishes 

between loan obligations and 

disbursements that pay for medical 

expenses and those that do not. 


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109The CFPB also received comments addressing 

its preliminary interpretation that information 

about a debt originally owed to a health care 

provider that has been sold and resold to a debt 

buyer or assigned to a third-party debt collector is 

generally medical information. These comments are 

discussed with comments about the CFPB’s 

proposed medical debt information definition 

(§ 1022.3(j)) later in this part. 

In consideration of its preliminary 

interpretation of FCRA section 603(i), 

the CFPB also proposed adding a 

definition for medical debt information 

at § 1022.3(j) to facilitate compliance 

with various aspects of the proposed 

rule. As explained in the NPRM, the 

CFPB’s intent was for the definition of 

medical debt information under 

proposed § 1022.3(j) to align with the 

scope of information about medical debt 

(also referred to herein as medical debt 

information) that creditors would be 

prohibited from considering if the 

financial information exception is 

removed. 

The CFPB’s proposed medical debt 

definition, comments received in 

response to the proposed definition, and 

the CFPB’s responses are generally 

discussed later in this part. To the 

extent commenters raised issues related 

to and about the CFPB’s preliminary 

interpretation of medical debt 

information under FCRA section 603(i) 

in the context of their discussion of 

other aspects of the CFPB’s proposal, 

including of the proposed definition at 

§ 1022.3(j), such issues are generally 

addressed immediately below. 

Comments—Preliminary Interpretation: 

Owes or Owed to a Health Care Provider 

The CFPB received a number of 

comments related to and about its 

preliminary interpretation of medical 

information under FCRA section 603(i), 

that medical information about a 

consumer’s debt must relate to a debt 

the consumer owes, or at one time 

owed, directly to a health care provider 

or to the health care provider’s agent or 

assignee. Comments also discussed the 

corresponding scope of the proposed 

medical debt information definition at 

§ 1022.3(j) in relation to medical debt 

owed to third-party lenders, information 

about civil judgments arising from 

medical debt collection litigation, and 

credit scores that weighed medical debt 

information.109

Third-Party Lenders 

A number of commenters agreed with 

the CFPB’s position that medical debt 

directly owed to a health care provider, 

or to their agent or assignee, should be 

information about medical debt that is 

subject to the creditor prohibition. One 

such commenter, who generally 

supported the CFPB’s proposal, stated 

that the CFPB’s interpretation of FCRA 

section 603(i) would protect consumers’ 

sensitive medical information and 

prevent the mischaracterization or 

improper assignments of debts arising 

from services directly provided by 

health care professionals. However, the 

commenter, and many others that also 

substantially supported the CFPB’s 

proposal, expressed concern that the 

CFPB’s proposed interpretation and 

proposed medical debt information 

definition did not also include 

information about medical debts 

incurred by a consumer that had been 

paid for with third-party lender 

payment products. Some of these 

commenters urged the CFPB to revise its 

preliminary interpretation as to medical 

debt information under FCRA section 

603(i) and/or its proposed definition 

under § 1022.3(j) to include information 

about such debts owed to third-party 

lenders. 

Specifically, commenters stated that 

the CFPB should include other sources 

of medical debt, such as general purpose 

credit cards, medical credit cards, 

medical installment loans, loans owed 

to friends and family, and loans owed 

to third-party lenders, within the scope 

of the rulemaking. While some 

commenters urged the CFPB to include 

all types of third-party loan products, 

many commenters specifically 

emphasized that medical debt incurred 

through medical credit cards and 

general purpose credit cards should be 

included. Others requested that the 

CFPB include medical credit cards 

without mention of general purpose 

credit cards. Some commenters urged 

the CFPB to more broadly include thirdparty medical payment or lending 

products specifically meant to pay for 

medical care, such as medical credit 

cards (including those used to pay 

dental expenses) or medical financing 

plans. 

With regard to credit cards, 

commenters stated that credit cards are 

a significant source of medical debt, 

with some commenters flagging that 

they are prevalently used by specific 

populations like older Americans or 

patients with chronic conditions or 

cancer. These commenters also stated 

that the same reasons that make 

information about medical debt unfair 

and unreliable indicators of a 

consumer’s creditworthiness (i.e., that 

the debts are often incurred on an 

involuntary and unexpected basis so 

that consumers have little ability to 

compare and negotiate prices) also 

apply to medical debt paid for with 

these kinds of third-party lending 

products. The commenters expressed 

concern that not including medical debt 

from these types of products within the 

scope of the CFPB’s final rule would 

leave consumers with such debt without 

the protections of the rule. One 

commenter stated that a broad 

interpretation of the term medical 

information and medical debt 

information definition would provide 

flexibility to capture future types of 

medical financing. 

With regard to medical payment 

products, commenters stated that if the 

CFPB’s final rule does not apply to 

debts owed to issuers of medical 

payment products, such debts could 

become a loophole that would result in 

more medical providers promoting or 

requiring the use of these products, 

particularly if there is general shift 

towards requiring upfront payment for 

medical services. One commenter cited 

Arizona’s Predatory Debt Collection 

Protection Act as an example of the 

importance of ensuring that such types 

of debt are included in the final 

definition. The commenter stated that 

although the Arizona law limits the 

maximum interest rate on medical debt 

to 3 percent, the law does not consider 

credit cards or loans taken out to pay for 

medical debt to be subject to the interest 

rate ceiling. And, as a result, there are 

medical credit cards charging Arizona 

residents significantly more than 3 

percent interest. 

With regard to medical credit cards, 

some commenters stated that medical 

credit cards can be more expensive than 

other forms of payment, may be 

advertised with low promotional 

interest rates but later have much higher 

interest rates, and may be used to pay 

for expenses that the consumer never 

incurred. Other commenters stated that 

consumers may be misled or not fully 

informed about such cards by their 

medical providers and in some 

instances may not even be aware that 

they are opening up a credit account. 

Commenters also noted that the use of 

medical credit cards is increasing, citing 

factors such as how they are being used 

to finance a growing array of medical 

services that may or may not be covered 

by health insurance, the trend of health 

insurance practices shifting costs to 

patients through high deductible and 

limited network plans, and that medical 

providers may be motivated to promote 

medical credit cards’ use to reduce 

administrative billing costs and improve 

the timeliness of consumer payments. A 

couple of commenters also noted that 

some states, like Connecticut and New 

York, already restrict the medical debt 

from being on credit reports, including 

if charged to a medical credit card. 

Several commenters stated that 

expanding the CFPB’s preliminary 


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110Medical Debt Relief Act, H.R. 6003, 118th 

Cong. (2023). 111 70 FR 33958, 33963 (June 10, 2005). 

interpretation of medical debt 

information and proposed definition 

would be consistent with the FCRA. A 

couple of commenters stated that the 

CFPB should consider information 

about debts generally incurred to pay for 

medical bills and expenses to be 

‘‘medical information’’ that is ‘‘derived’’ 

from a health care provider or consumer 

under FCRA section 603(i). Another 

commenter made a similar argument, 

specifically as to medical credit cards. 

One commenter suggesting that the 

interpretation and proposed definition 

should include all purchases for 

medical services, products and devices, 

irrespective of the type of financing, 

stated that these changes would be 

consistent with the FCRA, because a 

consumer creates medical information 

by seeking out and obtaining medical 

services, products or devices and creates 

a payment obligation through 

intermediary payment methods by 

opening up a credit card or medical 

payment product where they bear the 

financial obligation. The commenter 

cited, as an example, a definition for 

‘‘medical debt’’ in legislation under 

consideration in Congress, which 

provides that a medical debt is a debt 

related to, in whole or in part, 

transactions, accounts, or balances 

arising from the receipt of medical 

services, products, or devices.110

Another commenter urging the CFPB to 

include medical credit cards within the 

final rule’s scope stated that medical 

credit cards are lending products, which 

the CFPB has broad authority over. 

Some commenters stated that they 

agree with the CFPB’s interpretation, 

and its proposed definition for medical 

debt information aligning with that 

interpretation, because they said it 

reflects the most reasonable 

interpretation of the statute. 

Consequently, these commenters stated 

that the CFPB should not revise the 

CFPB’s interpretation of medical 

information under FCRA section 603(i) 

and the CFPB’s proposed medical debt 

definition to include medical debts paid 

for with payment products from thirdparty lenders and creditors, such as 

general purpose credit card issuers, 

specialty credit card issuers, issuers of 

medical payment products, and home 

equity lenders. The commenters stated 

that the distinction was important, with 

several urging the CFPB to affirmatively 

exclude medical debt owed to thirdparty lenders and creditors in the final 

medical debt information definition. 

Several of the commenters, who also 

generally opposed the CFPB’s proposal, 

stated that an expansion of the medical 

debt information definition would 

remove more types of debt information 

from creditors’ consideration when 

underwriting credit and affect creditors’ 

ability to make risk-based lending 

decisions, leading to overleveraged 

consumers or causing lenders to tighten 

their underwriting standards and 

increase the cost of credit to offset 

anticipated increases in a consumer’s 

repayment risk. 

One commenter stated that the CFPB’s 

preliminary interpretation of FCRA 

section 603(i) is arbitrary and 

capricious, because it distinguishes 

between creditors who are health care 

providers (and their agents or assignees) 

and credit card issuers. The commenter 

stated that such a distinction is arbitrary 

because whether a consumer pays a 

healthcare provider by credit card or if 

the healthcare provider sends a 

consumer a bill is the result of the 

consumer’s choice of payment and 

individual health provider billing 

practices. Yet, under the CFPB’s 

preliminary interpretation and its 

proposed rule, in the former scenario 

information about the debt could be on 

a consumer report and in the latter it 

could not be, even though the consumer 

has the same credit risk and the same 

amount of debt. The commenter stated 

the proposed approach could give 

consumers the ability to manipulate 

their credit scores. The commenter 

stated that the CFPB did not address 

this issue in the NPRM, which it says is 

arbitrary and capricious. The 

commenter also characterized the 

CFPB’s interpretation as a departure 

from the position it states was taken by 

the CFPB’s predecessor Agencies and 

accepted by the CFPB in restating 

Regulation V after primary regulatory 

authority for the FCRA was transferred 

to it. Specifically, the commenter cited 

the Agencies’ interim final rule 

implementing section 411 of the FACT 

Act. The commenter pointed to 

language where the Agencies stated that 

the creditor prohibition at FCRA section 

604(g)(2) applies to all creditors and that 

the scope of the exceptions to the 

prohibition adopted pursuant to FCRA 

section 604(g)(5) is as broad as the 

prohibition and applies to all 

creditors.111 The commenter started that 

the CFPB did not address what the 

commenter characterized as a change in 

interpretation as to the statutory text. 

In the NPRM, the CFPB asked for 

public comment on the feasibility of 

furnishing medical debt information to 

consumer reporting agencies and 

reporting to creditors in a way that 

distinguishes between loan obligations 

and disbursements that pay for medical 

expenses and those that do not, if the 

CFPB were to consider information 

about debts generally incurred to pay for 

medical bills and expenses to be 

‘‘medical information’’ that is ‘‘derived’’ 

from a health care provider or 

consumer. One commenter who 

supported expanding the CFPB’s 

proposed definition of medical debt 

information (and interpretation of 

medical information under the FCRA) 

suggested that for medical expenses 

charged to general purpose credit cards, 

a furnisher or lender providing 

information to the credit reporting 

agencies would merely need to 

designate that the debt is medical debt. 

Other commenters stated that they 

believed medical expenses on credit 

cards could be identified by using 

Merchant Category Codes (MCC). One 

commenter stated that the CFPB should 

require credit card issuers to have 

medical providers identify themselves 

using the MCCs for medical services and 

supplies. Another commenter noted, for 

example, that flexible spending account 

credit cards use MCCs to automatically 

substantiate qualified expenses and 

suggested that a similar technology 

applied under the CFPB’s final rule. 

Some commenters suggested that the 

CFPB require credit card issuers to 

exclude negative information about 

debts from merchants who are coded 

under the MCCs as medical providers. 

One such commenter stated that, under 

this approach, the CFPB would be 

required to establish rules for payment 

application and allocation of interest for 

mixed medical and non-medical credit 

card balances through a separate 

rulemaking, which it anticipated would 

not be more complicated than the rules 

for payment allocation and calculation 

of interest on balances with different 

annual percentage rates (APRs) under 

Regulation Z, to make clear to what 

portions of a consumer’s credit card 

debt could be provided to consumer 

reporting agencies and creditors. 

Another commenter said that the CFPB 

should additionally develop 

mechanisms for identifying and tracking 

when loan disbursements or payments 

from other general purpose lending 

products are used to pay for medical 

expenses. A different commenter 

suggested that the CFPB require 

creditors to expand their categorization 

system to flag medical expenses at the 

point of transaction or through 

subsequent verification processes. The 

commenter stated that a new merchant 

code could be created to flag healthcare 

provider payments or existing medical 


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112 79 FR 51682, 51690 (June 18, 2024). 

merchant codes would be flagged as part 

of a broader medical expense category. 

In contrast, commenters supporting 

the current scope of the proposed 

medical debt information definition 

stated that it is not feasible to 

implement an expansion of the medical 

debt information definition and 

interpretation of medical information 

under the FCRA to include products 

from third-party lenders. Specifically, 

the commenters stated third-party 

lenders like credit card issuers or home 

equity lenders would need to be able to 

identify medical charges or expenses 

and recalculate fields such as the 

consumer’s current balance, credit limit, 

amount past due, and actual payment 

amount. One commenter also stated 

that, unlike credit card issuers who may 

be able to identify which merchant a 

consumer has shopped with, banks that 

offer unsecured credit generally do not 

know how a consumer spends loan 

proceeds and if any of the loan was used 

to pay for medical expenses. A couple 

of commenters stated that even if a 

third-party lender or creditor were able 

to identify such charges using merchant 

category codes or some other 

information, it would need to maintain 

two sets of records, one with medical 

debt information and one without, 

which may lead to consumer confusion 

and other operational risks. 

Several commenters asked that if the 

CFPB does not include debts owed to 

third-party lenders or creditors such as 

credit card issuers within the scope of 

the final rule, that the CFPB continue to 

evaluate the impacts of such debt, such 

as for specific populations like family 

caregivers and persons in their care who 

may not understand the scope of the 

CFPB’s final rule, and to ascertain the 

impact of the final rule. Other 

commenters asked the CFPB to actively 

regulate and implement consumer 

protections related to medical lending 

products. 

Civil Judgments 

The CFPB also received several 

comments about its interpretation of 

FCRA section 603(i) that medical debt 

information includes civil judgments 

arising from medical debt collection 

actions, where the debt is directly owed 

to a health care provider, or to their 

agent or assignee. One commenter 

supported the CFPB’s proposed 

approach, stating that the CFPB’s 

interpretation is important considering 

that there are credit reporting agencies 

that specialize in providing consumer 

reports consisting of public records 

information, including about civil 

judgments. This commenter 

recommended that the CFPB include its 

interpretation about civil judgments in 

the final regulatory text or in official 

commentary. A couple of commenters 

opposed the CFPB’s interpretation about 

civil judgments. The commenters 

generally stated that it is not apparent 

from public record information whether 

a debt underlying a civil judgment is 

owed or was once owed directly to a 

health care provider for the provision of 

health care, particularly if the legal 

action was brought by a debt buyer 

whose name does not reference health 

care. In such cases, the commenters 

stated creditors would need to engage in 

burdensome individualized 

investigations to determine if a civil 

judgment is medical debt information. 

The commenters suggested that the 

CFPB revise its interpretation so that 

information about a civil judgment 

arising from a medical debt collection 

action is not considered medical 

information under the FCRA. In the 

alternative, one of the commenters 

suggested that the CFPB revise its 

interpretation of what constitutes 

medical information about a debt, so 

that it includes, other than the name of 

the judgment creditor, publicly 

available information that the civil 

judgment arises from a debt collection 

action as to a medical debt directly 

owed to a health care provider or to 

such person’s assignee (as opposed to 

debt buyer, as referenced in the CFPB’s 

NPRM). 

This commenter also stated that the 

CFPB’s discussion of its preliminary 

interpretation in the NPRM was 

inconsistent with its proposed 

definition for medical debt information. 

According to the commenter, while the 

proposed definition is clear that the 

debt at issue must be owed to health 

care provider or to their agent or 

assignee, in the NPRM the CFPB stated 

that medical information in the form of 

a civil judgment arising from a debt 

collection action as to a medical debt 

‘‘directly owed to a health care provider 

or debt buyer’’ would be considered 

information about a debt that is medical 

information under FCRA section 

603(i).112 The commenter stated that 

this statement in the preamble of the 

NPRM could be read as meaning that 

the CFPB’s proposal includes medical 

debt owed to a debt buyer even if the 

debt had not been originally owed to a 

health care provider. 

Credit Scores 

Several commenters generally 

opposing the CFPB’s proposed rule also 

disagreed that credit scores that have 

weighed medical debt information 

should be medical debt information 

under the CFPB’s preliminary 

interpretation. One commenter stated 

that the final rule should provide that a 

creditor that considers a credit score 

that could have weighed medical debt 

information does not violate the creditor 

prohibition. Another commenter, a 

financial institution, stated that credit 

scores are essential for lenders to 

determine a consumer’s 

creditworthiness. The commenter 

argued that removing medical debt 

information from the data used to 

calculate credit scores would lead to the 

inflation of those scores, affect lenders’ 

ability to accurately make credit risk 

assessments, and lead to loan defaults. 

The commenter stated that CFPB should 

consider establishing a safe harbor for 

financial institutions that inadvertently 

rely on a credit score that weighed 

medical debt information, because a 

lender would have difficulty 

recalculating a credit score due to the 

proprietary nature of the credit score 

algorithms used by consumer reporting 

agencies. 

Final Rule—Owes or Owed to a Health 

Care Provider 

For the reasons set forth herein, the 

CFPB is finalizing its interpretation as 

set forth in the proposed rule that for 

information about a consumer’s debt to 

be ‘‘medical information’’ under FCRA 

section 603(i), the information must 

relate to a debt the consumer owes, or 

at one time owed, directly to a health 

care provider or to the health care 

provider’s agent or assignee for the 

provision of the health care underlying 

the payment obligation. The CFPB’s 

interpretation includes medical 

information in the form of a civil 

judgment arising from a debt collection 

action as to a medical debt directly 

owed to a health care provider or their 

assignee (i.e., a debt buyer), whether 

provided on a consumer report, by the 

consumer on a credit application, or if 

the creditor learns of the civil judgment 

through other means; a credit score that 

had weighed medical debt information; 

and debts arising from medical care that 

is elective, or otherwise not medically 

necessary (e.g., some cosmetic 

surgeries). 

As discussed later in this part with 

regard to the definition of medical debt 

information under proposed and final 

§ 1022.3(j), the CFPB also finalizes its 

approach that its interpretation includes 

medical debt that has been sold or 

resold to a debt buyer—who has become 

the health provider’s assignee for the 

debt, because the payment obligation 

that was sold was created by a health 

care provider and at one time was owed 


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3290 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

113See 15 U.S.C. 1681c(a)(6), 1681s–2(a)(9). 

114See, e.g., Visa, Visa Merchant Data Standards 

Manual—Visa Supplemental Requirements (Apr. 

2023), https://usa.visa.com/content/dam/VCOM/ 

download/merchants/visa-merchant-datastandards-manual.pdf; Mastercard, Quick 

Reference Booklet—Merchant Edition (Apr. 16, 

2024), https://www.mastercard.us/content/dam/ 

public/mastercardcom/na/global-site/documents/ 

quick-reference-booklet-merchant.pdf. 

115With these accounts or arrangements, 

consumers can use their cards to pay for certain 

medical care expenses that are deemed qualified 

under guidelines set by the Internal Revenue 

Service (IRS). See Consumer Fin. Prot. Bureau, 

What is a flexible spending account (FSA) card or 

health savings account card (HSA)?, https://

www.consumerfinance.gov/ask-cfpb/what-is-aflexible-spending-account-fsa-card-health-savingsaccount-card-hsa-en-417/ (last reviewed Sept. 6, 

2024); Ryan J. Rosso, Cong. Rsch. Serv., R45277, 

Health Savings Accounts (HSAs) (2022), https://

crsreports.congress.gov/product/pdf/R/R45277. See 

also Ryan J. Rosso, Cong. Rsch. Serv., R46782, A 

Comparison of Tax-Advantaged Accounts for 

Health Care Expenses 5 (2021) (explaining qualified 

medical expenses under the Internal Revenue Code, 

26 U.S.C. 213(d)), https://crsreports.congress.gov/ 

product/pdf/R/R46782. 

116See, e.g., CareCredit, Ways to use your health 

and wellness credit card, https://

www.carecredit.com/procedures/ (listing categories 

of procedures a CareCredit medical credit card can 

be used for) (last visited Nov. 15, 2024). 

117See, e.g., Internal Revenue Serv., Notice 2007– 

2 (addressing the use of debit cards for medical 

expense reimbursements at merchants with nonhealth care related MCCs), https://www.irs.gov/pub/ 

irs-drop/n-07-02.pdf and Notice 2006–69 Debit 

cards used to reimburse participants in self-insured 

medical reimbursement plans and dependent care 

assistance programs (describing inventory 

information approval system requirements), https:// 

www.irs.gov/pub/irs-drop/n-06-69.pdf (both last 

visited Dec. 5, 2024). 

to the health care provider—as well as 

medical debt that has been assigned to 

a third-party debt collector, who is 

acting as an agent on behalf of the 

health care provider or debt buyer to 

whom the debt is owed. The CFPB also 

addresses comments regarding the 

CFPB’s approach as to medical 

information about debts arising from 

elective versus non-elective care with 

the other comments about the CFPB’s 

proposed medical debt information 

definition. 

Third-Party Lenders 

FCRA section 603(i) defines ‘‘medical 

information’’ as ‘‘[i]nformation or data, 

whether oral or recorded, in any form or 

medium, created by or derived from a 

health care provider or the consumer’’ 

that relates to, among other things, 

‘‘[t]he payment for the provision of 

health care to an individual’’ (emphasis 

added). As set forth in its proposal, the 

CFPB believes that it is consistent with 

the text of FCRA section 603(i) to 

interpret the statute’s use of these two 

phrases to mean that for information on 

a debt to be medical information under 

the FCRA, the information must relate 

to a debt arising from a payment 

obligation that the consumer owes (or at 

one time owed) directly to a health care 

provider for the provision of the health 

care underlying the payment obligation. 

The CFPB also finds that the manner 

in which the final rule implements 

FCRA section 603(i) is appropriate at 

this time given operational difficulties 

for information furnishers, creditors, 

and consumer reporting agencies in 

distinguishing between third-party loan 

obligations and disbursements that pay 

for medical expenses and those that do 

not. To implement the rule, entities 

furnishing information on consumer 

debts, consumer reporting agencies 

receiving such information and 

providing consumer reports to creditors, 

and creditors receiving information 

about the consumer’s debt obligations 

must be able to identify the specific 

information subject to the rule’s 

requirements. Logically, a debt owed 

directly to a health care provider for the 

provision of health care to an individual 

is generally understood by consumers 

and the health care providers (and their 

agents and assignees) that are furnishing 

information to consumer reporting 

agencies to be medical debt. And, 

because of medical information 

furnisher obligations under FCRA 

section 623(a)(9), information about 

such debts that is furnished by health 

care providers (or their agents or 

assignees) already is and can be easily 

labeled as medical information by 

consumer reporting agencies so that 

they may comply with their medical 

debt information disclosure obligations 

under final § 1022.38.113 The CFPB also 

notes that it did not receive any 

comments disagreeing that information 

about debts owed directly to a health 

care provider for the provision of health 

care to an individual is medical 

information under the statute, even if 

some commenters urged the CFPB to 

expand its interpretation. 

In contrast, currently medical 

information is generally not easily 

identifiable when a consumer uses a 

credit card or the proceeds of a loan 

from a third-party lender to pay, for 

example, a medical bill. When a 

consumer owes a debt to a third-party 

lender, the amount of that debt may 

consist of a mix of both medical and 

non-medical debt. 

In the context of credit and debit 

cards, the CFPB does not believe that 

the problem of identifying medical debt 

can be resolved with existing MCCs 114

used by credit card issuers to categorize 

businesses by the type of services or 

goods the business provides or existing 

systems in place for health-related taxadvantaged accounts or arrangements, 

including health savings accounts 

(HSAs), flexible spending accounts 

(FSAs), and health reimbursement 

accounts (HRAs) pursuant to guidelines 

set by the Internal Revenue Service 

(IRS).115 With respect to MCCs, some 

commenters suggested that the CFPB 

simply require credit card issuers to 

exclude negative information about 

debts from merchants coded as some 

sort of health care provider under the 

MCCs when furnishing information to 

consumer reporting agencies. However, 

it is not clear that all credit card 

transactions at businesses that could 

reasonably be said to provide health 

care services, products, or devices 

would be related to a ‘‘payment for the 

provision of health care’’ as required for 

medical information under FCRA 

section 603(i). For example, as raised by 

other commenters, in addition to selling 

prescription medicine, a pharmacy may 

also sell household or grocery items. 

Medical credit cards are also currently 

used to pay for some expenses that are 

not clearly medical in nature, such as 

for funeral services.116

Similarly, one commenter suggested 

that technology similar to the inventory 

information approval system used for 

FSA cards could be adapted to identify 

specific medical expenses charged to 

credit or debit cards. But not all 

businesses participate in inventory 

approval systems and/or accept FSA 

and HSA cards, even if some system 

was developed to specifically identify 

expenses that would be medical 

information under FCRA section 603(i), 

as opposed to identification as medical 

expenses under other law. Furthermore, 

this system is complex; the IRS has 

issued detailed guidance with regard to 

the substantiation of eligible medical 

care expenses paid for with such cards, 

even at certain businesses with nonhealth care related MCCs if the business 

meets conditions such as participation 

in an inventory information approval 

system.117

Some commenters suggested that the 

CFPB itself develop or require industry 

to develop and use transaction-level 

classification codes to identify what 

would be medical information at the 

transactional level under FCRA section 

603(i). However, such work or any such 

requirements would require further 

input and consultation with industry 

experts and impose more burden on 

creditors, information furnishers, and 

consumer reporting agencies than have 

been contemplated for this rulemaking. 

As a result, the CFPB declines to impose 

such a requirement or itself develop 

such rules at this time. 

Identification of medical debt 

information could also be problematic 


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118See, e.g., Consumer Fin. Prot. Bureau, Medical 

Credit Cards and Financing Plans (May 2023), 

https://files.consumerfinance.gov/f/documents/ 

cfpb_medical-credit-cards-and-financing-plans_

2023-05.pdf; Lorelei Salas, Consumer Fin. Prot. 

Bureau, Ensuring consumers aren’t pushed into 

medical payment products (June 18, 2024), https:// 

www.consumerfinance.gov/about-us/blog/ensuringconsumers-arent-pushed-into-medical-paymentproducts/. 

119Cf. 15 U.S.C. 1681c(a)(6) (the name of a 

medical information furnisher—i.e., a health care 

provider or its agent or assignee—that has notified 

the consumer reporting agency of its status must be 

coded or restricted on a consumer report in a 

manner that would not identify, or provide 

information sufficient to infer, the specific provider 

or the nature of the services, products, or devices). 

in the case of third-party loans. For 

example, a home equity lender would 

not know whether and how much of the 

proceeds of the loan were used to pay 

for a medical expense and thus whether 

it should furnish the loan to consumer 

reporting agencies as being for medical 

purposes. As a result, the CFPB also 

declines to impose such a requirement 

or itself develop such rules at this time. 

The CFPB appreciates, as raised by 

many commenters, that many 

Americans use credit products offered 

by third-party lenders to pay their 

medical bills. However, as described in 

more detail in part VII, CFPA Section 

1022(b) Analysis, the CFPB has also 

determined that there is not yet 

substantial evidence that the inclusion 

of information related to medical debt 

owed to third-party lenders on 

consumer reports, or its use in 

underwriting, leads to consumer harm. 

While including information about 

medical debts owed to third-party 

lenders might have additional benefits 

for consumers, the CFPB has 

determined that such information is 

beyond the scope of this rulemaking and 

for the reasons stated above, the CFPB 

declines to change its approach at this 

time. 

One commenter stated that the CFPB’s 

approach is arbitrary and capricious, 

because it would generally provide that 

information about a debt owed directly 

to a health care provider, or its agent or 

assignee, for the payment of the 

provider’s provision of health care is 

medical information about a debt under 

the FCRA and the CFPB’s proposed rule, 

whereas a debt owed to a third-party 

lender would not be, even though the 

consumer (and their creditworthiness) is 

the same in either instance. However, as 

stated above, the CFPB believes that its 

approach aligns with the definition of 

medical information under FCRA 

section 603(i). Further, as noted, the 

operational difficulties and likely 

compliance burdens further justify its 

approach. 

The CFPB also disagrees with the 

commenter’s statement that the CFPB’s 

interpretation was an arbitrary and 

capricious deviation from the 

predecessor Agencies’ interpretation of 

the FCRA in the 2005 interim final rule 

implementing section 411 of the FACT 

Act. The language cited by the 

commenter from the 2005 interim final 

rule relates to the Agencies’ 

interpretation of the general 

applicability of the creditor prohibition 

and the exceptions to the creditor 

prohibition. The CFPB agrees with the 

Agencies’ statements in the 2005 

interim final rule that the creditor 

prohibition and any exceptions to the 

prohibition are applicable to all 

creditors. Accordingly, the CFPB did 

not propose to, and the final rule does 

not, distinguish between creditor types 

in regulating creditors’ ability to obtain 

or use medical information for the 

purpose of making credit eligibility 

determinations. The CFPB’s 

interpretation pertains to the issue of 

what types of information fall under the 

definition of medical information under 

FCRA section 603(i), which is entirely 

distinct from the issue considered by 

the Agencies in 2005 of whether all 

creditors should be subject to the 

creditor prohibition and any exceptions 

to the prohibition under FCRA section 

604(g)(2) and (g)(5). 

With regard to some commenters’ 

requests that the CFPB evaluate the 

impacts of its final rule and examine or 

engage in rulemaking as to medical 

lending products, the CFPB has long 

been engaged in outreach and research 

related to medical debt information in 

the consumer reporting ecosystem, 

including on issues such as medical 

lending products.118 The CFPB will 

continue to observe the market and may 

consider issuing other guidance or rules 

if it later determines that doing so is 

consistent with its authority under the 

FCRA. 

Civil Judgments 

As explained above, the CFPB 

interprets FCRA section 603(i) to mean 

that medical information about a 

consumer’s debt must relate to a debt 

the consumer owes, or at one time owed 

(for example, in the case of paid medical 

debt), directly to a health care provider 

or to the health care provider’s agent or 

assignee. Generally, the CFPB’s 

approach applies regardless of the form 

of the medical information pertaining to 

a consumer’s debt owed to a health care 

provider, or their agent or assignee. A 

civil judgment on a medical debt is 

information about a medical debt that 

has been reduced to judgment. Thus, 

under the CFPB’s interpretation, 

medical information about a consumer’s 

debts includes medical information in 

the form of a civil judgment arising from 

a debt collection action as to a medical 

debt directly owed to a health care 

provider or to their assignee (i.e., a debt 

buyer), whether provided on a 

consumer report or by the consumer on 

a credit application. It also includes 

information about a civil judgment the 

creditor learned of through other means. 

The CFPB declines to revise its 

interpretation to exclude civil 

judgments as suggested by several 

commenters. 

The CFPB appreciates the comment it 

received supporting its approach to civil 

judgments. However, the CFPB declines 

to explicitly address civil judgments in 

the regulation or in official commentary 

as suggested by the commenter. The 

CFPB believes that its approach to civil 

judgments is a straightforward 

application of its interpretation and that 

it is not necessary to include it in 

regulatory text or in official 

commentary. 

The CFPB declines to revise its 

interpretation in the manner suggested 

by one commenter. The commenter 

suggested that the CFPB clarify that as 

to civil judgments, medical information 

would include publicly available 

information—other than the name of the 

judgment creditor—that the judgment 

was related to a debt collection action 

arising from a debt directly owed to a 

health care provider or their assignee, 

which the commenter stated would 

avoid having creditors engage in 

individualized investigations to 

determine whether a civil judgment is 

medical information about a medical 

debt. The CFPB does not believe that the 

commenter’s suggested clarification 

aligns with the text of the statute. The 

definition of medical information under 

FCRA section 603(i) does not imply that 

only publicly available information can 

be medical information. It also does not 

provide a basis for stating that the name 

of the entity to whom the consumer 

owes a debt is not medical 

information.119

The CFPB appreciates, as raised by 

the commenter and others, that a 

creditor may need to engage in followup inquiries to determine if a civil 

judgment is medical information about 

a debt under the CFPB’s interpretation 

of FCRA section 603(i) and under final 

§ 1022.3(j). The CFPB reminds creditors 

that the example in final § 1022.30(e)(6) 

explains how creditors may use medical 

information provided by the consumer 

in compliance with TILA and 

Regulation Z, as set forth in 

§ 1022.30(e)(1)(ii), for purposes of 

compliance with the ability-to-repay 


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120As discussed in part XI, the CFPB intends that, 

if the consumer reporting agency prohibition on 

furnishing medical debt information finalized in 

§ 1022.38 (or any provision or application of that 

section) is stayed or determined to be invalid, the 

amendments to § 1022.30 are severable and shall 

continue in effect. Should that occur, consumer 

reporting agencies would not be prohibited from 

furnishing medical debt information to creditors for 

use in underwriting, and accordingly their credit 

scores could also reflect medical debt information. 

In such a circumstance, the CFPB could revisit the 

question of a safe harbor for creditors that 

inadvertently use such scores. 

rule under § 1026.43(c) for closed-end 

mortgages, the repayment ability rule 

under § 1026.34(a)(4) for open-end, 

high-cost mortgages, and the ability-topay rule under § 1026.51(a) for openend (not home-secured) credit card 

accounts. 

The commenter also suggested that 

the CFPB’s statements in the preamble 

about its approach to civil judgments 

were inconsistent, and could be read to 

mean that the CFPB intends to treat as 

medical information civil judgments 

arising from a debt collection action 

brought by a debt buyer, even if the 

underlying debt was not originally owed 

to a health care provider. The CFPB 

clarifies that under its interpretation of 

FCRA section 603(i), medical 

information about a consumer’s debts 

includes medical information in the 

form of a civil judgment arising from a 

debt collection action as to a medical 

debt directly owed to a health care 

provider or to their assignee (i.e., a debt 

buyer). 

Credit Scores 

The CFPB declines to adopt 

suggestions from some commenters that 

the CFPB provide that credit scores that 

weighed information about medical debt 

should not be subject to the creditor 

prohibition under the CFPB’s final rule 

or that the CFPB establish a safe harbor 

for creditors that inadvertently use such 

scores. The CFPB’s approach to credit 

scores is a logical extension of its 

interpretation of FCRA section 603(i) as 

to medical debt information (and, 

correspondingly, the definition for 

medical debt information under 

§ 1022.3(j)). As explained above, the 

removal of the existing financial 

information exception in § 1022.30(d) as 

to medical debt information in the final 

rule means that the creditor prohibition 

under FCRA section 604(g)(2) and 

§ 1022.30(b) will apply to generally 

prohibit creditors from obtaining or 

using such information for credit 

eligibility determinations. It would be a 

paradoxical effect if creditors were then 

permitted to use a credit score that 

weighed such information in making 

those same credit eligibility 

determinations. 

The CFPB also does not believe that 

a safe harbor for a creditor’s inadvertent 

use of a credit score that weighed 

medical debt information is necessary. 

Under final § 1022.38, consumer 

reporting agencies will generally be 

prohibited from furnishing consumer 

reports reflecting medical debt 

information to creditors, and any credit 

score based on the information in a 

consumer’s file generally would not 

weigh medical debt information after 

the effective date of the final rule. 

Accordingly, no safe harbor is 

required.120

Proposed Definition—Medical Debt 

Information (§ 1022.3(j)) 

In consideration of its preliminary 

interpretation of FCRA section 603(i), 

the CFPB also proposed adding a 

definition for medical debt information 

at § 1022.3(j) to facilitate compliance 

with various aspects of the proposed 

rule. Under proposed § 1022.3(j), 

medical debt information would have 

been defined as medical information 

that pertains to a debt owed by a 

consumer to a person whose primary 

business is providing medical services, 

products, or devices (i.e., a health care 

provider), or to the person’s agent or 

assignee, for the provision of such 

medical services, products, or devices. 

The definition would have also clarified 

that medical debt information includes, 

but is not limited to, medical bills that 

are not past due or that have been paid. 

The CFPB explained that it intended 

for the definition of medical debt 

information to align with the scope of 

information about medical debt that 

creditors would be prohibited from 

considering if the financial information 

exception is removed. 

The proposed definition would have 

also clarified that the term includes 

information about a debt owed to a 

health care provider’s agent or assignee. 

The CFPB explained that it intended, by 

including agents and assignees in the 

medical debt information definition, to 

include medical debt that has been 

purchased by a debt buyer or that is 

being collected by a third-party debt 

collector. The CFPB sought comment on 

whether this aspect of the proposed 

definition should be modified, such as 

to ensure it accommodated 

circumstances where the medical debt 

has been sold and then resold, as well 

as on its proposed definition for medical 

debt information generally. 

The CFPB also sought comment on 

whether the proposed definition 

provided the clarity needed for 

consumers, creditors, and consumer 

reporting agencies to implement the 

proposed rule if finalized. 

Comments—Proposed Definition, 

Medical Debt Information (§ 1022.3(j)) 

In addition to comments about 

whether the CFPB’s interpretation of 

FCRA section 603(i) as to medical debt 

information and the CFPB’s proposed 

definition at § 1022.3(j) should be 

revised to include information about 

debts paid for with third-party lender or 

creditor products, civil judgments, and 

credit scores (discussed above), the 

CFPB also received comments about 

other aspects of the proposed medical 

debt information definition. Such 

comments included those about the 

types of expenses and providers 

included under the definition (i.e., 

because they are ‘‘medical’’ or ‘‘health 

care’’-related in nature), suggestions for 

different treatment of debt arising from 

elective versus non-elective care, and 

other general comments about the 

proposed inclusion of information about 

debts owed to agents and assignees of 

medical providers. These comments, 

and others, are described below. 

General Comments and Payment Status 

The CFPB received one comment 

explicitly supporting the inclusion of a 

proposed definition for medical debt 

information, which the commenter 

stated would facilitate compliance with 

and enforcement of the final rule. 

Another commenter stated that the 

CFPB’s proposed medical debt 

definition was insufficiently clear as to 

what constitutes medical debt, but did 

not provide any explanation or 

illustrative examples. 

A couple of commenters expressed 

support for the CFPB’s proposal to 

expressly provide that medical debt 

information includes, but is not limited 

to, information involving medical bills 

that have already been paid or that are 

not yet past due. One such commenter 

suggested that the CFPB include an 

example about a past-due medical bill to 

clarify that medical debt information 

also includes information about pastdue medical debt. 

Agents and Assignees 

Several commenters agreed with the 

CFPB’s proposal that generally 

information about a debt owed to a 

health care provider’s agent or assignee 

should be considered medical debt 

information, as well as with the CFPB’s 

statements in the preamble that such 

agents and assignees would include 

third-party debt collectors and debt 

buyers. One such commenter stated that 

the CFPB should explicitly reference 

debt buyers and debt collectors in either 

the text of the definition or in official 


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commentary to the final rule to facilitate 

the CFPB’s intent. 

Health Care Providers 

The CFPB received a few comments 

about whether certain persons would be 

considered a ‘‘person whose primary 

business is providing medical services, 

products, or devices’’ (i.e., a health care 

provider) under the proposed medical 

debt information definition. 

One commenter stated that the 

proposal was not clear as to whether 

unlicensed or unregulated providers of 

complementary and alternative 

medicine would be considered covered 

health care providers under the 

definition. The commenter stated its 

belief that medical debt information 

under the rule should be limited to 

information about debts owed to only 

regulated or licensed persons who 

provide medical services, products, or 

devices. The commenter also suggested 

that, accordingly, the text of the 

proposed definition be modified to refer 

to a ‘‘health care provider’’ in place of 

a ‘‘person’’ and to explicitly state that 

the term refers to a provider of services 

or a provider of medical or health 

services as defined under the statute 

governing the Medicare program, at 42 

U.S.C. 1395x(u) and 1395x(s), 

respectively. 

Another commenter asked the CFPB 

to clarify whether a person who, in 

addition to ‘‘providing medical services, 

products, and devices,’’ also provides a 

significant amount of non-medical 

services, products, and devices would 

be considered to be a health care 

provider under the CFPB’s proposed 

medical debt information definition. 

One commenter generally supporting 

the CFPB’s proposal expressed concern 

that the medical debt information 

definition may not include debts owed 

to hospitals or health care facilities. The 

commenter explained that consumers 

often receive bills not just from 

providers who provide a health care 

service like radiological services, but 

also a bill from the facility in the form 

of a facility fee. The commenter stated 

that limiting the definition of medical 

debt information debts owed to a 

person, or a person’s agent or assignee, 

may exclude such facility fees charged 

by hospitals or health care facilities. To 

avoid this outcome, the commenter 

suggested that the CFPB include 

hospitals and health care facilities in the 

medical debt information definition. 

With regard to hospitals, one 

commenter generally supporting the 

proposed rule stated its view that 

hospital bills are particularly prone to 

error, and as a result also expressed 

concern that existing § 1022.30(c)(3)(i)’s 

example refers to information about a 

hospital bill that a creditor ‘‘receives’’ 

(which the commenter also said was 

ambiguous). This commenter also 

suggested that the CFPB require 

creditors to include a disclaimer on 

credit applications to inform consumers 

that it is not necessary to include 

medical debt information and if the 

consumer chooses to disclose such 

information, it will be used by the 

creditor to determine the consumer’s 

creditworthiness. 

Medical Services, Products, and Devices 

The CFPB also received comments 

about whether specific types of services, 

products, or devices should be 

considered ‘‘medical services, products, 

or devices’’ under the proposed medical 

debt information definition. Several 

commenters stated that the CFPB’s 

proposed definition was unclear in this 

regard and as a result may lead to 

confusion and add to the compliance 

and operational burden for regulated 

entities and small businesses. 

Several commenters stated that 

information about debt arising from 

dental care should be included in the 

scope of the medical debt information 

definition. One of the commenters 

emphasized that dental debt can present 

a burden for consumers, citing reports 

that many Americans report that dental 

bills are the cause of some of their 

medical debt and that there may be a 

disproportionate impact on Black and 

Latino communities who have a higher 

incidence of periodontal disease. The 

commenter also noted that many dental 

costs may not be covered by health 

insurance. Another commenter stated 

that the CFPB should explicitly note in 

the final rule and provide official staff 

commentary stating that medical debt 

information includes information about 

dental debt. The commenter suggested 

that the CFPB revise its proposed 

medical debt information definition to 

change references to ‘‘medical services, 

products, or devices’’ to ‘‘health care 

services, products, or devices’’ to 

capture information about dental debt. 

Other commenters questioned generally 

if dental debt was within the scope of 

the CFPB’s proposed definition. 

Several commenters raised questions 

about whether debt related to other 

specific types of services, products, or 

devices were included in the CFPB’s 

proposed medical debt information 

definition. For example, the 

commenters asked for clarity about 

whether veterinarian services, eye care 

or vision services, counseling, therapy, 

over-the-counter medication, bandages, 

dermatological services, cosmetic 

procedures, pharmacy expenses, 

primary and specialty care, lab and 

diagnostic expenses, other outpatient 

care, and massages were covered under 

the definition. 

Elective Medical Care 

Some commenters suggested that the 

CFPB’s final rule should distinguish 

between information about medical debt 

that arises from elective care versus 

non-elective (or emergency) care. 

Generally, these commenters stated that 

elective medical procedures are 

typically planned and discretionary, 

unlike non-elective medical debt which 

arise from unexpected or unavoidable 

circumstances. Specifically, the 

commenters stated that elective medical 

care reflect a consumer’s conscious 

financial decision and thus should be 

included in creditors’ determination of 

a consumers’ ability to repay a future 

loan. The commenters suggested that by 

categorizing medical debt in this way, 

the CFPB would be able to protect 

consumers from the adverse effects of 

medical debt and also allow lenders to 

have access to necessary information for 

making informed credit decisions. One 

commenter similarly suggested that the 

CFPB’s final medical debt information 

definition not include information about 

debt arising from elective procedures, 

unless the elective procedure was 

needed as the result of an injury or 

illness. Another commenter suggested 

that the CFPB distinguish between nonelective care and other types of health 

care-related debt, including daily goods 

and services. A few commenters 

suggested that the CFPB’s rule should 

not apply to elective and cosmetic 

surgery and should be limited to 

emergency medical treatment only. 

One commenter stated that the CFPB’s 

approach may lead to unequal 

treatment. The commenter, who 

generally argued that the CFPB’s 

proposal would cause distortions in the 

credit market, stated that consumers 

with recurring medical expenses would 

benefit less from the rule, because they 

continually will have new medical 

debts. 

One commenter, who also generally 

supported the CFPB’s proposed rule and 

urged the CFPB to include debt paid for 

with third-party medical payment 

products in the final medical debt 

definition, suggested that CFPB restrict 

reporting of debt paid for with thirdparty medical payment products unless 

the medical provider and the consumer 

each attest to the elective or nonelective nature of the medical service, to 

allow the medical and financial 

industries to report debt related to only 

elective medical care to a consumer 

reporting agency, but did not make a 


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similar suggestion for medical debts 

owed directly to a health care provider. 

Final Rule—Definition, Medical Debt 

Information (§ 1022.3(j)) 

For the reasons stated herein, the 

CFPB finalizes its definition as 

proposed for medical debt information 

at § 1022.3(j). Under final § 1022.3(j), 

medical debt information is defined as 

medical information that pertains to a 

debt owed by a consumer to a person 

whose primary business is providing 

medical services, products, or devices 

(also referred to herein as a health care 

provider), or to the person’s agent or 

assignee, for the provision of such 

medical services, products, or devices. 

The definition also provides that 

medical debt information includes, but 

is not limited to, medical bills that are 

not past due or that have been paid. 

Generally, under the final definition, 

for information about a debt to be 

medical debt information, it must meet 

two requirements. First, the debt must 

be directly owed to a person whose 

primary business is providing medical 

services, products, or devices, or their 

agent or assignee. Second, the debt must 

be for the provision of the medical 

services, products, or devices by the 

health care provider. 

The final definition is adapted from 

FCRA section 623(a)(9), which defines 

the term ‘‘medical information 

furnisher’’ as a person whose primary 

business is providing medical services, 

products, or devices, or the person’s 

agent or assignee, who furnishes 

information to a consumer reporting 

agency on a consumer. The CFPB 

believes that aligning the definition of 

‘‘medical debt information’’ with the 

FCRA definition for ‘‘medical 

information furnisher’’ will provide a 

familiar standard under the FCRA that 

will facilitate compliance with the 

proposed rule. For consumer reporting 

agencies specifically, the CFPB 

anticipates that the self-identification of 

medical information furnishers under 

FCRA section 623(a)(9) will assist 

consumer reporting agencies in 

identifying and excluding medical debt 

information from consumer reports 

provided to creditors, as required under 

final § 1022.38. 

The CFPB intends for the final 

medical debt information definition to 

align with the CFPB’s interpretation of 

FCRA section 603(i) as to medical 

information and thus correspond with 

the scope of the medical information 

about a consumer’s medical debts that a 

creditor generally may not obtain or use 

under final § 1022.30, as revised to 

remove the financial information 

exception at § 1022.30(d). The medical 

debt information definition also 

establishes what medical information a 

consumer reporting agency must 

consider in complying with final 

§ 1022.38. 

General Comments and Payment Status 

The CFPB agrees with the commenter 

stating that including a medical debt 

definition in the final rule will facilitate 

compliance and enforcement of the final 

rule. The CFPB also appreciates the 

comments supporting the proposed 

definition’s clarification that medical 

debt information includes information 

about medical bills that are not past due 

or that have been paid. The CFPB 

disagrees, however, with one 

commenter’s suggestion that the CFPB 

include a specific example in the text of 

the regulation as to a past-due medical 

bill. The CFPB believes that it is clear 

from the definition and use of the term 

‘‘debt’’ that medical information about a 

past-due medical bill is medical debt 

information under the rule. 

Agents and Assignees 

The CFPB appreciates the comments 

it received supporting its interpretation 

that agents and assignees of a health 

care provider under the proposed 

medical debt information definition 

includes third-party debt collectors and 

debt buyers. The CFPB is finalizing this 

approach for the proposed definition 

(which the CFPB intends to align with 

the scope of medical debt information 

under its interpretation of FCRA section 

603(i)). The CFPB declines to 

implement a suggestion from one 

commenter that it explicitly reference 

debt buyer and third-party debt 

collectors in the text of the regulation. 

The CFPB believes the medical debt 

information definition is sufficiently 

clear and finalizes § 1022.3(j) as 

proposed. 

Health Care Providers 

Under the CFPB’s proposed and final 

definition at § 1022.3(j), for information 

about a consumer’s debt to be medical 

debt information, the debt must be owed 

by the consumer to ‘‘a person whose 

primary business is providing medical 

services, products, or devices.’’ For the 

purposes of this document, the CFPB 

refers to such a person as a health care 

provider. As noted above, this aspect of 

the final medical debt information 

definition at § 1022.3(j) is adapted from 

the definition of ‘‘medical information 

furnisher’’ in FCRA section 623(a)(9) 

and the CFPB anticipates it will provide 

a familiar standard that will facilitate 

compliance with the final rule. 

Some commenters asked for 

clarification as to whether specific types 

of providers, such as providers of 

complementary and alternative 

medicine or pharmacies, would be 

health providers under the rule. The 

CFPB notes neither the definition of 

medical information in FCRA section 

603(i) nor the definition of medical 

information furnisher in FCRA section 

623(a)(9) states that only providers of 

certain kinds of health care are 

‘‘medical.’’ The CFPB likewise declines 

to do so for the final rule. Generally, the 

CFPB anticipates that whether a 

provider is a health care provider for the 

purposes of the final rule will depend 

on the specific facts and circumstances 

for each provider. The CFPB also 

anticipates that such determinations 

may be guided by whether such 

providers, as well as their agents and 

assignees, notify consumer reporting 

agencies of their status as medical 

information furnishers under FCRA 

section 623(a)(9). 

As to the comment seeking 

clarification about whether hospitals 

and health care facilities and facility 

fees they may charge would be covered 

under the CFPB’s rule, the CFPB 

believes the definition is sufficiently 

clear and as a result declines to revise 

the definition to reference hospitals and 

health care facilities as suggested by the 

commenter. However, while generally a 

determination as to whether a person is 

a health care provider under the final 

rule may depend on individual facts 

and circumstances, the CFPB believes 

that hospitals and health care facilities 

are plainly ‘‘person[s] whose primary 

business is providing medical services, 

products, or devices.’’ Further, the CFPB 

also believes that facility fees that may 

be charged in association with a 

consumer’s health care are clearly part 

of the ‘‘provision of such medical 

services, products, or devices’’ to a 

consumer and that information about a 

medical debt arising from such fees are 

medical debt information under the 

final rule, even if the specific medical 

professional providing care at, for 

example, a hospital sends a separate bill 

for the care provided. 

In response to one commenter 

expressing concerns about hospitals and 

requesting the CFPB require disclaimers 

on credit applications, the CFPB does 

not believe that any examples in 

§ 1022.30 should be revised to refer to 

something other than a hospital bill 

where currently used. The examples are 

meant to be illustrative and hospital 

bills are often a source of medical 

information, even if they contain errors. 

Further, the CFPB declines to require 

creditors to include a disclaimer 

informing consumers that they do not 

need to provide medical debt 


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121 15 U.S.C. 1681b(g)(5). 

122 70 FR 33958, 33966–67 (June 10, 2005); see 

also part III.B, Fair Credit Reporting Act. 

123 15 U.S.C. 1681b(g)(5). 

124Lunna Lopes et al., Kaiser Fam. Found., 

Health Care Debt in the U.S.: The Broad 

Consequences of Medical and Dental Bills (June 16, 

2022), https://www.kff.org/health-costs/report/kffContinued 

information on credit applications. Such 

a disclaimer would not be an accurate 

reflection of the proposed or final rule. 

Medical Services, Products, and Devices 

The CFPB disagrees with commenters 

stating that the proposed definition for 

medical debt information, which the 

CFPB is finalizing as proposed, is 

unclear. As noted earlier, neither the 

definition of medical information in 

FCRA section 603(i) nor the definition 

of medical information furnisher in 

FCRA section 623(a)(9) states that only 

certain types of health care or providers 

of such health care are ‘‘medical.’’ It 

also does not state that only certain 

types of services, products, or devices 

are ‘‘medical.’’ The CFPB accordingly 

declines to specify in the text of the 

definition or in official commentary, as 

urged by a commenter, that certain 

types of medical services, products, or 

devices are covered under the CFPB’s 

medical debt information definition or 

under the CFPB’s interpretation of 

FCRA section 603(i). As with health 

care providers, the CFPB anticipates 

that industry’s interpretation of the 

similar definition for medical 

information furnisher under FCRA 

section 623(a)(9) will provide a familiar 

standard that will facilitate compliance 

with the final rule. 

Generally, as long as both 

requirements of the definition are 

satisfied (i.e., that the debt is directly 

owed to a health care provider, or their 

agent or assignee, and it is for the 

provision of medical services, products, 

or devices), information about the debt 

at issue is considered medical debt 

information under the final rule. Thus, 

for example, the CFPB would anticipate 

that debt owed to an optometry or 

ophthalmology practice (or its agent or 

assignee) arising from its provision of 

eye care would be covered under the 

CFPB’s final rule, as well as a debt owed 

to a dental practice (or its agent or 

assignee) arising from its provision of 

dental care. Similarly, the CFPB would 

also anticipate that a debt owed to a 

health care provider or a supplier of 

durable medical equipment (or their 

agent or assignee) arising from the 

purchase of a wheelchair, or a debt 

owed to a supplier of orthotic and 

prosthetic devices (or its agent or 

assignee) arising from the purchase of a 

prosthetic limb, would generally also be 

covered under the final rule. However, 

a debt to a grocery store arising from 

bandages purchased there would not 

meet the requirements, because the 

primary business of the grocery store is 

not the provision of medical services, 

products, or devices. 

Elective Medical Care 

Some commenters urged the CFPB to 

distinguish and provide different 

treatment under the final rule for 

different types of medical debt, 

including as to debt arising from 

elective care versus non-elective care or 

emergency care. The CFPB understands 

that many elective procedures are 

treatment for serious illnesses and 

health conditions that are often 

unanticipated. In such circumstances, 

consumers still have limited ability to 

shop around or control the timing of 

costs. And, many of the factors 

regarding errors in medical billing and 

collections still apply to limit the value 

of information about such types of 

medical debt. Further, CFPB research 

discussed elsewhere in this preamble 

indicates generally that the use of 

medical debt information (including 

information about debts related to both 

elective and non-elective medical care) 

in credit eligibility determinations does 

not reduce the delinquency risk faced 

by creditors, and commenters have not 

cited any research establishing that debt 

related to elective medical care is more 

predictive of delinquency risk than debt 

related to non-elective medical care. As 

a result, after further consideration, the 

CFPB declines to provide different 

treatment for debt arising from elective 

care than from other types of medical 

debt under the final rule. 

The CFPB also disagrees with the 

commenter stating that a failure to 

distinguish between medical debt 

arising from elective care versus nonelective care would benefit consumers 

unequally because some consumers 

have recurring medical expenses that 

may lead to new debt. Under the final 

rule, treatment by creditors and 

consumer reporting agencies of medical 

debt will be the same, without regard to 

whether the debt is recurring. To the 

extent the commenter was expressing 

the general concern, also expressed by 

other commenters, that the rule would 

impact creditors’ ability to accurately 

assess consumers’ delinquency risk 

because they would have less 

information about consumers’ medical 

debts, the CFPB disagrees as discussed 

in part VII, CFPA Section 1022(b) 

Analysis. 

Determination that Medical Debt 

Information Is Not Necessary and 

Appropriate for Credit Eligibility 

Determinations 

Under FCRA section 604(g)(5), the 

CFPB (like the predecessor Agencies 

before it) has authority to permit an 

exception to the creditor prohibition 

that it determines to be necessary and 

appropriate, consistent with the intent 

of the creditor prohibition to restrict the 

use of medical information for 

inappropriate purposes.121

When the predecessor Agencies 

established the existing financial 

information exception at § 1022.30(d), it 

appears that the Agencies addressed 

specific comments on the parameters of 

their proposal for the financial 

information exception (which they 

substantially finalized as proposed) but 

did not provide evidence or analysis to 

support their determination.122

In the period since the predecessor 

Agencies enacted their rule, creditors 

have been able to obtain and use 

financial information relating to a 

consumer’s medical debts as a result of 

the financial information exception. 

However, and as the CFPB explained in 

its proposal, there has been a significant 

body of research and marketplace 

changes that have shed more light on 

the nature of medical debt and financial 

information available to creditors about 

medical debt. The CFPB stated that 

these developments provide a more 

nuanced picture that raises questions 

about creditors’ use of medical debt 

information in credit underwriting. 

In consideration of its stated points, 

the CFPB preliminarily determined that 

it is not ‘‘necessary and appropriate to 

protect legitimate operational, 

transactional, risk, consumer, and other 

needs’’ for creditors to consider 

sensitive financial information 

concerning consumers’ medical debt, 

nor is it consistent with the intent of the 

creditor prohibition to restrict the use of 

medical information for inappropriate 

purposes, as required for an exception 

under FCRA section 604(g)(5).123 The 

CFPB sought comment on its 

preliminary determination. 

In support of this preliminary 

conclusion, the CFPB cited a number of 

points. Comments addressing these 

points, and others, are discussed below, 

with references where they are also 

discussed in part VII, CFPA Section 

1022(b) Analysis, as part of the CFPB’s 

discussion of the potential benefits, 

costs, and impacts of the rule. 

First, the CFPB noted that recent 

research has demonstrated that unlike 

other types of debt, medical debt often 

results from an event such as an 

accident or sudden illness.124 In these 


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3296 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

health-care-debt-survey/ (results of national survey 

show that 7 in 10 adults with health care debt say 

that the bills that led to their debt were for a onetime or short-term medical expense). 

125See 45 CFR part 180 (Centers for Medicare & 

Medicaid Services Hospital Price Transparency 

rule). 

126See U.S. PIRG Educ. Fund, Post the Price: 

Hospital Price Transparency Could Save Patients 

Thousands (May 2024), https://publicinterest

network.org/wp-content/uploads/2024/05/Reuploaded-Revised-After-Release_-Cleveland-PriceTransparency-Report-.pdf. 

127See, e.g., Karen Pollitz & Kaye Pestaina, Kaiser 

Fam. Found., Could Consumer Assistance Be 

Helpful to People Facing Medical Debt? (July 14, 

2022), https://www.kff.org/policy-watch/couldconsumer-assistance-be-helpful-to-people-facingmedical-debt/ (reporting survey results that 43 

percent of all adults and 53 percent of adults with 

health care debt say they thought they received a 

medical or dental bill with an error). 

128See, e.g., Consumer Fin. Prot. Bureau, Medical 

Debt Burden in the United States, at 9–14 (Feb. 

2022), https://files.consumerfinance.gov/f/ 

documents/cfpb_medical-debt-burden-in-theunited-states_report_2022-03.pdf (describing issues 

with medical billing and collections practices); 

Gideon Weissman et al., Frontier Grp. & U.S. Pub. 

Int. Rsch. Grp. Educ. Fund, Medical Debt 

Malpractice: Consumer Complaints About Medical 

Debt Collectors, and How the CFPB Can Help 

(Spring 2017), https://publicinterestnetwork.org/ 

wp-content/uploads/2017/04/Medical-DebtMalpractic-vUS-1.pdf (63 percent of medical debt 

collection complaints submitted to the CFPB 

asserted that the debt had never been owed in the 

first place, had already been paid or discharged in 

bankruptcy, or was not verified as the consumer’s 

debt). 

circumstances, the CFPB explained that 

consumers have no control over 

whether to incur a debt; they may have 

limited or no ability to shop around and 

may not be able to control the amount 

or timing of their costs. 

Many commenters, who generally 

supported the CFPB’s proposal, agreed 

with these findings by the CFPB. Some 

such commenters emphasized that 

patients in need of urgent or emergency 

medical care are not in a position to 

negotiate the costs of their care and have 

little choice about which health 

providers to receive care from based on 

who will accept their insurance (if the 

consumer has any). A few commenters 

also stated there is also generally a lack 

of price transparency for care, despite 

Federal law requiring it, because 

providers may not comply with the law 

or the prices are missing, unreliable, or 

difficult to obtain in advance or because 

of the health providers’ practice (also 

known as chargemaster pricing) of 

charging high rates that are discounted 

for insurers but not for uninsured or 

out-of-network patients. 

In contrast, and as described in more 

detail in part VII, CFPA Section 1022(b) 

Analysis, commenters opposing the 

CFPB’s proposed rule alleged that the 

CFPB had overstated the extent to 

which medical debt results from 

circumstances over which consumers 

have no control. The commenters also 

stated that there is no statutory basis for 

excluding a creditor’s consideration of 

such debt because it is unexpected. 

They further questioned this aspect of 

the CFPB’s rationale, noting that the 

CFPB’s proposal is not limited to just 

unexpected medical debt and also 

covered elective services. These 

commenters and others stated their 

opinion that, even assuming a medical 

debt is unexpected, there are many 

consumer debts that are the result of 

unplanned events that are not the fault 

of the consumer and all such 

information is still pertinent for credit 

underwriting regardless of their 

underlying cause. Another commenter 

stated that even if medical debt is not 

a good indicator of a consumer’s 

repayment risk because in many cases it 

is unavoidable or the result of an 

emergency, it does not alter the 

consumer’s ability to repay even if 

relevant to a consumer’s willingness to 

repay. One commenter stated that 

medical debt should not be treated 

differently from other kinds of 

consumer debt because it is taken on 

involuntarily, because consumers are 

aware that illness is inevitable and 

should be saving for such expenses. 

As explained above and in part VII, 

CFPA Section 1022(b) Analysis, 

available data implies that a substantial 

fraction of medical debt results from 

unplanned expenditures. The CFPB did 

not state in its proposal or mean to 

imply that all medical debt is the result 

of sudden events. However, as stated in 

the NPRM, the fact that much medical 

debt is unexpected means that, as to 

much medical debt, consumers had 

limited ability to understand and 

control costs or their timing, 

distinguishing such debt from other 

types of consumer debt. For example, as 

noted by a commenter, even when a 

hospital must make prices known to 

consumers under Federal law,125

reporting indicates that consumers may 

still have difficulty ascertaining the cost 

of their care.126 And, while consumers 

may also encounter a need to take on 

debt as a result of unexpected, nonmedical events, the CFPB notes that 

medical debt is also unique in ways that 

limit its informational value, such as 

because of the prevalence of errors in 

such information and inconsistent 

reporting, as further addressed below 

and elsewhere in this preamble. 

In response to commenters noting that 

the rule covers both non-elective care 

that stems from emergency health needs 

as well as elective care that is planned, 

the CFPB notes that, as discussed above 

with regard to comments about the 

proposed medical debt information 

definition, elective care is inclusive of 

necessary health care for unanticipated 

health conditions. Further, many of the 

same issues limiting the informational 

value of information about non-elective 

care applies to medical debt information 

about elective care. 

With regard to the comment about 

how medical debt information, even if 

related to an unexpected or sudden 

health event, is relevant to a creditor’s 

assessments of a consumer’s ability to 

repay, the CFPB refers to its discussion 

in part VII.E.5, as to the availability of 

information on consumer reports used 

in underwriting and the ability-to-repay 

or pay requirements under the Truth in 

Lending Act and Regulation Z. 

In the proposal, the CFPB also noted 

that, second, in the period of time since 

the predecessor Agencies enacted their 

rule, more evidence has come to light 

showing that information about medical 

debt is prone to error. The CFPB stated 

that third-party surveys and complaints 

received by the CFPB have shown that 

medical bills commonly contain errors 

and are frequently disputed by 

consumers.127 Further, the CFPB noted 

that the complexity of medical billing, 

the third-party reimbursement process, 

and debt collection practices can lead to 

consumer confusion on payment due 

dates and amounts owed for medical 

bills, as well as questions about the 

accuracy of their bills.128

Comments about inaccuracy and 

errors in medical debt information and 

with medical billing are addressed in 

part VII, CFPA Section 1022(b) Analysis. 

However, to summarize at a high level, 

the CFPB received a large number of 

comments agreeing with the CFPB’s 

point, with many commenters providing 

or citing to consumer anecdotes or 

publicly available consumer complaints 

about consumers encountering errors in 

their medical bills, notices of collection 

for medical debt, or on their consumer 

reports. In addition to the issues raised 

by the CFPB, commenters also stated 

that third-party debt collectors and debt 

buyers often lack access to original 

creditors’ systems of records about 

medical debt, which can lead to errors 

on collection notices sent to consumers 

or in medical debt information reported 

to consumer reporting agencies. Several 

commenters also flagged that many 

consumers have difficulty 

understanding medical bills, navigating 

insurance appeals, or successfully using 

the dispute process for errors related to 

medical debt information on their 

consumer reports, suggesting that the 


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129Consumer Fin. Prot. Bureau, Market Snapshot: 

An Update on Third Party Debt Collections 

Tradelines Reporting, at 5 (Feb. 2023), https://

files.consumerfinance.gov/f/documents/cfpb_

market-snapshot-third-party-debt-collectionstradelines-reporting_2023-02.pdf. 

130 Kenneth P. Brevoort & Michelle Kambara, 

Consumer Fin. Prot. Bureau, Data point: Medical 

debt and credit scores (May 2014), https://

files.consumerfinance.gov/f/201405_cfpb_report_

data-point_medical-debt-credit-scores.pdf. 

131See VantageScore, Major Credit Score News: 

VantageScore Removes Medical Debt Collection 

Records From Latest Scoring Models [Update] (Aug. 

10, 2022), https://www.vantagescore.com/majorcredit-score-news-vantagescore-removes-medicaldebt-collection-records-from-latest-scoring-models/ 

(VantageScore to remove medical collection data 

from VantageScore 3.0 and 4.0 models by January 

2023); Ethan Dornhelm, The Impact of Medical Debt 

Collections on FICO Scores, FICO Blog (July 13, 

2015), https://www.fico.com/blogs/impact-medicaldebt-collections-ficor-scores (describing changes to 

FICO Score 9 with regard to medical collections). 

132Consumer Fin. Prot. Bureau, Medical Debt 

Burden in the United States, at 27–28 (Feb. 2022), 

https://files.consumerfinance.gov/f/documents/ 

cfpb_medical-debt-burden-in-the-united-states_

report_2022-03.pdf. 

133Martin Kleinbard & Laura Udis, Buy Now, Pay 

Later and Credit Reporting, Consumer Fin. Prot. 

Bureau (June 15, 2022), https://

www.consumerfinance.gov/about-us/blog/by-nowpay-later-and-credit-reporting/. 

rate of error may be higher than is 

known. 

Some commenters generally opposing 

the CFPB’s proposal did not disagree 

with the CFPB that information about 

medical debt often contains errors, but 

either implied that even erroneous 

medical debt information is needed for 

accurate credit assessments or stated 

that the solution for errors in medical 

debt information is to improve the 

accuracy of medical debt information 

that is reported to consumer reporting 

agencies or reform the health care 

system. One commenter stated that 

billing errors should be resolved 

between health care providers and 

consumers rather than by removing 

medical debt information from 

consumer reports. Other commenters 

opposing the proposal stated that the 

CFPB’s assessment that information 

about medical debt is prone to error is 

based upon biased and/or flawed 

studies and information. 

As explained in detail in part VII, 

CFPA Section 1022(b) Analysis, the 

CFPB understands that many medical 

collections included on consumer 

reports reflect incorrect billing, 

including debts that were already paid 

by either the consumer or by their 

insurance company, or debts that are 

not owed by the consumer. Further, the 

CFPB understands that the prevalence 

of such errors could be due to factors 

such as that, unlike other consumer 

debts like banking/financial debts, 

nearly all credit reporting of medical 

debt is managed by third-party debt 

collection agencies, who may have 

limited access to the original creditors’ 

systems of records.129 The CFPB 

disagrees with commenters implying 

that erroneous medical debt information 

can assist in making accurate 

evaluations of a consumer’s ability to 

repay future debt. The CFPB has also 

assessed potential alternatives for 

improving the accuracy of medical debt 

information reported to consumer 

reporting agencies and determined that 

such measures would not be sufficient 

to achieve the objective of protecting 

consumer privacy with respect to 

sensitive medical information. 

In support of its preliminary 

determination, the CFPB also explained 

that, third, its work shows that medical 

debt information has relatively limited 

predictive value. Generally, the CFPB 

cited its research from 2014, which the 

CFPB explained found that medical debt 

collections tradelines (also referred to as 

medical collections) are less predictive 

of future consumer credit performance 

than nonmedical collections.130 The 

CFPB cited research included in part XI, 

Technical Appendix, of the NPRM 

(which is also addressed in part XII, 

Technical Appendix, of this final rule), 

which the CFPB said suggests that not 

only can creditors responsibly 

underwrite credit without information 

about consumers’ medical debts, but 

also that such information may lead to 

a market failure because it may be an 

inaccurate signal of whether a consumer 

will pay a future debt. The CFPB also 

stated that under the assumption that 

two-year serious delinquency is a good 

proxy for the overall risk of a credit 

account, the Technical Appendix 

implies that information about 

consumers’ medical debts distorts 

underwriting decisions, impairs 

creditors’ ability to make safe and lowrisk credit approvals, and thus reduces 

credit approval volumes within 

creditors’ risk-tolerances. 

The CFPB also noted that two major 

credit score providers had adjusted their 

newer models to reduce or eliminate the 

weight of medical debt collections,131

which it said further confirmed the 

limited value of medical debt 

information for ensuring that credit 

decisions are based on whether a 

consumer will repay a loan. The CFPB 

observed that, however, some widely 

used models still weigh medical and 

nonmedical collections equally.132 The 

CFPB stated that this means that 

consumers with medical debt may still 

be negatively affected if creditors use 

older scoring models that overweigh 

medical debt. 

Comments about the CFPB’s findings 

and research about the limited 

predictive value of medical debt 

information are discussed in part VII, 

CFPA Section 1022(b) Analysis. 

Generally, however, the CFPB received 

comments both agreeing and disagreeing 

with the CFPB’s findings about the 

value of medical debt information for 

predicting a consumer’s ability to repay 

a future debt. Commenters disagreeing 

with the CFPB’s conclusions 

emphasized that the CFPB’s research 

states that medical debt is less 

predictive and is not ‘‘not’’ predictive of 

a consumer’s risk of delinquency. These 

commenters also stated that because, in 

their view, medical debt information is 

predictive, creditors need such 

information to make accurate 

assessments of a consumers’ 

creditworthiness and capacity to take on 

debt. One commenter also stated that 

the CFPB had failed to consider whether 

voluntarily incurred medical debt 

differs from involuntarily incurred 

medical debt in terms of predictiveness. 

Commenters disputing the CFPB’s 

finding that medical debt information 

has limited predictive value also stated 

that even though one major credit score 

provider, VantageScore, has removed 

medical debt as a factor in its newer 

credit score models, another major 

credit score provider, FICO, has found 

that consumers with unpaid medical 

debt tradelines are more risky than 

consumers without any derogatory 

information in their credit files. 

Commenters opposing the rule also 

stated that several public statements by 

CFPB officials that medical debt 

information is not predictive contradict 

the CFPB’s research findings that 

medical collections information is 

relatively less predictive than 

nonmedical collections information. 

Commenters also stated that the 

proposal conflicts with the CFPB’s 

positions in other contexts, such as with 

regard to a CFPB blog post about credit 

reporting and the buy now pay later 

industry encouraging more information 

furnishing of both positive and negative 

information.133

As explained further by the CFPB in 

part VII, CFPA Section 1022(b) Analysis, 

the CFPB maintains that its research 

shows that medical debt information 

overall has only limited predictive value 

and the CFPB expects that medical 

collections can be removed from 

underwriting models without 

significantly reducing their ability to 

predict serious delinquency if 

underwriting models continue to 

include other variables that are 

sufficiently predictive of delinquency 

risk. The CFPB reminds creditors and 


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134Consumer Fin. Prot. Bureau, Market Snapshot: 

An Update on Third-Party Debt Collections 

Tradelines Reporting, at 16 (Feb. 2023), https://

files.consumerfinance.gov/f/documents/cfpb_

market-snapshot-third-party-debt-collectionstradelines-reporting_2023-02.pdf (as of Q1 2022, 57 

percent of all tradelines were medical collections 

and were the most common collections type); 

Consumer Fin. Prot. Bureau, Market Snapshot: 

Third-Party Debt Collections Tradelines Reporting, 

at 12–13 (July 2019), https://

files.consumerfinance.gov/f/documents/201907_

cfpb_third-party-debt-collections_report.pdf 

(finding that 58 percent of collections tradelines in 

credit records from 2004 to 2018 were for medical 

debt); Consumer Fin. Prot. Bureau, Consumer credit 

reports: A study of medical and non-medical 

collections, at 5 (Dec. 2014), https://

files.consumerfinance.gov/f/201412_cfpb_reports_

consumer-credit-medical-and-non-medicalcollections.pdf (medical collections account for 52.1 

percent of all collections tradelines). 

135See Consumer Fin. Prot. Bureau, Market 

Snapshot: An Update on Third-Party Debt 

Collections Tradelines Reporting, at 12 n.9 (Feb. 

2023), https://files.consumerfinance.gov/f/ 

documents/cfpb_market-snapshot-third-party-debtcollections-tradelines-reporting_2023-02.pdf 

(describing how medical tradelines often do not 

persist on consumer reports, how medical 

collections accounts are rarely marked as paid, and 

noting ‘‘pay-to-delete’’ practices used by debt 

collectors and debt buyers to pressure consumers 

into paying or settling debt). 

136Consumer Fin. Prot. Bureau, Medical Debt 

Burden in the United States, at 26 (Feb. 2022), 

https://files.consumerfinance.gov/f/documents/ 

cfpb_medical-debt-burden-in-the-united-states_

report_2022-03.pdf. 

137Bus. Wire, Equifax, Experian, and TransUnion 

Support U.S. Consumers With Changes to Medical 

Collection Debt Reporting (Mar. 18, 2022), https:// 

www.businesswire.com/news/home/ 

20220318005244/en/Equifax-Experian-andTransUnion-Support-U.S.-Consumers-WithChanges-to-Medical-Collection-Debt-Reporting. 

138One such credit score provider, VantageScore, 

has completely stopped factoring medical 

collections in the latest versions of its models due 

to lack of their predictiveness as compared with 

other accounts in collections. See AnnaMaria 

Andriotis, Major Credit-Score Provider to Exclude 

Medical Debts, Wall St. J. (Aug. 10, 2022), https:// 

www.wsj.com/articles/major-credit-score-providerto-exclude-medical-debts-11660102729. 

139See Comment from Arlington Cmty. Fed. 

Credit Union, Re: FCRA Proposals and Alternatives 

Under Consideration, at 2–3 (Nov. 6, 2023), 

SBREFA Report app. A; Comment from First Sec. 

Bank & Tr., Re: CFPB’s Outline of Proposals and 

Alternatives Under Consideration, Small Business 

Advisory Review Panel for Consumer Reporting 

Rulemaking, at 7 (Nov. 6, 2023), SBREFA Report 

app. A (bank does not consider medical collections 

unless aware the consumer has made periodic 

payment arrangements with a collection agency or 

medical establishment). 

consumer reporting agencies to look to 

the requirements of the final rule to 

determine their compliance obligations 

and not statements generally 

characterizing the rule for the public. 

The CFPB also disagrees with 

commenters that the CFPB’s proposed 

approach is contradictory; any general 

statements about credit reporting or 

consideration of consumer information 

for credit eligibility were made under 

contexts specific to those statements 

and were not made in consideration of 

the findings, evidence, and policies for 

this final rule. 

In support of its preliminary 

determination, the CFPB also noted that, 

fourth, the inconsistent nature of 

medical collection furnishing and 

medical debt collection practices likely 

limits the value of such information for 

credit underwriting. The CFPB 

expressed that the vast majority of such 

medical debt reporting is done by thirdparty debt collectors,134 who use 

consumer reporting as a way to coerce 

consumers to pay medical debt, even in 

some cases for medical debt that the 

consumer may not owe or that has 

already been paid.135 However, the 

CFPB also explained that not all 

medical debt is reported; not all medical 

debt collectors report medical debts to 

consumer reporting agencies and health 

care providers themselves rarely do 

so.136 The CFPB suggested that these 

issues imply that even consumers with 

similar amounts of medical debt may 

face markedly different outcomes in the 

credit market based on whether their 

medical debt is furnished or not. 

The CFPB did not receive any 

comments disputing that medical debt 

information is inconsistently reported. 

One commenter, however, stated that 

the CFPB’s proposal would not resolve 

this issue and medical debt information 

is nonetheless an important data point 

for creditors. In response to this 

commenter, the CFPB notes that as 

explained in part VII.E.5, Availability of 

information on consumer reports used 

in underwriting, evidence shows that 

some medical collections reflect 

inaccurate billing practices, and their 

inconsistent inclusion on consumer 

reports adds only a noisy signal of 

consumers’ ability to pay. 

In the proposal, the CFPB also stated 

that, fifth, many industry participants 

have reduced or stopped their reliance 

on information about medical debt, 

casting doubt on its value. The three 

NCRAs have stopped reporting medical 

collections that are under $500, less 

than a year old, or paid.137 And, the 

CFPB observed, large credit scoring 

companies are moving to models that 

completely or partially exclude medical 

collections.138 The CFPB also noted that 

it had learned from several small entity 

representatives during the SBREFA 

process that some creditors have 

stopped considering medical collections 

in their underwriting.139

Some commenters disagreed with the 

CFPB that these developments imply 

that the market likewise finds that 

medical debt information has limited 

value for credit underwriting. The 

commenters generally stated that the 

market actions indicate that the CFPB’s 

proposal is duplicative and 

unnecessary. Some other commenters 

emphasized, however, that the NCRAs’ 

actions were not about the 

predictiveness of information, but rather 

were meant to provide more time for 

health insurance reimbursements. Other 

commenters stated that the NCRAs’ 

changes have left large medical debts on 

consumer reports, which the 

commenters said should be considered 

in credit underwriting. Commenters 

supporting the CFPB’s proposal, 

however, stated the market changes 

have been insufficient and many 

Americans still have medical debt 

information on their consumer reports, 

emphasized that the national consumer 

reporting agencies’ actions are voluntary 

and could be stopped, and observed that 

there are still older credit scores and 

metrics in use that do not have the same 

adjustments that reduce the amount of 

medical debt information on consumer 

reports. 

The CFPB disagrees with the 

commenters implying the market 

participant actions described in the 

proposal are not significant indicators it 

should take under consideration for the 

final rule. For example, the NCRAs’ 

actions to remove medical debt 

collections with balances of less than 

$500 and paid medical collections on 

consumer reports, credit score providers 

FICO’s and VantageScore’s actions to 

reduce or remove consideration of 

medical debt collection information 

from their newer models, and changes 

by individual lenders represent a clear 

trend in the credit reporting and credit 

markets to reduce the weight of medical 

debt information for credit evaluation 

purposes. However, as noted by 

commenters, the NCRAs’ actions are 

voluntary and could be reversed, and 

medical debt information still remains 

on consumer reports. Given the CFPB’s 

finding, as noted above, that medical 

debt information has limited predictive 

value and its expectation that medical 

collections can be removed from 

underwriting models without 

significantly reducing their ability to 

predict serious delinquency if 

underwriting models continue to 

include other variables that are 

sufficiently predictive of delinquency 

risk, the CFPB concludes that it is no 

longer appropriate and necessary for 

creditors to consider medical debt 

information under a regulatory 

exception to the statutory creditor 

prohibition. 

Sixth, the CFPB also explained in the 

proposal that some States and some 

Federal agencies have also acted to limit 

creditors’ access to, or ability to 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3299 

140See Colo. Rev. Stat. section 5–18–109; N.Y. 

Pub. Health Law art. 49–A; 2024 Conn. Act 24–6; 

2024 Va. Acts ch. 751. Since the NPRM was issued, 

several other states have passed similar laws. See 

2024 Cal. SB 1061; 2024 Minn. Ch. 332C; 2024 New 

Jersey A3681; 2024 Ill. Pub. Act 103–0648. 

141See The White House, Fact Sheet: The Biden 

Administration Announces New Actions to Lessen 

the Burden of Medical Debt and Increase Consumer 

Protection (Apr. 11, 2022), https://

www.whitehouse.gov/briefing-room/statementsreleases/2022/04/11/fact-sheet-the-bidenadministration-announces-new-actions-to-lessenthe-burden-of-medical-debt-and-increaseconsumer-protection/. 

consider, certain medical debt 

information. As an example, the CFPB 

noted that several States had prohibited, 

or had been considering prohibiting, the 

inclusion of consumer medical debt on 

consumer reports at the time of the 

NPRM.140 The CFPB stated that 

although such efforts were in their early 

stages, the CFPB was not aware of 

evidence that such actions had affected 

creditors’ underwriting standards or that 

creditors have materially curtailed 

access to credit or tightened credit terms 

in those States. The CFPB also 

explained that some Federal 

government agencies had also been 

reviewing and modifying their 

underwriting practices to reduce or 

eliminate medical debt collections from 

consideration when evaluating whether 

a consumer will repay a loan.141 The 

CFPB stated that these changes by the 

States and by the Federal government 

indicate a growing awareness that 

medical debt information may have 

limited value for credit underwriting 

purposes. The CFPB also stated that 

consumer reporting agencies and 

creditors will already need to comply 

with these new laws and best practices 

and, given operational and business 

realities, may need to do so on a broad 

basis. The CFPB concluded that 

removing the financial information 

exception in Regulation V would create 

a uniform nationwide baseline 

consistent with these advancements. 

Commenters opposing the rule 

disagreed with the CFPB that State and 

Federal actions related to medical debt 

also argue in favor of the CFPB’s 

preliminary determination. Some such 

commenters said that the CFPB should 

not finalize its proposed rule because 

some States have already enacted 

reforms as to medical debt information 

and credit reporting. One commenter 

stated that the proposed rule, if 

finalized, could create confusion for 

small entities in States with such 

protections and the CFPB should clarify 

which law controls. One commenter 

supporting the proposed rule stated that 

the rule enhances some States’ 

consumer protection efforts as to 

medical debt, such as those in New 

York, or provide protection for residents 

of states without such measures. 

Other commenters stated that changes 

on the Federal level on medical debt 

remove the need for any intervention by 

the CFPB, citing the passage of the No 

Surprises Act, changes to Regulation F 

(which implements the Fair Debt 

Collection Practices Act), and inquiries 

into medical credit cards and other 

medical payment products, among 

others. One commenter also stated that 

health insurance under the Affordable 

Care Act is more accessible than before 

and there currently are high rates of 

insurance coverage. One commenter 

stated that the CFPB’s reference to 

actions by Freddie Mac and Fannie Mae 

to no longer consider medical 

collections in mortgage underwriting 

does not prove the CFPB’s preliminary 

determination; the two entities, who are 

under conservatorship, were directed to 

make such changes by the Federal 

government and the changes were not 

based on research and analysis. 

The CFPB reaffirms its point in the 

proposal that the changes that have been 

made by the States and by the Federal 

government indicate that there is a 

growing awareness that medical debt 

information may have limited value for 

credit underwriting purposes. The CFPB 

agrees with commenters that the CFPB’s 

proposal would facilitate such efforts. 

Further, contrary to some commenters’ 

assertions, the CFPB believes that the 

actions to date, which are not uniform 

in their scope or execution, suggest that 

consumers would benefit from having a 

Federal, baseline standard for the 

creditors’ treatment of medical debt 

information. 

Although not mentioned by the CFPB 

as part of the reasoning behind its 

preliminary determination, a few 

commenters stated the CFPB also 

claimed that the proposal will solve the 

issue of debt parking, which the 

commenters stated is not a real concern. 

In response, the CFPB notes that debt 

parking was not a focus of its proposal 

and was not cited as a one of the reasons 

underlying its preliminary 

determination. Likewise, debt parking is 

not one of the justifications for the final 

rule. 

In addition to disputing the specific 

points raised by the CFPB in support of 

its preliminary determination, some 

commenters also disagreed with the 

CFPB’s preliminary determination that 

the financial information exception as to 

medical debt information is not 

consistent with the intent of the creditor 

prohibition to protect consumers’ 

sensitive medical information. These 

commenters stated that current privacy 

protections are sufficient and that the 

CFPB had not considered or presented 

evidence of inappropriate practices by 

lenders under the current rule that 

warrant the change in policy. 

Commenters also stated that the FCRA 

does not delegate the power to change 

privacy protections to the CFPB; that the 

proposal might increase privacy risks, 

because it may require handling of 

medical information across more 

entities; and that consumers would have 

less privacy because of a likely increase 

in debt collection litigation as a result 

of the rule. 

With regard to these commenters’ 

concerns about privacy, the CFPB 

observes that by enacting FCRA section 

604(g)(2), Congress made a 

determination that all medical 

information—including medical debt 

information, as a type of medical 

information—is sensitive data 

warranting specific privacy protections 

in the form of the creditor prohibition. 

By removing the financial information 

exception, the CFPB is acting within its 

authority to remove an exception put in 

place by the predecessor Agencies and 

is facilitating Congress’s intent to 

provide privacy protections in the 

manner it determined was appropriate 

to protect consumers’ medical 

information. 

Some commenters also generally 

stated that the CFPB had not met the 

requirements of FCRA section 604(g)(5). 

One commenter stated that Congress 

had not granted the CFPB authority to 

further limit the use of medical 

information at all. And, instead, FCRA 

section 604(g)(5) authorizes the CFPB to 

allow more medical information to be 

considered. Another commenter stated 

that the CFPB had effectively ignored 

the statutorily required balancing 

process by largely ignoring legitimate 

needs for the information and 

concluding that use of medical debt 

information for purposes of assessing 

credit risk is virtually always an 

inappropriate purpose. One commenter 

supporting the rule, however, stated that 

the CFPB had clearly acted within its 

authority under FCRA section 604(g)(5) 

and had used reasoned decision-making 

in removing a regulatory exception, via 

notice and comment rulemaking. The 

commenter also stated that the CFPB’s 

multiple research studies demonstrate 

that the CFPB’s decision was well 

reasoned. 

The CFPB disagrees that it has not 

met the requirements to amend or 

remove an exception under FCRA 

section 604(g)(5). FCRA section 

604(g)(5) provides the CFPB with the 

authority to ‘‘prescribe regulations that 

permit transactions’’ under the creditor 


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3300 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

142As explained below in part VI.B, commenters 

are also incorrect to assert that the CFPB lacks 

authority to prohibit creditors from obtaining or 

using financial aspects of medical information 

because FCRA section 604(g)(2) has a parenthetical 

cross-referencing FCRA section 605(a)(6). 

143 15 U.S.C. 1681b(g)(5). 

prohibition in FCRA section 604(g)(2) 

or, in other words, establish exceptions 

to the prohibition.142 The CFPB is 

exercising that authority here by 

amending its existing regulation, 12 CFR 

1022.30, that creates exceptions to the 

statutory creditor prohibition. In 

particular, the CFPB is amending the 

financial information exception by 

rescinding the financial information 

exception in most of its existing 

applications but retaining a version of 

the exception in § 1022.30(e)(1)(x), with 

revisions discussed later in this 

preamble. Logically, in addition to 

establishing regulations to permit 

creditors’ consideration of more medical 

information, the CFPB likewise has 

authority to amend or rescind, partially 

or fully, previously promulgated 

exceptions to the creditor prohibition, if 

it determines that such an exception is 

not necessary and appropriate, 

consistent with the intent of the creditor 

prohibition to restrict the use of medical 

information for inappropriate purposes. 

When determining whether to amend or 

remove a regulatory exception, the 

CFPB carefully considers the underlying 

rationales as well as the policy and 

economic consequences of doing so, 

while taking into account the baseline 

obligations created by Congress. As 

explained above, the CFPB has carefully 

reviewed the evidence about medical 

debt information and its value for credit 

underwriting, which was not available 

at the time the predecessor Agencies 

promulgated the financial information 

exception, in consideration of the 

privacy purpose of the creditor 

prohibition. Its final determination is 

based upon this review. 

For the reasons above, the CFPB is 

finalizing its determination that it 

generally is not ‘‘necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs’’ for 

creditors to consider sensitive financial 

information concerning a consumer’s 

medical debt for underwriting purposes. 

The CFPB also finds that creditors’ 

consideration of such information under 

the existing financial information 

exception is not consistent with the 

intent of the creditor prohibition to 

restrict the use of medical information 

for inappropriate purposes, as required 

for an exception under FCRA section 

604(g)(5).143

2. Medical Information Related to 

Expenses, Assets, and Collateral 

Proposal 

The financial information exception 

currently permits a creditor to obtain 

and use medical information relating to 

expenses, assets, and collateral, 

including the value, condition, and lien 

status of a medical device that may be 

collateral to secure a loan. As the CFPB 

explained in the NPRM, medical 

expenses and medical debts are closely 

related, in that unpaid medical expenses 

often become medical debts. Because of 

the similarities between medical 

expenses and medical debts, the CFPB 

proposed to treat these categories of 

medical information the same. The 

CFPB also explained that medical 

information related to a consumer’s 

assets and collateral generally refers to 

medical equipment serving as an asset 

or as collateral for a loan, which a 

creditor could potentially seize or 

anticipate could be liquidated to pay off 

a loan. The CFPB understood that such 

medical equipment is often necessary 

and potentially lifesaving. Because of 

the similarities between medical 

expenses and medical debts and the 

importance of medical assets and 

collateral to a consumer’s well-being, 

the CFPB preliminarily determined in 

its proposal that it is not ‘‘necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs’’ for 

creditors to consider medical 

information relating to a consumer’s 

expenses or assets and collateral. 

The CFPB sought comment on its 

proposed approach to removing the 

financial information exception for 

expenses, assets, and collateral, and 

expressed particular interest in 

receiving feedback from creditors and 

their representatives regarding whether 

they take medical devices as collateral 

or into consideration as assets that may 

be used by consumers to pay a future 

debt obligation. 

Comments 

The CFPB received many comments 

related to its proposed approach to 

removing the financial information 

exception for expenses, assets, and 

collateral, most of which expressed 

support for the CFPB’s proposal. 

Commenters expressed that as a 

consumer’s medical debt has not been 

found to have predictive value as to a 

consumer’s ability to repay a loan, the 

fact that a consumer has medical 

expenses or durable medical equipment 

is likewise unlikely to have predictive 

value. 

One commenter shared their opinion 

that all debt is relevant to 

creditworthiness, so medical equipment 

should not be shielded from 

repossession for failure to pay. 

However, the same individual 

commenter ultimately expressed 

support for the rule as proposed, 

explaining that the rule as proposed is 

the best solution given the complex 

nature of health care and medical billing 

practices. 

Many commenters expressed support 

for the removal of the financial 

information exception for collateral, 

characterizing their support for the rule 

as support for prohibiting debt 

collectors from taking medical devices 

as loan collateral, and protecting 

consumers from having their medical 

equipment such as wheelchairs or 

prosthetic limbs repossessed. Many 

commenters further indicated that the 

possibility that medical equipment 

could be used as collateral and 

consequently repossessed for a 

consumer’s inability to pay was 

unreasonable. 

A comment from a coalition of several 

major national orthotic and prosthetic 

organizations in support of the proposal 

expressed concern that the rule is 

unclear as to whether a health care 

provider or supplier of medical devices 

would fall under the definition of 

‘‘creditor’’ for the purposes of 

determining whether they are entities 

that may not repossess a medical device 

under the rule. The same commenter 

also expressed that they were unaware 

of repossession of orthotics and 

prosthetics as a practice and elaborated 

that because many types of medical 

devices, including some orthotics and 

prosthesis, cannot be reused by other 

patients, holding such devices as 

collateral serves only to punish the 

patient. The CFPB did receive one 

comment from an attorney saying that 

she had personally seen medical devices 

being repossessed, but the CFPB did not 

hear evidence from other commenters of 

this being a widespread issue. 

Many commenters expressed that 

medical devices should be prohibited 

from serving as collateral for a loan. 

Commenters expressed that 

repossession of medical devices is a 

dangerous practice that limits or 

altogether prohibits individuals’ 

mobility, productivity, and overall wellbeing. Commenters elaborated that this 

makes it even more difficult or perhaps 

impossible for consumers to ever pay 

their debts. Other commenters also 

explained the disparate impact using 

medical devices as collateral has on 

certain communities, particularly 

veterans and disabled individuals who 


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144See, e.g., U.C.C. 9–203(b)(3). 

145The CFPB notes that ECOA and Regulation B 

prohibit creditors from discriminating in any aspect 

of a credit transaction against an applicant because 

all or part of the applicant’s income derives from 

a public assistance program, which includes but is 

not limited to Social Security disability income. 15 

U.S.C. 1691(a)(2); 12 CFR 1002.2(z), 1002.4(a); see 

also Regulation B comment 2(z)–3. 

may be more likely to rely on medical 

devices. 

Final Rule 

The CFPB understands that medical 

information related to a consumer’s 

assets and collateral generally refers to 

medical equipment serving as an asset 

or as collateral for a loan, which a 

creditor may potentially seize or 

anticipate could be liquidated to pay off 

a loan. The CFPB also understands that 

such medical equipment is often 

necessary and potentially lifesaving. 

The CFPB has also not observed the 

repossession of medical devices as a 

typical practice in the market, despite 

the personal experience from one 

commenter, suggesting that there is 

likely to be low or non-existent costs or 

other burdens associated with the rule 

as it pertains to repossession of medical 

devices. Thus, given the importance of 

medical assets and collateral to a 

consumer’s well-being and the apparent 

limited existence of this practice 

currently, the CFPB has determined that 

it is not ‘‘necessary and appropriate to 

protect legitimate operational, 

transactional, risk, consumer, and other 

needs,’’ or consistent with the intent of 

the creditor prohibition to restrict the 

use of medical information for 

inappropriate purposes, for creditors to 

consider medical information relating to 

a consumer’s assets and collateral. For 

the reasons stated above, the CFPB 

finalizes as proposed, removing the 

financial information exception for 

expenses, assets, and collateral and 

related examples at previously existing 

§ 1022.30(d). The CFPB anticipates that 

under the final rule, creditors will not 

be able to obtain medical information 

for purposes of creating a security 

interest in medical devices, and 

consequently, typically will not use 

medical devices as collateral.144

In response to the commenter 

expressing concern about whether 

health care providers and suppliers of 

medical devices fall under the 

definition of ‘‘creditor’’ for the purposes 

of the rule, this rule does not purport to 

modify the definition of ‘‘creditor,’’ 

which is defined in 12 CFR 

1022.30(b)(2)(ii). Determining whether a 

health care provider or supplier of 

medical devices is a creditor is a factspecific inquiry that depends on the 

facts and circumstances. In assessing 

their obligations under the rule, health 

care providers and suppliers of medical 

devices should look to the definition of 

‘‘creditor’’ in 12 CFR 1022.30(b)(2)(ii), 

which provides that the term has the 

same meaning as in section 702 of the 

ECOA. And, separately, the CFPB 

reminds health care providers and 

suppliers to look to final § 1022.30 to 

determine their obligations as to 

obtaining or using medical information 

for credit eligibility determinations. 

3. Medical Information Related to 

Income, Benefits, or the Purpose of the 

Loan 

Proposal 

The financial information exception 

currently permits creditors to consider 

medical information related to income, 

benefits, and the purpose of the loan, 

including the use of the loan proceeds 

under certain conditions. The CFPB 

proposed to remove the financial 

information exception while retaining 

these elements of the exception that 

permit a creditor to consider medical 

information relating to income, benefits, 

and the purpose of the loan. In its 

proposal, the CFPB explained its 

preliminary determination that the 

elements of the exception relating to 

income, benefits, and the purpose of the 

loan are necessary and appropriate to 

protect legitimate operational, 

transactional, risk, consumer, and other 

needs, including permitting actions 

necessary for administrative verification 

purposes, consistent with FCRA’s intent 

to restrict the use of medical 

information for inappropriate purposes. 

The CFPB explained that consumers 

whose primary source of income is 

disability benefits might not be able to 

obtain credit at all if creditors could not 

consider their income.145 And since 

creditors may be unwilling to 

underwrite if they lack information 

about the purpose of a loan, consumers 

might not be able to obtain needed 

credit unless creditors have access to 

that information. 

Comments 

The CFPB received a number of 

comments related to its approach to 

retaining elements of the financial 

information exception that permit a 

creditor to consider medical information 

relating to income, benefits, and the 

purpose of the loan. Most comments 

were from consumers expressing 

approval of the CFPB’s proposal. 

One commenter, a professional 

association for physicians and medical 

students, stated that this aspect of the 

financial information exception was 

appropriate because it ensures that 

creditors can consider necessary 

financial information, such as income 

from disability or workers’ 

compensation, without compromising 

the privacy and sensitivity of the 

consumer’s medical information. The 

commenter elaborated that the proposed 

rule balances the need for accurate 

credit assessments with the protection 

of consumer privacy. Another 

commenter, citing a report by a 

nonpartisan research and policy 

institute, explained that a large 

percentage of Supplemental Security 

Income (SSI) beneficiaries rely on SSI 

benefits as their only source of income, 

and the CFPB’s proposal ensures that 

these consumers can access credit and 

qualify for a loan. 

One commenter expressed concern 

about the potential for misuse of 

information obtained under proposed 

§ 1022.30(e)(1)(x). The commenter 

suggested that once a creditor becomes 

aware of information obtained under the 

exception, it may be difficult to measure 

bias or ensure the information is used in 

a permitted manner. Another 

commenter, a State insurance 

commissioner, expressed support for the 

CFPB’s proposal, but similarly 

expressed concern about the lack of 

visibility into a credit reporting agency’s 

use of this type of medical information. 

One commenter expressed concern 

that § 1022.30(e) includes examples 

illustrating the exception as applied to 

medical information related to benefits 

and income but does not include 

examples illustrating the exception as 

applied to medical information related 

to the purpose of the loan. 

Final Rule 

Except as discussed in as discussed in 

part VI.A, Consumer-Authorized 

Transaction History below, the CFPB 

finalizes § 1022.30(e)(1)(x) as 

substantially proposed, with technical 

edits for renumbering. Final 

§ 1022.30(e)(1)(x)(A)(2), previously 

proposed § 1022.30(e)(1)(x)(A), 

generally provides an exception for the 

use of medical information relating to 

income, benefits, or the purpose of the 

loan, including the use of proceeds. 

Section 1022.30(e)(1)(x)(A)(2) also 

provides examples of the types of 

financial information related to income 

and benefits relied upon as a source of 

repayment. Final § 1022.30(e)(1)(x)(B) 

and (C) provide that a creditor must use 

the medical information described in 

§ 1022.30(e)(1)(x)(A) in a manner and to 

an extent that is no less favorable than 

comparable, nonmedical information 

and that the creditor cannot take the 

consumer’s physical, mental, or 


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146SBREFA Outline at 19; 89 FR 51682, 51695 

(June 18, 2024). 

147 Id. at 51696. 

behavioral health, condition or history, 

type of treatment, or prognosis into 

account. 

Regarding comments expressing 

concerns about transparency and the 

potential for misuse of information 

obtained under the rule, final 

§ 1022.30(e)(1)(x) restates the previously 

codified exception with a narrower 

scope. The CFPB is not aware of any 

concerns related to the consideration of 

medical information related to income, 

benefits, or purpose of the loan, and 

declines to make any further revisions. 

The CFPB also finalizes as proposed 

Example 7 in § 1022.30(e)(7), which 

illustrates a use of medical information 

related to long-term disability income. 

Regarding the comment about the need 

for examples illustrating when medical 

information may relate to the purpose of 

the loan, the commenter did not suggest 

language, and the CFPB declines to 

revise § 1022.30(e) to include examples 

illustrating the exception as applied to 

medical information related to the 

purpose of the loan. 

C. Limits on a Consumer Reporting 

Agency’s Disclosure of Medical Debt 

Information 

Proposal 

The CFPB proposed to add new 

§ 1022.38 to subpart D to address how 

a consumer reporting agency’s medical 

debt information reporting 

responsibilities would be impacted by 

the proposal to remove the financial 

information exception for obtaining and 

using medical information in 

connection with any determination of 

the consumer’s eligibility for credit. 

Proposed § 1022.38 would have 

permitted a consumer reporting agency 

to include medical debt information in 

a consumer report furnished to a 

creditor for credit eligibility purposes 

only if the following criteria are met: (1) 

the consumer reporting agency has 

reason to believe the creditor intends to 

use the medical debt information in a 

manner not prohibited by § 1022.30; and 

(2) the consumer reporting agency is not 

otherwise prohibited from furnishing to 

the creditor a consumer report 

containing the medical debt 

information, including by a State law 

that prohibits furnishing to the creditor 

a consumer report containing medical 

debt information. 

The CFPB also proposed a related 

amendment to remove the example in 

§ 1022.30(c)(3)(iii), which describes a 

creditor receiving medical information 

on a consumer report furnished by a 

consumer reporting agency. While there 

may be some instances where a 

consumer reporting agency may furnish 

to a creditor a consumer report 

containing medical information, the 

proposed amendments would limit 

those instances and render the example 

less instructive and potentially 

confusing. Therefore, the CFPB 

proposed to remove the example. 

The CFPB considered alternatives to 

its proposed approach to § 1022.38 but 

preliminarily determined that its 

rulemaking goals were best achieved 

through the proposed approach. For 

example, as discussed in the SBREFA 

Outline and the proposed rule, the 

CFPB considered mandating a delay in 

the furnishing and reporting of medical 

debt for a particular period of time, and 

not reporting or furnishing medical debt 

below a particular dollar amount.146

The CFPB also considered requiring 

consumer reporting agencies and 

medical information furnishers, upon 

receiving a dispute, to conduct an 

independent investigation to certify that 

a disputed medical debt is accurate and 

not subject to pending insurance 

disputes.147 The CFPB requested 

comment on all aspects of proposed 

§ 1022.38, including the alternatives 

discussed. 

Comments 

Proposed § 1022.38 Generally 

A number of commenters expressed 

general support for proposed § 1022.38 

and identified benefits of the proposal. 

For example, some commenters stated 

that proposed § 1022.38 would stop debt 

collectors from using the credit 

reporting system as a payment coercion 

tactic and forcing consumers to pay 

debts that they may not owe. 

Commenters also explained that 

proposed § 1022.38 would protect 

consumers’ health privacy. See part VII, 

CFPA Section 1022(b) Analysis, for a 

more fulsome discussion of benefits. 

In addition, the CFPB received 

comments that appeared to be part of 

several comment submission campaigns 

in support of the proposed rule. Such 

comments typically advocated for 

finalizing the proposed rule. 

Other commenters expressed general 

opposition to proposed § 1022.38 and 

identified various categories of harms, 

including to consumers (e.g., increased 

healthcare costs, reduced access to 

medical care), medical providers (e.g., 

loss of income from non-payment, 

increased reliance on litigation), debt 

collectors (e.g., decrease in collectible 

accounts, increased collection costs), 

creditors (e.g., unable to assess the true 

credit risk of potential borrowers, 

increased reliance on litigation), 

insurance providers (e.g., consumers 

would be disincentivized from 

purchasing health insurance), and 

consumer reporting agencies (e.g., 

removal of medical debt from consumer 

reports would be complex and costly). 

One commenter noted that household 

surveys, court records, and information 

collected from providers will be 

increasingly important sources of data 

for tracking the prevalence of medical 

debt, as less of this debt appears on 

consumer reports. Another commenter 

noted that the transition to newer credit 

score models that exclude medical debt 

is not expected until the fourth quarter 

of 2025. See part VII, CFPA Section 

1022(b) Analysis, for a more fulsome 

discussion of potential harms. 

The CFPB also received comments 

that appeared to be part of several 

comment submission campaigns 

opposing the proposed rule. Such 

comments typically identified potential 

harms and requested that the CFPB 

reconsider the proposed rule. 

Some commenters appear to have 

misunderstood the proposal as limiting 

the circumstances in which a consumer 

reporting agency can receive 

information about a consumer’s medical 

information. 

A number of commenters stated that 

proposed § 1022.38 is unnecessary 

because the recent market changes leave 

only unpaid medical debts greater than 

$500 on consumer reports, and the 

proposal fails to recognize the 

marketplace’s ongoing self-corrections 

and innovation. At least one commenter 

pointed to the CFPB’s Data Point as 

demonstrating that debts above $500 are 

associated with higher delinquency 

rates and should continue to be reported 

and considered in underwriting. Some 

commenters requested that the CFPB at 

least allow more time to evaluate 

whether the NCRAs’ reporting changes 

from 2022 and 2023 will address the 

CFPB’s concerns about medical debt. 

Some commenters questioned the 

CFPB’s authority to promulgate 

§ 1022.38. For example, commenters 

stated that FCRA section 604(g)(1)(C) 

affirmatively authorizes a consumer 

reporting agency to furnish a consumer 

report that contains such medical debt 

information if the information is coded 

to hide the identity of the provider or 

nature of services. Commenters 

therefore concluded that Congress’s 

intent to permit consumer reporting 

agencies to furnish medical debt 

information is clear and the CFPB 

cannot supersede such a statutory 

authorization. At least one commenter 

stated that because FCRA section 

604(g)(1)(C) affirmatively permits a 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3303 

148 15 U.S.C. 1681s(e)(1). 

consumer reporting agency to provide 

medical information related to 

transactions, accounts or balances 

relating to debts arising from the receipt 

of medical services, products, or 

devices, the FCRA section 621(e) 

general rulemaking authority, which is 

limited to those rules necessary and 

appropriate to administer and carry out 

the purposes and objectives of the 

FCRA, and to prevent evasions thereof 

or to facilitate compliance therewith, is 

insufficient to support proposed 

§ 1022.38. A commenter noted that 

Congress has attempted, but failed, to 

pass legislation to give CFPB the 

explicit authority to eliminate medical 

debt from consumer reports. In addition, 

commenters pointed to the 

congressional finding in the FCRA that 

the banking system is dependent upon 

fair and accurate credit reporting and 

stated that a consumer report that does 

not reflect significant debts owed by a 

consumer is, by definition, inaccurate. 

One commenter noted that Congress 

chose to promote the accuracy of 

information on consumer reports by 

expressly requiring furnishers to have 

reasonable procedures to ensure they 

provide complete and accurate 

information, and by enabling consumers 

to dispute the accuracy of specific items 

on their consumer reports, not by 

suppressing information. 

In addition, commenters stated that 

FCRA section 605(a) specifically 

identifies types of records that may not 

be included on a consumer report 

(unless an exception applies). They 

further stated that in 2018, Congress 

amended the list of items specifically 

excluded from consumer reports to 

include, under certain circumstances, 

information related to a veteran’s 

medical debt. From this, the 

commenters concluded that Congress 

clearly articulated in the FCRA 

information that may not be included in 

a consumer report and considered the 

impact of medical debt reporting but 

chose not to exclude all categories of 

medical debt from consumer reports. 

Another commenter noted that on 

multiple occasions, Congress has 

amended the FCRA to regulate when, 

how, and to what extent medical 

information may be included in 

consumer reports and concluded that if 

Congress wanted to ban medical debt 

from consumer reports, it would have 

done so. 

Commenters also stated that the 

specific grants of rulemaking authority 

in FCRA section 604(g) do not provide 

the CFPB with authority to restrict 

account information included in 

consumer reports or to otherwise 

regulate how medical debt is reported. 

To be clear, the proposed rule did not 

purport to, and the final rule does not, 

prohibit furnishers from furnishing 

accurate medical debts to consumer 

reporting agencies. Section 1022.38 

addresses how consumer reporting 

agencies’ responsibilities, with respect 

to medical debt information, are 

impacted when creditors are prohibited 

from obtaining or using the medical 

debt information. 

As discussed above, the CFPB 

acknowledges the value of the voluntary 

consumer reporting changes by the three 

NCRAs that stopped the reporting of 

some, but not all, medical debt on a 

consumer report. However, the CFPB 

has determined that these types of 

changes do not do enough to protect the 

privacy of consumers’ medical data 

during the credit underwriting process, 

nor do they resolve concerns about 

accuracy. Although these market 

changes have reduced the total number 

of medical collections tradelines 

reflected on consumer reports, their 

voluntary nature means there is some 

uncertainty about whether the changes 

could be reversed in the future, and, as 

discussed in part I.B, Market 

Background, Medical Debt and 

Consumer Reporting, 15 million 

Americans still have $49 billion in 

medical bills on their consumer reports 

even after the NCRAs’ voluntary 

changes. A number of commenters share 

the CFPB’s position that because the 

changes are voluntary and do not cover 

all amounts of medical debt, the 

permanence and broader effect of 

removing the financial information 

exception in this rulemaking is 

important. And, the fact that the CFPB 

has no evidence that the voluntary 

NCRA reporting changes have disrupted 

the market provides another basis for 

finalizing this rule, which builds upon 

those voluntary changes to provide 

expanded and permanent protections 

for consumers. 

Contrary to some commenters’ 

assertions, FCRA section 604(g)(1)(C) 

does not affirmatively authorize a 

consumer reporting agency to furnish a 

consumer report containing medical 

information. FCRA section 604(g)(1)(C) 

is a prohibition. FCRA section 

604(g)(1)(C) states ‘‘Limitation on 

consumer reporting agencies. A 

consumer reporting agency shall not 

furnish . . . in connection with a credit 

. . . transaction . . . .’’ FCRA section 

604(g)(1)(C) prohibits a consumer 

reporting agency from furnishing, in 

connection with a credit transaction, a 

consumer report that contains medical 

debt information that is not anonymized 

(assuming the consumer has not 

consented to the furnishing of a report 

under FCRA section 604(g)(1)(B)). Such 

protections are necessary when 

creditors are lawfully permitted to 

obtain and use medical information, 

such as when an appropriate agency has 

used its delegated authority to create an 

exception to the general prohibition on 

creditors obtaining and using medical 

information as set forth in FCRA section 

604(g)(2) and (5)(A). The protection in 

FCRA section 604(g)(1)(C) ensures that 

the medical information obtained or 

used by creditors would be anonymized 

to protect consumers’ privacy. The fact 

that FCRA section 604(g)(1)(C) carves 

certain anonymized information out of 

the general prohibition in FCRA section 

604(g)(1) does not immunize such 

anonymized information from 

restrictions contained in other 

provisions, such as FCRA section 

604(a)’s permissible purpose restrictions 

or regulations issued under FCRA 

section 621(e). 

In addition, the fact that FCRA section 

605(a) identifies some types of records 

that may not be included on a consumer 

report does not mean that the CFPB 

lacks authority to determine that other 

types of records also may not be 

included on a consumer report. To the 

contrary, when Congress gave the CFPB 

rule writing authority under the FCRA, 

it excepted only two specific provisions 

of the FCRA—sections 615(e) and 

628.148 By implication, with respect to 

every other provision of the FCRA, 

Congress intended the CFPB to be able 

to prescribe regulations as may be 

necessary or appropriate to administer 

and carry out the purposes and 

objectives of the FCRA, and to prevent 

evasions thereof or to facilitate 

compliance therewith. 

Relatedly, the fact that Congress 

enacted a specific, narrow solution to 

address particular concerns with 

veterans’ medical debt does not mean 

that Congress intended to preclude the 

CFPB from addressing a different type of 

problem, albeit also related to medical 

debt. This rulemaking is directly related 

to the prohibition on creditors obtaining 

or using medical information in 

connection with any determination of 

the consumer’s eligibility for credit, also 

enacted by Congress. This rulemaking 

merely removes an unwarranted 

regulatory exception to that prohibition, 

and the result of the removal of the 

exception, in light of other provisions in 

the FCRA, is that medical debt 

information is now an additional type of 

record that cannot be included in a 

consumer report under certain 

circumstances. 


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149See 15 U.S.C. 1681c(a)(7) through (8). 

Finally, as discussed in the Final Rule 

section below, the CFPB is not relying 

on the specific grants of rulemaking 

authority in FCRA section 604(g) as 

authority for § 1022.38. 

Proposed § 1022.38(a) 

The scope of proposed § 1022.38 

would have applied to any consumer 

reporting agency as defined in section 

603(f) of the FCRA, 15 U.S.C. 1681a(f). 

At least one commenter noted that 

where Congress restricted veterans’ 

medical debt on consumer reports, the 

provision was limited to the NCRAs as 

defined under section 603(p) of the 

FCRA.149

The CFPB is finalizing § 1022.38(a) as 

proposed. Section 1022.38(a) references 

the definition of consumer reporting 

agency in FCRA section 603(f) and 

reflects the coverage of existing 

Regulation V. Limiting the scope of 

§ 1022.38 to the NCRAs would not make 

sense because the permissible purpose 

provision in FCRA section 604(a)(3)(A), 

which supports the intervention, 

applies to consumer reporting agencies 

as that term is defined in FCRA section 

603(f). Further, applying § 1022.38 to all 

consumer reporting agencies would 

facilitate compliance with the creditor 

prohibition in § 1022.30(b) when 

creditors use consumer reports from 

consumer reporting agencies that are not 

NCRAs. 

Proposed § 1022.38(b)(1) 

Proposed § 1022.38 would have 

permitted a consumer reporting agency 

to include medical debt information in 

a consumer report furnished to a 

creditor for credit eligibility purposes 

only if certain criteria are met. One 

criterion, in proposed § 1022.38(b)(1), 

was that the consumer reporting agency 

has reason to believe the creditor is not 

prohibited from using the medical debt 

information under § 1022.30. 

Some commenters stated that the 

reason to believe standard in proposed 

§ 1022.38(b)(1) is too loose or vague of 

a standard to adequately protect 

consumers, noting that the same 

language in FCRA section 604(a) has 

been interpreted by courts to absolve 

consumer reporting agencies of liability 

if the user merely avers a permissible 

use. Commenters identified various 

solutions, including requiring consumer 

reporting agencies to have strict 

procedures to prevent including 

medical debt in a report unless the user 

is permitted to use medical information 

under § 1022.30; replacing the reason to 

believe standard with a reasonable 

belief or actual knowledge standard; 

removing proposed § 1022.38(b)(1); or 

adding an objective criterion to the 

reason to believe standard. 

Another commenter stated that the 

proposal to restrict the sharing of 

medical debt information is not 

necessary because, if the CFPB prohibits 

creditors from considering medical debt 

in making credit decisions, then 

consumer reporting agencies will 

neither collect nor share that 

information with creditors. 

The CFPB is finalizing § 1022.38(b)(1) 

as proposed. The reason to believe 

standard in § 1022.38(b)(1) is derived 

from the permissible purpose 

requirement in FCRA section 

604(a)(3)(A). FCRA section 604(a)(3)(A) 

states that one of the circumstances 

under which a consumer reporting 

agency may furnish a consumer report 

is to a person which it has reason to 

believe intends to use the information in 

connection with a credit transaction 

involving the consumer on which the 

information is to be furnished and 

involving the extension of credit to the 

consumer. With respect to the comment 

about this provision being unnecessary 

in light of the prohibition on creditors’ 

consideration of medical debt 

information in credit decisions, this 

intervention will facilitate compliance 

with § 1022.30 by ensuring that 

consumer reporting agencies do not 

share information with creditors that 

creditors are prohibited from obtaining 

or using. If, in response to the 

prohibition on creditors obtaining or 

using medical debt information in 

§ 1022.30, consumer reporting agencies 

would not collect or share consumers’ 

medical debt information as the 

commenter asserts, then there should be 

no compliance burden or industry 

concerns associated with this provision. 

Proposed § 1022.38(b)(2) 

The second criterion, in proposed 

§ 1022.38(b)(2), was that the consumer 

reporting agency is not otherwise 

prohibited from furnishing to the 

creditor a consumer report containing 

the medical debt information, including 

by a State law that prohibits furnishing 

to the creditor a consumer report 

containing medical debt information. 

The purpose of proposed § 1022.38(b)(2) 

was to make clear that proposed 

§ 1022.38 does not override any other 

prohibition regarding the furnishing of 

consumer reports. 

At least one commenter stated that the 

CFPB failed to comply with Federal 

regulations governing incorporation by 

reference. And relatedly, the commenter 

noted that incorporating 50 different 

State laws into Federal law undermines 

the FCRA’s goal of uniform creditreporting standards. 

Some commenters asserted that State 

laws that regulate what information may 

or may not be included on a consumer 

report are preempted by the FCRA and 

that the proposal violates the Tenth 

Amendment because CFPB does not 

have the authority to enforce State laws 

(or determine whether or not they are 

preempted by the FCRA). The 

commenters stated that proposed 

§ 1022.38(b)(2) would have the effect of 

making a violation of State law into a 

violation of this rule. 

Other commenters expressed support 

for proposed § 1022.38(b)(2). These 

commenters stated that Regulation V 

should not be interpreted to allow 

consumer reporting agencies to violate 

State laws governing medical 

information, and appreciated the CFPB’s 

acknowledgment that states can 

implement additional consumer 

protections. 

The CFPB is finalizing § 1022.38(b)(2) 

with amendments. The criterion set out 

in final § 1022.38(b)(2) requires the 

consumer reporting agency to have 

reason to believe the creditor is not 

otherwise legally prohibited from 

obtaining or using the medical debt 

information, including by a State law 

that prohibits a creditor from obtaining 

or using medical debt information. The 

CFPB is not, in final § 1022.38(b)(2), 

incorporating by reference State laws, 

deeming a violation of State law to be 

a violation of the FCRA, or otherwise 

affecting the enforcement of State laws, 

as some commenters asserted the 

proposed language would have done. As 

revised, final § 1022.38(b)(2) merely 

ensures that, independent of the 

prohibition in § 1022.30, a consumer 

reporting agency would generally still 

be prohibited from furnishing a 

consumer report containing medical 

debt information to a creditor who is 

legally prohibited from obtaining or 

using the medical debt information. 

FCRA section 604(a)(3)(A) permits a 

consumer reporting agency to furnish a 

consumer report to a person which it 

has reason to believe intends to use the 

information in connection with a credit 

transaction involving the consumer. 

Under the final rule, a consumer 

reporting agency would not have reason 

to believe that a creditor who is legally 

prohibited from obtaining or using 

medical debt information intends to use 

that information in connection with a 

credit transaction. Laws within the 

scope of § 1022.38(b)(2) include 

applicable State laws that prohibit a 


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150See 87 FR 41042 (July 11, 2022) (describing 

the FCRA’s limited preemptive scope). Whether the 

FCRA or any other Federal law preempts any 

particular State law is beyond the scope of this 

rulemaking. 

creditor from obtaining or using medical 

debt information.150

Requests To Add Provisions 

Some commenters requested that the 

CFPB add additional provisions to 

§ 1022.38. For example, one commenter 

requested a safe harbor for credit unions 

that are unintentionally in possession of 

information that they are no longer 

permitted to obtain or use. The 

commenter was concerned about the 

security and operational risk that would 

be experienced by a credit union if a 

consumer reporting agency furnishes 

medical debt information to a credit 

union that the credit union is not 

permitted to obtain or use. 

Alternatively, the commenter 

recommended that the CFPB not finalize 

the proposed rule. 

A number of commenters suggested 

that the CFPB expand the rule to also 

prohibit the inclusion of medical debt 

on consumer reports used for 

employment or tenant screening. Other 

commenters suggested that the CFPB 

expand the rule to prohibit the 

inclusion of medical debt on consumer 

reports altogether. One commenter 

requested that the CFPB prohibit 

consumer reporting agencies from 

reporting medical debt incurred by 

individuals under the age of 18. The 

commenter also requested that the CFPB 

prohibit data furnishers from reporting 

to consumer reporting agencies medical 

debts of minors, particularly those 

under state wardship. 

A commenter suggested that the CFPB 

amend the rule to require consumer 

reporting agencies to screen medical 

information for compliance with already 

existing non-discrimination languageaccess protections. The commenter 

stated that such an amendment would 

incentivize the industry to safeguard 

health consumers. 

A commenter recommended that the 

CFPB require consumer reporting 

agencies to establish a robust appeal 

process for consumers to address 

complaints and grievances should 

consumer reporting agencies 

erroneously or purposefully include 

their medical debt information in 

consumer reports provided to potential 

creditors. 

One commenter requested that the 

CFPB monitor heath care providers’ 

billing, pricing, and collection practices, 

to make sure consumers are not paying 

more or denied care under the new 

rules. 

For the reasons discussed herein, the 

CFPB is not revising proposed § 1022.38 

in response to these requests. The 

commenter’s concern prompting a 

request for a safe harbor is addressed by 

the statutory rule of construction in 

§ 1022.30(c)(1). Section 1022.30(c)(1) 

provides that a creditor does not obtain 

medical information in violation of the 

prohibition if it receives medical 

information pertaining to a consumer in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit without specifically 

requesting medical information. The 

CFPB’s proposed removal of the 

example in § 1022.30(c)(3)(iii), which 

describes a creditor receiving medical 

information on a consumer report 

furnished by a consumer reporting 

agency, may have created confusion. 

The CFPB proposed to remove this 

example because the proposed 

amendments would have limited the 

circumstances under which a consumer 

reporting agency could permissibly 

furnish a consumer report containing 

medical debt information, rendering the 

example less instructive and potentially 

confusing. Even though the CFPB is 

finalizing the removal of 

§ 1022.30(c)(3)(iii), it would still be the 

case that if a creditor receives, on a 

consumer report, unsolicited medical 

debt information, the creditor would not 

have obtained medical information in 

violation of the prohibition as provided 

by the statutory rule of construction in 

existing § 1022.30(c)(1). 

The CFPB declines to expand the rule 

to cover medical debt on consumer 

reports used for employment or tenant 

screening, or for all uses. The requests 

to cover other uses or to prohibit the 

reporting of medical debt information 

based on a consumer’s age fall outside 

the scope of this rule. The request to 

prohibit data furnishers from reporting 

to consumer reporting agencies medical 

debts of minors also falls outside the 

scope of this rule. This final rule merely 

removes an exception, promulgated 

under FCRA section 604(g)(2) and (5), 

that permitted creditors to obtain and 

use a consumer’s medical information 

in connection with a determination of 

eligibility, or continued eligibility, for 

credit. Under the final rule, a creditor 

will no longer be able to obtain or use 

medical information related to a 

consumer’s medical debt in connection 

with any determination of the 

consumer’s eligibility, or continued 

eligibility, for credit, unless one of the 

specific exceptions in final § 1022.30(e) 

applies. Relatedly, final § 1022.38 

addresses how a consumer reporting 

agency’s medical debt information 

reporting responsibilities are impacted 

when creditors are prohibited from 

obtaining or using medical debt 

information. Therefore, final § 1022.38 

governs only consumer reporting 

agencies’ actions and covers only 

medical debt information contained in a 

consumer report furnished to a creditor 

for credit eligibility purposes. 

The commenter’s request to require 

consumer reporting agencies to screen 

medical information for compliance 

with already existing nondiscrimination language-access 

protections is also outside the scope of 

this targeted rulemaking. 

The CFPB appreciates the suggestion 

to require consumer reporting agencies 

to establish a robust appeals process for 

consumers to address complaints and 

grievances. The CFPB is not 

implementing such a process as part of 

this rulemaking but will monitor 

consumer reporting agencies’ 

compliance with § 1022.38. 

The CFPB acknowledges the 

suggestion to monitor health care 

providers’ billing, pricing, and 

collection practices, to make sure 

consumers are not paying more or 

denied care once the rule is 

implemented. The CFPB currently 

engages in the monitoring of markets 

within its authority and will continue to 

do so. 

Alternatives 

The CFPB considered alternatives to 

proposed § 1022.38, including 

mandating a delay in the furnishing and 

reporting of medical debt for a 

particular period of time, and not 

reporting or furnishing medical debt 

below a particular dollar amount; and 

requiring consumer reporting agencies 

and medical information furnishers, 

upon receiving a dispute, to conduct an 

independent investigation to certify that 

a disputed medical debt is accurate and 

not subject to pending insurance 

disputes. The CFPB solicited comment 

on these identified alternatives. 

Some of the alternatives considered 

by the CFPB would have been similar to 

the voluntary reporting changes made 

by the NCRAs in 2022 and 2023, but 

would have had an expanded scope (i.e., 

apply to all consumer reporting 

agencies) and permanent duration (i.e., 

be issued as an amendment to 

Regulation V). Some commenters noted 

the similarities and stated that the 

NCRA reporting changes are sufficient 

to address the concerns raised by the 

CFPB. 

At least one commenter stated that the 

proposal fails to consider less expensive 

alternatives such as implementing a 


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3306 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

151SBREFA Outline at 19; 89 FR 51682, 51695 

(June 18, 2024). 

152See, e.g., https://www.consumerfinance.gov/ 

about-us/newsroom/cfpb-addresses-inaccuratebackground-check-reports-and-sloppy-credit-filesharing-practices/ (background check AO); https:// 

files.consumerfinance.gov/f/documents/cfpb_nameonly-matching_advisory-opinion_2021-11.pdf 

(name-only matching AO). 

153See https://mobile.reginfo.gov/public/do/ 

eAgendaViewRule?pubId=202404&RIN=3170-AB24 

(Unified Agenda entry listing disputes as long-term 

action item). 

154See, e.g., https://files.consumerfinance.gov/f/ 

documents/cfpb_supervisory-highlights_issue-32_

2024-04.pdf. 

155See, e.g., https://www.consumerfinance.gov/ 

about-us/newsroom/cfpb-orders-td-bank-to-pay-28- 

million-for-breakdowns-that-illegally-tarnishedconsumer-credit-reports/ (TD Bank); https://

www.consumerfinance.gov/about-us/newsroom/ 

cfpb-orders-toyota-motor-credit-to-pay-60-millionfor-illegal-lending-and-credit-reporting-misconduct/ 

(Toyota Motor Credit); https://

www.consumerfinance.gov/about-us/newsroom/ 

cfpb-ftc-take-actions-against-transunion-illegalrental-background-check-and-credit-reportingpractices/ (TransUnion). 

156See, e.g., https://www.consumerfinance.gov/ 

about-us/blog/the-law-requires-companies-todelete-disputed-unverified-information-fromconsumer-reports/ (Suluki); https://

www.consumerfinance.gov/compliance/amicus/ 

briefs/nelson-v-experian-information-solutions-inc/ 

(Nelson). 

157 85 FR 76734 (Nov. 30, 2020). 

waiting period before medical debt can 

be reported. 

Several commenters offered various 

suggestions regarding reporting 

accuracy and dispute procedures in 

response to the CFPB’s request for 

comment on alternatives to the 

proposal. For example, commenters 

suggested that the CFPB allow only 

legitimate and verified debts to be 

reported to consumer reporting agencies 

(i.e., establish guidelines for medical 

billing companies, healthcare providers, 

and collection agencies for reporting 

medical debt); use enforcement actions 

on businesses that provide inaccurate 

information; improve the accuracy and 

transparency of the medical billing 

process; and improve the consumer 

dispute resolution process. 

Commenters also suggested a number 

of other alternatives to the proposal. For 

example, at least one commenter 

suggested that the CFPB permit positive 

credit reporting of medical debt 

information. Another commenter 

expressed a somewhat opposing 

position, stating that the CFPB should 

have considered allowing for the 

deletion of only paid medical debt from 

consumer reports. 

A commenter suggested that the CFPB 

permit only the account owner, such as 

hospitals or medical debt purchasers, to 

report medical debt to consumer 

reporting agencies, rather than 

collection agencies, to reduce consumer 

distress and improve the accuracy of 

balance audits. Other commenters 

suggested that the CFPB prohibit 

furnishers from reporting a medical debt 

as long as the consumer makes 

minimum payments toward the debt. 

A commenter suggested the CFPB 

could instead strengthen Regulation F to 

improve communication protocols to 

ensure that they are clear, 

compassionate, and supportive to 

consumers. 

Commenters suggested that the CFPB 

differentiate between patients who are 

unwilling to pay for the services 

provided and those who are genuinely 

unable to do so. For example, a 

commenter suggested that the CFPB 

could require a doctor or medical 

practice to have the patient or guarantor 

fill out a form and if they meet certain 

metrics, the debt should not be reported. 

Another commenter suggested the CFPB 

allow consumer reporting agencies to 

report medical debt incurred by 

commercially insured health plan 

beneficiaries for cost-sharing obligations 

on insurer or health plan adjudicated 

amounts of between $100–1,000. 

One commenter suggested that, in lieu 

of finalizing the proposed rule, the 

CFPB should promote financial literacy 

among consumers regarding medical 

debt and provide better resources for 

consumers to understand their medical 

bills. 

One commenter suggested that the 

CFPB allow medical debt to remain on 

consumer reports, but give it much less 

weight than other debts. 

The CFPB is not adopting any 

alternatives to the proposal. As 

discussed in the proposed rule and the 

SBREFA outline, and noted above, the 

CFPB did consider mandating a delay in 

the furnishing and reporting of medical 

debt for a particular period of time, 

which would have been similar to one 

of the NCRA’s recent reporting 

changes.151 However, the CFPB has 

determined that these types of changes 

by themselves do not do enough to 

protect the privacy of consumers’ 

medical data during the credit 

underwriting process, as mandated by 

the FCRA. 

The CFPB also notes that consumer 

reporting agencies are already subject to 

accuracy and dispute resolution 

requirements and the CFPB has played 

an active role in this space. For 

example, FCRA section 607(b) requires 

consumer reporting agencies to follow 

reasonable procedures to assure 

maximum possible accuracy of the 

information concerning the consumer. 

In addition, the CFPB has published 

multiple advisory opinions on FCRA 

issues, including on accuracy 

requirements,152 and the CFPB is 

continuing to consider a possible 

rulemaking to improve the dispute 

process for consumers under the 

FCRA.153 The CFPB also has engaged in 

supervision 154 and enforcement 155

activity with respect to consumer 

reporting agencies and furnishers to 

ensure their compliance with the 

FCRA’s accuracy and dispute 

requirements, and has filed multiple 

amicus briefs relating to the FCRA’s 

accuracy and dispute requirements.156

As discussed in part IV.B, Removal of 

the Financial Information Exception to 

the Creditor Prohibition on Obtaining or 

Using Medical Information, the 

available evidence suggests that 

creditors can underwrite sufficiently to 

maintain a responsible lending 

operation without paid or unpaid 

medical debt information. The CFPB 

therefore concludes that an exception 

allowing creditors to consider paid 

medical debt information is not 

necessary or appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs. In 

addition, permitting paid or unpaid 

medical debt information to be included 

on consumer reports furnished to 

creditors would undermine the 

consumer privacy protections provided 

by this rule. With respect to the 

comment supporting positive credit 

reporting, the CFPB does not have any 

evidence that paid medical debt 

collection items are treated positively in 

any lending models. 

The CFPB declines to amend the 

scope of this rule to prohibit certain 

parties from furnishing to consumer 

reporting agencies medical debt 

information. This rule removes an 

exception that pertains to creditors’ use 

of medical debt information, and 

addresses how consumer reporting 

agencies’ responsibilities, with respect 

to medical debt information, are 

impacted by the removal of the financial 

information exception now that 

creditors generally do not have a 

permissible purpose for consumer 

reports containing medical debt 

information. 

With respect to the comment 

suggesting that CFPB instead strengthen 

Regulation F, the CFPB notes that it has 

done substantial work to strengthen 

Regulation F. In October 2020, the CFPB 

issued a final rule implementing the 

Fair Debt Collection Practices Act 

(FDCPA), addressing topics such as 

communications in connection with 

debt collection and prohibitions on 

harassment or abuse, false or misleading 

representations, and unfair practices in 

debt collection.157 In December 2020, 

the CFPB issued a final rule amending 


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158 86 FR 5766 (Jan. 19, 2021). 

159 89 FR 80715 (Oct. 4, 2024). 

160 15 U.S.C. 1681b(a) (providing that, ‘‘[s]ubject 

to subsection (c), any consumer reporting agency 

may furnish a consumer report under the following 

circumstances and no other’’). 

161 Id. Other sections of the FCRA identify 

additional limited circumstances under which 

consumer reporting agencies are permitted or 

required to disclose certain information to 

government agencies. See 15 U.S.C. 1681f, 1681u, 

1681v; see also, e.g., FTC v. Manager, Retail Credit 

Co., Miami Beach Branch Off., 515 F.2d 988, 994– 

95 (D.C. Cir. 1975) (holding that 15 U.S.C. 1681s(a) 

authorizes the FTC to obtain consumer reports in 

FCRA enforcement investigations). Further, the 

Debt Collection Improvement Act of 1996, Pub. L. 

104–134, 110 Stat. 1321, tit. III, section 31001(m)(1), 

allows the head of an executive, judicial, or 

legislative agency to obtain a consumer report 

under certain circumstances relating to debt 

collection. See 31 U.S.C. 3711(h). 

162 15 U.S.C. 1681b(a)(3)(A). 

163 15 U.S.C. 1681b(a)(3)(A). 

Regulation F to provide additional 

requirements regarding validation 

information and disclosures provided at 

the outset of debt collection 

communications, prohibit suits and 

threats of suits regarding time-barred 

debt, and identify actions that must be 

taken before a debt collector may report 

information about a debt to consumer 

reporting agencies.158 Most recently, in 

October 2024, the CFPB issued an 

advisory opinion to remind debt 

collectors of their obligation to comply 

with the FDCPA and Regulation F’s 

prohibitions on false, deceptive, or 

misleading representations or means in 

connection with the collection of any 

medical debt and unfair or 

unconscionable means to collect or 

attempt to collect any medical debts.159

The CFPB also declines to implement 

the suggestion to differentiate between 

consumers who are unwilling to pay for 

the services provided and those who are 

genuinely unable to do so. These types 

of policies would undermine the 

consumer privacy protections provided 

by this rule, impose significant 

compliance burdens, and be difficult to 

administer and enforce. 

The CFPB has done considerable 

work to promote financial literacy, and 

will continue to do so. However, 

consumer education will not address 

the principal concern solved by this 

rulemaking—that information about 

medical debt in credit underwriting is 

not necessary and appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs, nor 

consistent with Congress’s intent to 

restrict the use of medical information 

for inappropriate purposes, and as a 

result, does not warrant an exception to 

the medical information privacy 

protections established by Congress. 

Finally, the CFPB declines the 

suggestion to allow medical debt to 

remain on consumer reports, but give it 

much less weight than other debts. Not 

only would such a policy be difficult to 

administer and enforce, but it also does 

not address the principal concern 

solved by this rulemaking—that 

information about medical debt in credit 

underwriting is not necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs, nor 

consistent with Congress’s intent to 

restrict the use of medical information 

for inappropriate purposes, and as a 

result, does not warrant an exception to 

the medical information privacy 

protections established by Congress. 

Final Rule 

For the reasons discussed in this part 

IV.C, Limits on a Consumer Reporting 

Agency’s Disclosure of Medical Debt 

Information, the CFPB is finalizing 

§ 1022.38 with amendments to 

§ 1022.38(b)(2). New § 1022.38 to 

subpart D addresses how a consumer 

reporting agency’s medical debt 

information reporting responsibilities 

are impacted when creditors are 

prohibited from obtaining or using 

medical debt information. A consumer 

reporting agency is permitted to include 

medical debt information in a consumer 

report furnished to a creditor for credit 

eligibility purposes only if the consumer 

reporting agency (1) has reason to 

believe the creditor intends to use the 

medical debt information in a manner 

not prohibited by § 1022.30; and (2) has 

reason to believe the creditor is not 

otherwise legally prohibited from 

obtaining or using the medical debt 

information, including by a State law 

that prohibits a creditor from obtaining 

or using medical debt information. 

Relatedly, the CFPB is finalizing the 

proposed removal of the example in 

§ 1022.30(c)(3)(iii) which describes a 

creditor receiving medical information 

on a consumer report furnished by a 

consumer reporting agency. 

FCRA section 604, entitled 

Permissible purposes of consumer 

reports, identifies an exclusive list of 

permissible purposes for which 

consumer reporting agencies may 

provide consumer reports.160 The 

statute states that a consumer reporting 

agency may furnish consumer reports 

under these circumstances ‘‘and no 

other.’’ 161 One such circumstance, 

covered by FCRA section 604(a)(3)(A), 

permits a consumer reporting agency to 

furnish a consumer report to a person 

which it has reason to believe ‘‘intends 

to use the information in connection 

with a credit transaction involving the 

consumer on whom the information is 

to be furnished and involving the 

extension of credit to, or review or 

collection of an account of, the 

consumer’’ (credit permissible 

purpose).162

Final § 1022.38(b)(1) addresses how 

consumer reporting agencies’ 

responsibilities under FCRA section 

604(a)(3)(A) are impacted by the 

removal of the financial information 

exception and related amendments to 

§ 1022.30. As discussed in part IV.B, 

Removal of the Financial Information 

Exception to the Creditor Prohibition on 

Obtaining or Using Medical 

Information, the CFPB is finalizing the 

proposal to remove the financial 

information exception in § 1022.30(d). 

The result of removing the financial 

information exception is that a creditor 

will be prohibited from obtaining or 

using medical debt information—a 

subcategory of medical information—in 

connection with any determination of 

the consumer’s eligibility for credit 

under the general prohibition in 

§ 1022.30(b), unless a specific exception 

for obtaining and using medical 

information in § 1022.30(e) applies to 

the medical debt information. Under the 

final rule, a creditor who is legally 

prohibited from obtaining or using 

medical debt information in connection 

with a determination of the consumer’s 

eligibility or continued eligibility for 

credit does not have a permissible 

purpose for a consumer report 

containing that information; the creditor 

could not plausibly intend to use that 

information in connection with a credit 

transaction. Similarly, a consumer 

reporting agency would not have reason 

to believe that a creditor who is legally 

prohibited from obtaining or using the 

medical debt information intends to use 

the information in connection with a 

credit transaction involving the 

consumer.163 The CFPB therefore 

finalizes § 1022.38(b)(1) to explain the 

impact of the credit permissible purpose 

provision in FCRA section 604(a)(3)(A) 

on the FCRA section 604(g)(2) creditor 

prohibition as implemented in final 

§ 1022.30. 

The same is true under the final rule 

for any other legal prohibition under 

which creditors may neither obtain nor 

use medical debt information. Thus, the 

CFPB determines that amending 

proposed § 1022.38(b)(2) to include a 

similar provision to final 

§ 1022.38(b)(1), to cover other scenarios 

in which a creditor is legally prohibited 

from obtaining or using medical debt 

information, is warranted. Regardless of 

the source of the prohibition, under the 

final rule, if a creditor is legally 


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164See CFPA section 1088(a)(10)(E) (15 U.S.C. 

1681s(e)). 

165See 15 U.S.C. 1681s(e)(1). 

166See 15 U.S.C. 1681s–2(a)(9). 

167Equifax, First Changes to Reporting of Medical 

Collection Debt Roll Out July 1, 2022 (July 1, 2022), 

https://www.equifax.com/newsroom/all-news/-/ 

story/first-changes-to-reporting-of-medicalcollection-debt-roll-out-july-1-2022; Experian, First 

Changes to Reporting of Medical Collection Debt 

Roll Out July 1, 2022 (July 1, 2022), https://

www.experianplc.com/newsroom/press-releases/ 

2022/first-changes-to-reporting-of-medicalcollection-debt-roll-out-july-1-2022; TransUnion, 

First Changes to Reporting of Medical Collection 

Debt Roll Out July 1, 2022 (July 1, 2022), https:// 

newsroom.transunion.com/first-changes-toreporting-of-medical-collection-debt-roll-out-july-1- 

2022/; PR Newswire, Equifax, Experian and 

TransUnion Remove Medical Collections Debt 

Under $500 From U.S. Credit Reports (Apr. 11, 

2023), https://www.prnewswire.com/news-releases/ 

equifax-experian-and-transunion-remove-medicalcollections-debt-under-500-from-us-credit-reports301793769.html. 

168See 15 U.S.C. 1681(a)(4). 169SBREFA Report at 36. 

prohibited from obtaining or using 

medical debt information, a creditor 

does not have a permissible purpose for 

a consumer report containing that 

information; a creditor cannot plausibly 

intend to use that information in 

connection with a credit transaction. 

Final § 1022.38(b)(2) explains the 

impact of the credit permissible purpose 

provision in FCRA section 604(a)(3)(A) 

on any legal prohibition on creditors 

obtaining or using medical debt 

information. Final § 1022.38(b)(2) 

ensures that, independent of the 

prohibition in § 1022.30, a consumer 

reporting agency would generally still 

be prohibited from furnishing a 

consumer report containing medical 

debt information to a creditor who is 

legally prohibited from obtaining or and 

using the medical debt information. 

Section 621(e) of the FCRA authorizes 

the CFPB to issue regulations as 

‘‘necessary or appropriate to administer 

and carry out the purposes and 

objectives of [the FCRA], and to prevent 

evasions thereof or to facilitate 

compliance therewith.’’ 164 The CFPB 

has determined that the limits on a 

consumer reporting agency’s disclosure 

of a consumer’s sensitive medical debt 

information to a creditor who is legally 

prohibited from obtaining or using such 

information are necessary or appropriate 

to administer and carry out the purposes 

and objectives of the FCRA, and to 

prevent evasions or to facilitate 

compliance.165 In particular, the 

limitations on consumer reporting 

agencies in § 1022.38(b)(1) would 

markedly facilitate compliance for 

creditors by ensuring that creditors do 

not receive from consumer reporting 

agencies medical debt information that 

they are not permitted to obtain or use 

under FCRA section 604(g)(2) and 

§ 1022.30. If consumer reporting 

agencies continued to furnish to 

creditors, in connection with eligibility 

determinations, consumer reports 

containing medical debt information, 

creditors would need to screen out such 

information to comply with the creditor 

prohibition in FCRA section 604(g)(2) 

and § 1022.30. Screening out medical 

debt information may be cumbersome 

for creditors, especially those that use 

automated underwriting processes. On 

the other hand, consumer reporting 

agencies could more easily implement 

automatic processes that remove 

medical debt information provided by 

medical information furnishers from 

those reports that are requested for 

credit eligibility determinations because 

medical information furnishers are 

required to identify themselves to 

consumer reporting agencies.166 At least 

one commenter questioned this 

assertion, but the CFPB notes that the 

NCRAs have recently implemented 

reporting changes to remove certain 

medical debt information from 

consumer reports and therefore have 

shown they are capable of creating such 

infrastructure.167

The CFPB has also determined that 

§ 1022.38(b) is necessary and 

appropriate to administer and carry out 

the purposes and objectives of the 

FCRA, especially that of ‘‘need[ing] to 

insure that consumer reporting agencies 

exercise their grave responsibilities with 

fairness, impartiality, and a respect for 

the consumer’s right to privacy.’’ 168

Medical information is uniquely 

sensitive and intimate information, and 

it thus advances the purposes and 

objectives of the FCRA to protect 

consumers’ privacy by limiting the 

circumstances under which consumer 

reporting agencies may furnish medical 

debt information. 

D. Example To Comply With Applicable 

Requirements of Local, State, or Federal 

laws 

Proposal 

During the SBREFA process, several 

financial institutions, furnisher small 

entity representatives, and debt 

collectors expressed concern about how 

the proposal under consideration to 

remove the financial information 

exception in § 1022.30(d) and prohibit 

consumer reporting agencies from 

including medical debt collections 

tradelines on consumer reports 

furnished to creditors for credit 

eligibility determinations would interact 

with repayment ability determination 

requirements under the Truth in 

Lending Act (TILA) and Regulation Z 

for mortgage loans and credit cards.169

Stakeholders stated that these laws 

require creditors to consider all of a 

consumer’s current debt obligations, 

such that the proposal under 

consideration would impede their 

ability to make the required 

determination in compliance with 

Federal law. A small entity 

representative recommended that the 

CFPB consider (1) stating what creditors 

should tell consumers regarding 

whether medical debt information 

should be disclosed on applications for 

credit, and (2) providing to creditors 

information about any limitations on 

financial institutions’ use of consumerprovided medical information for 

underwriting. 

In the NPRM, the CFPB proposed to 

eliminate current § 1022.30(d). The 

CFPB preliminarily found that the 

financial information exception was not 

necessary and appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs 

(including administrative verification 

purposes) as set forth in current 

§ 1022.30(d). However, the CFPB 

preliminarily determined to not 

eliminate other exceptions, including 

the exception in § 1022.30(e)(1)(ii) for 

medical information necessary to 

comply with applicable local, State, or 

Federal laws, such as Regulation Z’s 

ability-to-repay or pay requirements. In 

response to comments during the 

SBREFA process, the CFPB proposed an 

example in proposed § 1022.30(e)(6) to 

direct creditors and card issuers that are 

creditors regarding how to obtain and 

use medical information provided by 

the consumer in compliance with TILA 

and Regulation Z, as set forth in 

§ 1022.30(e)(1)(ii), for purposes of 

compliance with the ability-to-repay 

rule under § 1026.43(c) for closed-end 

mortgages, the repayment ability rule 

under § 1026.34(a)(4) for open-end, 

high-cost mortgages, and the ability-topay rule under § 1026.51(a) for openend (not home-secured) credit card 

accounts. 

Under existing § 1022.30(c)(1), a 

creditor does not violate the prohibition 

on obtaining medical information in 

§ 1022.30(b) if the creditor receives 

medical information pertaining to a 

consumer in connection with the 

creditor’s determination of the 

consumer’s eligibility for credit without 

specifically requesting such 

information. For example, if a consumer 

applies for a mortgage loan and the 

creditor has not specifically requested 

medical information on the application, 

but asks for all current debts or 


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170See, e.g., Regulation Z comment 51(a)(1)(i)–7 

(‘‘A card issuer may consider the consumer’s 

current obligations based on information provided 

by the consumer or in a consumer report.’’); see also 

§ 1026.43(c)(3)(iii) (‘‘[I]f a creditor relies on a 

consumer’s credit report to verify a consumer’s 

current debt obligations and a consumer’s 

application states a current debt obligation not 

shown in the consumer’s credit report, the creditor 

need not independently verify such an obligation.’’) 

obligations, and the consumer selfdiscloses by providing medical 

information in the form of a monthly 

medical payment plan, the creditor does 

not violate the prohibition on obtaining 

medical information. In this 

circumstance, under § 1022.30(e)(1)(ii), 

the creditor would be permitted to use 

this information by considering the 

existence and the amount of the medical 

payment plan as required in considering 

certain factors under § 1026.43(c)(2), 

such as the current debt obligations, 

consumer’s monthly debt-to-income 

ratio, and residual income, in making 

the repayment ability determination 

required under § 1026.43(c)(1). 

Proposed § 1022.30(e)(6) also would 

have provided that, in accordance with 

§ 1026.43(c)(3)(iii), the creditor would 

not be required to independently verify 

the existence and amount of the 

consumer’s monthly medical payment 

plan if the consumer’s application states 

a current debt, even if that debt is not 

shown in the consumer report. This is 

also consistent with Regulation Z 

comment 43(c)(3)–6 describing a 

situation where a consumer, through the 

application, provides a creditor with 

information on a debt obligation that is 

not listed on a consumer report. 

Therefore, the creditor would not 

violate the prohibition on obtaining or 

using medical information in 

§ 1022.30(b) if the creditor obtains and 

uses medical information disclosed by 

the consumer on their application as an 

ongoing payment obligation in response 

to a general inquiry about debts or 

obligations. 

Proposed § 1022.30(e)(6) would have 

explained that a creditor (for mortgage 

loans) or card issuer (for credit cards) 

relying on the specific exception for 

compliance with applicable laws at 

§ 1022.30(e)(1)(ii) is not permitted to 

obtain or use medical information from 

a consumer report. In the proposed rule, 

the CFPB preliminarily determined that 

the creditor or card issuer can comply 

with the applicable laws using the 

information provided by the consumer 

on the application, including any 

medical information received from the 

consumer in response to a general 

inquiry about debts or obligations; 

therefore, it would not be necessary or 

appropriate for a creditor or card issuer 

to use medical information contained in 

a consumer report in order to comply 

with the applicable laws. As explained 

in part IV.C, Limits on a Consumer 

Reporting Agency’s Disclosure of 

Medical Debt Information, the CFPB 

also believed it would be 

administratively difficult for consumer 

reporting agencies to determine which 

information in a consumer’s credit file 

is necessary for a particular creditor’s 

compliance with the requirement to 

make a repayment ability determination 

and which information is not. In the 

context of creditors’ obligations to make 

repayment ability determinations under 

Regulation Z, determining the medical 

debt information that would be relevant 

to ability-to-repay or pay rules, as well 

as the administrative burdens of 

segmenting this information out, is 

impractical for a consumer reporting 

agency to undertake. For the reasons 

discussed in the NPRM, the CFPB 

preliminarily found that preventing 

creditors from purposefully obtaining— 

and under new § 1022.38, consumer 

reporting agencies from furnishing— 

medical information on consumer 

reports for credit eligibility purposes 

will both ease burdens on consumer 

reporting agencies and prevent attempts 

by creditors to evade the rule by 

requesting consumer reports in the 

hopes of learning indirectly the same 

sensitive medical information the rule 

prohibits creditors from soliciting 

directly under the guise of compliance 

with the ability-to-repay or pay rules. 

In the proposed rule, the CFPB 

preliminarily determined that creditors 

would not need to begin obtaining 

medical information from consumers 

under the proposed rule if they do not 

already do so. For example, the CFPB 

did not intend the NPRM to change any 

existing law or guidance regarding the 

extent to which creditors may rely on 

consumer reports to assess consumers’ 

current obligations in complying with 

repayment ability determination 

requirements.170

The CFPB requested feedback on this 

aspect of the proposed rule and whether 

that proposal would assist a creditor or 

card issuer in making its repayment 

ability determination under TILA/ 

Regulation Z. The CFPB also sought 

comment on whether amendments 

should be made to § 1022.30(e)(1)(ii) to 

reflect the language in proposed 

§ 1022.30(e)(6)—providing that a 

creditor or card issuer may not obtain or 

use medical information from a 

consumer reporting agency to comply 

with the ability-to-repay rule under 12 

CFR 1026.43(c) for closed-end 

mortgages, the repayment ability rule 

under 12 CFR 1026.34(a)(4) for openend, high-cost mortgages, or the abilityto-pay rule under 12 CFR 1026.51(a) for 

open-end (not home-secured) credit 

card accounts—or if the language in 

proposed § 1022.30(e)(6) is sufficient to 

explain how creditors can comply with 

the repayment ability determination 

requirements under TILA/Regulation Z. 

Comments 

Many industry commenters and 

several individual commenters 

submitted comments indicating that the 

NPRM contradicts TILA’s and 

Regulation Z’s ability-to-repay 

requirements. One industry commenter 

asserted that the proposed rule is likely 

to create compliance challenges with 

regard to TILA and Regulation Z, which 

require creditors to make a reasonable, 

good faith determination of a 

consumer’s ability to repay any 

residential mortgage loans. Another 

industry commenter asserted that the 

CFPB has the responsibility to create 

rules regarding ability-to-repay 

requirements for mortgage lending in 

TILA and the CFPB’s own rules require 

among other things, that a creditor 

consider all of a borrower’s outstanding 

liabilities at the time of loan origination. 

This commenter asserted that (1) the 

NPRM places the burden of reporting 

medical debt on the consumer, who 

would be falsely representing their 

application if the information is 

material and omitted, yet the CFPB is 

intending to protect consumers from 

this disclosure by banning it from the 

consumer reports furnished by the 

national consumer reporting agencies; 

and (2) under the CFPB’s proposed rule, 

creditors would have no way of 

verifying whether medical debt 

liabilities disclosed by a consumer (or 

lack thereof) were in fact accurate. 

Another industry commenter asserted 

that the NPRM would conflict with 

TILA, which requires the reasonable 

and good-faith determination that the 

consumer has the ability to repay before 

a mortgage loan is made. 

One consumer reporting agency 

asserted that the CFPB in the NPRM did 

not adequately address industry 

concerns regarding creditors’ ability to 

assess a borrower’s ability to repay. This 

commenter asserted that it is not 

adequate to just allow lenders to ask the 

borrower directly for all current debts, 

and the borrower may include medical 

debt information in response. This 

commenter asserted that consumers 

might decline to include the 

information, and even if consumers 

provided information, creditors would 

be unable to verify its accuracy. 

One trade group commenter 

representing banks asserted that (1) 


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banks would face significant potential 

uncertainty about compliance and 

liability if the final rule is unclear on 

how to comply with the mortgage 

ability-to-pay rules in Regulation Z; and 

(2) the CFPB must provide additional 

assurances regarding the inclusion or 

exclusion of medical debt information 

from mortgage-related calculations. 

Two industry trade group commenters 

representing banks and other financial 

institutions urged the CFPB to clarify 

that creditors are permitted to verify 

medical debt information received from 

the consumer in response to a general 

inquiry about debts or obligations using 

reliable third-party records that are not 

the credit report. These commenters 

also urged the CFPB to clarify that a 

creditor is permitted to consider debts 

listed on a consumer report that are not 

obviously medical debts. In this regard, 

the commenters urged the CFPB to 

amend Example 6 to provide that a 

creditor or card issuer is not required to 

independently verify that a debt listed 

on a consumer report is for purposes 

other than medical debt. Another 

industry commenter urged the CFPB to 

clarify that a creditor that considers a 

consumer’s FICO score or a report of 

credit report attributes that could 

encompass medical debt does not 

violate the proposed prohibition on 

obtaining or using medical debt for 

credit eligibility determinations. 

Also, an industry commenter 

representing credit unions noted that 

the CFPB and banking regulators have 

previously encouraged lenders to 

evaluate alternative data in making 

credit decisions, as evidenced by the 

CFPB’s 2017 ‘‘Request for Information 

Regarding Use of Alternative Data and 

Modeling Techniques in the Credit 

Process.’’ By restricting access to 

medical debt information, this 

commenter asserted that the CFPB 

would be limiting the very type of 

alternative data it has previously 

endorsed. 

Several industry commenters also 

raised concerns that the proposed rule 

could increase exposure to enforcement 

action by other Federal agencies, and 

violations of State laws, related to the 

consumer’s ability to repay. One 

commenter advocating for small entities 

argued that (1) a large medical debt may 

interfere with a consumer’s ability to 

repay; (2) by not considering it, a 

consumer may become overextended 

and suffer financial embarrassment; and 

(3) small entities are concerned that if 

they do not consider the consumer’s 

ability to repay and the consumer faces 

financial embarrassment, the small 

entity may be exposed to an 

enforcement action by other Federal 

agencies. One trade group representing 

community bankers asserted that the 

NPRM would create an irreconcilable 

regulatory contradiction between what 

the banking regulators require and what 

the CFPB will be preventing and 

prohibiting. This commenter indicated 

that it agrees with these other banking 

regulators because complete information 

and the accurate calculation of a 

borrower’s ability to repay is needed to 

make prudent lending decisions that 

benefit both the bank and the borrower. 

One credit union trade group asserted 

that (1) credit unions are already 

required to accurately determine their 

member’s ability-to-repay as a risk 

management requirement; and (2) the 

proposed rule creates an irreconcilable 

regulatory contradiction between what 

the financial regulators require and 

what the CFPB prohibits. 

Many industry commenters and 

several individual consumer 

commenters also asserted that banning 

medical debt from being included in a 

consumer report would harm both 

consumers and creditors. They asserted 

that the proposed rule could lead to 

incomplete or inaccurate assessments of 

a borrower’s ability to repay, potentially 

resulting in either overly restrictive 

lending practices or an increased risk of 

defaults due to approving loans for 

consumers who may not be able to 

afford them when all debts are 

considered. These comments are 

discussed in more detail in part VII, 

CFPA Section 1022(b) Analysis. 

Several consumer group commenters, 

on the other hand, questioned industry 

concerns that the NPRM, if adopted, 

would contradict the requirements in 

TILA or Regulation Z. In particular, one 

of these consumer group commenters 

asserted that, following enactment of 

Colorado’s law restricting medical debt 

on credit reports, there have been no 

reports of the other negative 

consequences in Colorado predicted by 

the debt collection industry’s hired 

economist, such as increased financing 

for unqualified borrowers, decreased 

access for credit-qualified borrowers, 

difficulties in repairing credit scores, or 

conflicts with the ability-to-repay 

requirement in Regulation Z. Several 

other consumer group commenters and 

several individual commenters also 

asserted that medical debts are not a 

good predictor of general 

creditworthiness, nor representative of 

an individual’s ability to repay debts. 

Final Rule 

For the reasons discussed herein, the 

CFPB is finalizing Example 6 as 

proposed with one clarification as 

discussed below. The CFPB has 

determined that Example 6 does not 

conflict with the ability-to-repay or pay 

requirements in Regulation Z. The CFPB 

also has determined that Example 6 

provides sufficient information for how 

creditors may comply with both the 

ability-to-repay or pay requirements in 

Regulation Z with respect to mortgages 

and credit card accounts and the 

changes in this final rule with respect to 

use of medical information. Final 

Example 6 describes a scenario where a 

consumer applies for a mortgage loan 

subject to Regulation Z § 1026.43(c) or 

§ 1026.34(a)(4), or an open-end (not 

home-secured) credit card account 

subject to Regulation Z § 1026.51(a). In 

this scenario, the application does not 

specifically request medical 

information, but the consumer provides 

medical information on the application 

in response to a general inquiry about 

debts or obligations. Final Example 6 

explains that the creditor or the card 

issuer is permitted under 

§ 1022.30(e)(1)(ii) to use such medical 

information in connection with any 

determination of the consumer’s 

eligibility, or continued eligibility, for 

credit only to the extent required by the 

applicable Federal law and 

implementing regulation. Final Example 

6 also explains that a creditor or card 

issuer is not permitted to obtain or use 

any medical information from a 

consumer reporting agency under 

§ 1022.30(e)(1)(ii) to comply with the 

ability-to-repay rule under Regulation Z 

§ 1026.43(c) for closed-end mortgages, 

the repayment ability rule under 

Regulation Z § 1026.34(a)(4) for openend, high-cost mortgages, or the abilityto-pay rule under Regulation Z 

§ 1026.51(a) for open-end (not homesecured) credit card accounts, because 

the creditor or card issuer can comply 

with those rules using information 

provided by the consumer. Consistent 

with the proposed rule, the CFPB has 

determined that a creditor or card issuer 

can comply with the applicable laws 

using the information provided by the 

consumer, including any medical 

information received from the consumer 

on the application in response to a 

general inquiry about debts or 

obligations; therefore, it would not be 

necessary or appropriate for a creditor 

or card issuer under § 1022.30(e)(1)(ii) 

to use medical information contained in 

a consumer report in order to comply 

with the applicable laws. 

The final rule revises Example 6 from 

the proposal, however, to make clear 

that this example only relates to the 

exception under § 1022.30(e)(1)(ii), and 

a creditor or card issuer may obtain and 

use medical information for purposes of 


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171See, e.g., Fannie Mae, Uniform Residential 

Loan Application (Form 1003), https://singlefamily.

fanniemae.com/delivering/uniform-mortgage-dataprogram/uniform-residential-loan-application (last 

visited Nov. 25, 2024). 

172See 12 CFR 1026.43(c)(2), (3)(iii); Regulation Z 

comment 43(c)(3)–6. 

173Section 307 of the Economic Growth, 

Regulatory Relief, and Consumer Protection Act 

(EGRRCPA), among other things, directs the CFPB 

to prescribe ability-to-repay rules for Property 

Assessed Clean Energy (PACE) financing. Public 

Law 115–174, 132 Stat. 1296, 1347 (2018). The 

CFPB issued a final rule on December 17, 2024. As 

finalized, the PACE rule applies the existing 

framework of Regulation Z § 1026.43(c) to PACE 

transactions in the same manner as the framework 

applies to other closed-end mortgages, with 

adjustments to account for the unique nature of 

PACE financing. 

174Fannie Mae, Uniform Residential Loan 

Application (Form 1003), https://singlefamily.

fanniemae.com/delivering/uniform-mortgage-dataprogram/uniform-residential-loan-application (last 

visited Nov. 25, 2024). 

Regulation Z’s ability-to-repay or pay 

determinations pursuant to other 

exceptions in § 1022.30(e), as 

applicable. See parts IV.B.3, Medical 

Information Related to Income, Benefits, 

or the Purpose of the Loan, and VI.A, 

Consumer-Authorized Transaction 

History. The CFPB has determined that 

this final rule does not conflict with the 

use of alternative data in complying 

with Regulation Z’s ability-to-repay or 

pay requirements. For instance, if a 

consumer authorizes a creditor to access 

transaction information from a 

Regulation E account, a Regulation Z 

credit card, or facilitation of payments 

from a Regulation E account or 

Regulation Z credit card, as the creditor 

might obtain through the exception 

under § 1022.30(e)(1)(x)(A)(1), and that 

transaction information happens to 

contain medical information, such as 

payments on a medical payment plan, 

the creditor is permitted under 

§ 1022.30(e)(1)(ii) to use such medical 

information in connection with any 

determination of the consumer’s 

eligibility, or continued eligibility, for 

credit only to the extent required by the 

applicable Federal law and 

implementing regulation, and is 

permitted to use such medical 

information under § 1022.30(e)(1)(x) to 

the extent the creditor satisfies the 

additional requirements of that 

exception stated in § 1022.30(e)(1)(x)(B) 

and (C). 

With respect to the ability-to-repay 

requirements in Regulation Z 

§ 1026.43(c), final Example 6 also 

contains additional information on the 

interplay between the ability-to-repay 

requirements in Regulation Z 

§ 1026.43(c) and final § 1022.30(e)(1)(ii). 

Again, under this scenario discussed in 

final Example 6, the creditor has not 

specifically requested medical 

information on the application, but the 

consumer provides information on a 

current debt obligation, such as a 

monthly medical payment plan, that is 

medical information. For mortgages 

subject to Regulation Z § 1026.43(c), 

creditors typically ask consumers on 

applications to disclose their current 

debt obligations/liabilities, but the 

applications do not specifically request 

medical information.171 To the extent 

that consumers provide medical 

information in response to this general 

request for debt information, creditors 

generally are required to consider such 

medical debt information under 

§ 1026.43(c)(2).172 Final Example 6 

explains that the creditor is permitted 

under § 1022.30(e)(1)(ii) to consider the 

existence and the amount of the medical 

payment plan as required in Regulation 

Z § 1026.43(c)(2) in considering factors 

under Regulation Z § 1026.43(c)(2), such 

as the current debt obligations, 

consumer’s monthly debt-to-income 

ratio, and residual income, in making 

the repayment ability determination 

required under Regulation Z 

§ 1026.43(c)(1). In this circumstance, 

final Example 6 explains that the 

creditor would not be required to 

independently verify the existence and 

amount of the monthly medical 

payment plan, as provided for under 

Regulation Z § 1026.43(c)(3)(iii) and 

comment 43(c)(3)–6, describing a 

situation in which a consumer provides 

a creditor with information on a debt 

obligation that is not listed on a 

consumer report. As discussed above, 

two industry trade group commenters 

urged the CFPB to clarify that creditors 

are permitted under § 1022.30(e)(1)(ii) to 

verify medical debt information 

received from the consumer in response 

to a general inquiry about debts or 

obligations using reliable third-party 

records that are not the credit report. 

However, while Regulation Z 

§ 1026.43(c)(3) generally requires 

creditors to use reasonably reliable third 

party records to verify any information 

the creditor relies upon under 

Regulation Z § 1026.43(c)(2) to make the 

repayment ability determination 

required by Regulation Z 

§ 1026.43(c)(1), Regulation Z 

§ 1026.43(c)(3)(iii) and comment 

43(c)(3)–6 clarify that if a creditor relies 

on a consumer’s credit report to verify 

a consumer’s current debt obligations 

and a consumer’s application states a 

current debt obligation not shown in the 

consumer’s credit report, the creditor 

need not independently verify such an 

obligation. Consistent with final 

§ 1022.38, medical debt information 

generally will not appear on credit 

reports. Accordingly, creditors may not 

rely on the exception in 

§ 1022.30(e)(1)(ii) to obtain and use 

medical information to independently 

verify such medical debt obligation. A 

creditor, however, may obtain and use 

medical information to verify such 

medical debt obligations pursuant to 

other exceptions in § 1022.30(e), as 

applicable.173

The CFPB notes that with respect to 

Regulation Z § 1026.34(a)(4) for openend, high-cost mortgages, situations also 

may arise where the creditor has not 

specifically requested medical 

information on the application, but the 

consumer provides information on a 

current debt obligation, such as a 

monthly medical payment plan, that is 

medical information. For mortgages 

subject to Regulation Z § 1026.34(a)(4), 

creditors typically ask consumers on 

applications to disclose their current 

debt obligations/liabilities, but the 

applications do not specifically request 

medical information.174 To the extent 

that consumers provide medical 

information in response to this general 

request for debt information, creditors 

generally are required to consider such 

medical debt information under 

§ 1026.34(a)(4). In complying with 

Regulation Z § 1026.34(a)(4), comment 

34(a)(4)(ii)(B)–1 discusses the scenario 

where a consumer lists an obligation on 

an application but the credit report does 

not reflect such obligation. Comment 

34(a)(4)(ii)(B)–1 makes clear that the 

creditor is responsible for considering 

such an obligation under Regulation Z 

§ 1026.34(a)(4), but the creditor is not 

required to independently verify the 

obligation. Thus, a creditor is permitted 

under § 1022.30(e)(1)(ii) to consider the 

existence and the amount of the medical 

payment plan as required in 

§ 1026.34(a)(4) in making the repayment 

ability determination required under 

Regulation Z § 1026.34(a)(4). The CFPB 

notes, however, that because Regulation 

Z § 1026.34(a)(4) and comment 

34(a)(4)(ii)(B)–1 do not require creditors 

to independently verify a debt 

obligation that a consumer provides to 

a creditor that is not listed on a 

consumer report, creditors may not rely 

on the exception in § 1022.30(e)(1)(ii) to 

obtain and use medical information to 

independently verify such medical debt 

obligation. A creditor, however, may 

obtain and use medical information to 

verify such medical debt obligations 

pursuant to other exceptions in 

§ 1022.30(e), as applicable. 

With respect to the ability-to-pay rule 

under Regulation Z § 1026.51(a) for 

open-end (not home-secured) credit 


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3312 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

175 5 U.S.C. 553(d). 

card accounts, the CFPB notes that card 

issuers typically do not ask consumers 

on applications to disclose their debt 

obligations. Instead, card issuers 

typically obtain a consumer’s debt 

obligations from a consumer report. 

Consistent with the NPRM, the CFPB 

has determined that creditors would not 

need to begin obtaining medical 

information from consumers under the 

final rule if they do not already do so. 

For example, the CFPB does not intend 

the final rule to change any existing law 

or guidance regarding the extent to 

which creditors may rely on consumer 

reports to assess consumers’ current 

obligations in complying with 

repayment ability determination 

requirements. Specifically, Regulation Z 

comment 51(a)(1)(i)–7 provides that a 

card issuer may consider the consumer’s 

current obligations based on 

information provided by the consumer 

or in a consumer report. Thus, a card 

issuer may continue to rely on the 

consumer report to obtain information 

about a consumer’s current obligations 

and is not required under 

§ 1026.51(a)(1) to request information 

from the consumer on the application 

about their debt obligations. The CFPB 

has determined that this is true even 

though a consumer report under this 

final rule will not contain information 

about a consumer’s medical debt 

obligations. Further, as with the abilityto-repay provisions discussed above, 

because § 1026.51(a)(1) does not require 

card issuers to verify any current debt 

obligations that may be listed on an 

application, a card issuer may not rely 

on the exception in § 1022.30(e)(1)(ii) to 

obtain and use medical information to 

independently verify a medical debt 

obligation listed on a consumer’s 

application. A card issuer, however, 

may obtain and use medical information 

to verify such medical debt obligations 

pursuant to other exceptions in 

§ 1022.30(e), as applicable. 

The CFPB declines to amend Example 

6 to clarify that creditors and card 

issuers are permitted to consider debts 

listed on a consumer report for purposes 

of the ability-to-repay or pay 

requirements in Regulation Z that are 

not obviously medical debts and are not 

required to independently verify that a 

debt listed on a consumer report is for 

purposes other than medical debt. The 

CFPB also declines to clarify that 

creditors or card issuers that consider a 

consumer’s FICO score or a report of 

credit report attributes that could 

encompass medical debt do not violate 

the proposed prohibition on obtaining 

or using medical information for credit 

eligibility determinations. The CFPB has 

determined that this additional 

guidance is not necessary. The 

restriction in § 1022.30(b) only applies 

to medical information, and creditors 

and card issuers must consider the 

definition of ‘‘medical information’’ as 

defined in § 1022.3(k) to determine if 

particular information meets that 

definition. 

With respect to ability-to-repay or pay 

requirements imposed by other Federal 

agencies, and State laws, the CFPB notes 

that final § 1022.30(e)(1)(ii) permits a 

creditor to obtain and use medical 

information pertaining to a consumer in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit to comply with 

applicable requirements of local, State, 

or Federal laws. The CFPB did not 

receive comments from other Federal 

regulators or State regulators indicating 

that the proposed rule was in conflict 

with ability-to-repay or pay 

requirements imposed by other Federal 

agencies or State laws, as applicable. 

The CFPB also is not aware of any 

reported negative consequences of State 

laws generally limiting consumer 

reporting agencies from reporting 

medical debt on credit reports (e.g., 

Colorado), such as conflicts with the 

ability-to-repay or pay requirement in 

Regulation Z. Also, the CFPB is not 

aware of any ability-to-repay or pay 

requirements of other regulators or State 

laws that specifically require a creditor 

to obtain medical information from 

consumer reports. Thus, a creditor or 

card issuer can comply with the 

applicable laws using any medical 

information provided by the consumer, 

including any medical information 

received from the consumer on the 

application in response to a general 

inquiry about debts or obligations; 

therefore, it would not be necessary or 

appropriate under § 1022.30(e)(1)(ii) for 

a creditor or card issuer to use medical 

information contained in a consumer 

report in order to comply with the 

applicable laws. 

V. Effective Date 

The CFPB proposed an effective date 

for this final rule of 60 days after 

publication in the Federal Register in 

accordance with the Administrative 

Procedure Act, which generally requires 

that rules be published not less than 30 

days before their effective dates.175 The 

CFPB received eight comments from 

industry, government, trade association, 

and non-profit stakeholders on the 

proposed effective date. Several of these 

commenters argued that the proposed 

60-day implementation period is 

unfeasible and that businesses would 

require more time to adjust to the 

changes to the FCRA. More specifically, 

five commenters stated that the 

proposed rule’s changes to FCRA 

compliance would require small entities 

to train employees, obtain legal advice, 

and invest time and resources into 

complying with the rule. Industry and 

government stakeholders provided a 

range of alternative effective dates for 

the CFPB to consider ranging from 12 to 

36 months while a non-profit 

commenter expressed support for the 

proposed effective date. Additionally, 

one trade association commenter 

advocated for a phase-in period to the 

rule. 

The CFPB has considered these 

comments and determines to finalize 

the effective date as proposed. The 

CFPB finds that the compliance costs to 

creditors will be low since creditors will 

likely need to do very little to comply 

with the rule to the extent that creditors 

currently only utilize medical debt 

information provided through consumer 

reports, which the CFPB understands is 

creditors’ main source of medical debt 

information. In such cases, so long as 

the consumer reporting agency 

providing the consumer report has 

complied with the rule, no medical debt 

information would be conveyed to the 

creditor, unless the consumer reporting 

agency has reason to believe the creditor 

intends to use the medical debt 

information in a manner not prohibited 

by the creditor prohibition. Creditors 

who currently obtain and use medical 

debt information (and other prohibited 

medical information) from other sources 

will need to establish controls to ensure 

that they do not obtain or use the 

medical debt information in a manner 

prohibited by the rule. Consumer 

reporting agencies will need to make 

coding changes to exclude data 

identified as medical information from 

consumer reports sent to creditors. 

However, the CFPB expects this to be a 

relatively simple coding change, 

particularly for the NCRAs and the 

consumer reporting agencies that obtain 

consumer reports from NCRAs for resale 

because the NCRAs already limit their 

reporting of medical collections. In 

addition, consumer reporting agencies 

may have already scoped out this kind 

of coding change to comply with 

reforms in several States. Thus, the rule 

will take effect 60 days after publication 

in the Federal Register. 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3313 

176Required Rulemaking on Personal Financial 

Data Rights, 89 FR 90838 (Nov. 18, 2024), https:// 

files.consumerfinance.gov/f/documents/cfpb_

personal-financial-data-rights-final-rule_2024- 

10.pdf. 

177See, e.g., Alexei Alexandrov, Alyssa Brown, & 

Samyak Jain, Consumer Fin. Prot. Bureau, Looking 

at credit scores only tells part of the story—cashflow 

data may tell another part (July 2023), https://

www.consumerfinance.gov/about-us/blog/creditscores-only-tells-part-of-the-story-cashflow-data/. 

178FinRegLab, The Use of Cash-Flow Data in 

Underwriting Credit (July 2019), https://

finreglab.org/wp-content/uploads/2019/07/FRL_

Research-Report_Final.pdf. 

179As the PFDR Rule explains, a ‘‘first party 

payment’’ is ‘‘a transfer initiated by the payee or an 

agent acting on behalf of the underlying payee.’’ 89 

FR 90838, 90990 (Nov. 18, 2024) (to be codified at 

12 CFR 1033.111(b)(3)). ‘‘First party payments 

include payments initiated by loan servicers.’’ Id. 

180See id. at 90920–50. 

VI. Other Comments 

A. Consumer-Authorized Transaction 

History 

In the NPRM, the CFPB noted that 

consumer reporting agencies could 

incur additional compliance costs if 

medical information furnishers do not 

notify consumer reporting agencies of 

their status as required by FCRA section 

623(a)(9), and, similarly, that creditors 

could incur additional compliance costs 

if they use consumer reports that 

contain medical debt information 

notwithstanding § 1022.38. 

Several commenters raised concerns 

along these lines about the proposal’s 

interaction with the CFPB’s Required 

Rulemaking on Personal Financial Data 

Rights (PFDR Rule), which could result 

in transmission of medical information 

that is not identified as such.176

Specifically, a bank trade association 

commented that prohibiting creditors 

from considering medical debts and 

expenses could impede the 

development of cashflow underwriting, 

which considers the general inflows and 

outflows from a consumer’s depository 

account. This commenter highlighted 

cashflow underwriting’s value for 

expanding credit to underserved 

populations and argued that limiting the 

use of medical debt information could 

restrict the predictive power of this 

method. And an industry trade 

association commented that the 

proposal could pose challenges for data 

aggregators in the open banking system 

because no clear mechanism exists for 

identifying medical debt accounts. This 

commenter recommended that the CFPB 

require data providers to identify when 

a consumer is authorizing access to a 

medical account. 

The CFPB is modifying the proposal 

to better allow consumers to authorize 

access to their accounts containing 

medical information for cashflow 

underwriting purposes. Final 

§ 1022.30(e)(1)(x)(A)(1) provides, in 

part, that a creditor may consider 

medical information that is included in 

the transaction information of an 

account for a consumer financial 

product or service described in 12 CFR 

1033.111(b)(1) through (3), and accessed 

with the consumer’s authorization. This 

new provision is independent of the 

PFDR Rule and applies in situations 

where the PFDR Rule does not apply to 

the consumer-authorized access. 

As the CFPB has recognized in the 

PFDR Rule and elsewhere,177 the use of 

cashflow data in underwriting offers 

substantial benefits to consumers, 

especially consumers who have a 

limited credit history or do not have a 

credit file with a nationwide consumer 

reporting agency. For example, among 

consumers who do have credit scores, a 

study by FinRegLab found that cashflow underwriting can help identify 

consumers who have low traditional 

credit scores but are actually a low 

credit risk for lenders.178 Allowing 

creditors to consider cashflow data may 

increase access to credit or lower prices 

for consumers. But, as discussed above 

in connection with debts owed to thirdparty lenders, it is not operationally 

feasible for creditors or consumer 

reporting agencies to easily identify 

transactions that pertain to a medical 

debt. Without either the ability to easily 

filter out medical-debt transactions, or 

the ability to consider medical debts or 

expenses, creditors would be unable to 

fully assess the outflows from a 

consumer’s account. Accordingly, the 

CFPB has determined that it is 

necessary and appropriate to protect 

legitimate operational, transactional, 

risk, consumer, and other needs, 

including permitting actions necessary 

for administrative verification purposes, 

and consistent with FCRA’s intent to 

restrict the use of medical information 

for inappropriate purposes, to allow 

creditors to consider medical 

information included in the transaction 

history of a consumer’s account with the 

consumer’s authorization. 

Final § 1022.30(e)(1)(x)(A)(1)’s 

exception applies to medical 

information contained in an account for 

a consumer financial product or service 

described in 12 CFR 1033.111(b)(1) 

through (3). 12 CFR 1033.111(b) 

provides a definition of ‘‘covered 

consumer financial product or service’’ 

for purposes of the PFDR Rule. This 

term means a consumer financial 

product or service, as defined in 12 

U.S.C. 5481(5), that is: (1) A Regulation 

E account, which means an account, as 

defined in Regulation E, 12 CFR 

1005.2(b); (2) A Regulation Z credit 

card, which means a credit card, as 

defined in Regulation Z, 12 CFR 

1026.2(a)(15)(i); or (3) Facilitation of 

payments from a Regulation E account 

or Regulation Z credit card, excluding 

products or services that merely 

facilitate first party payments.179 Such 

accounts include checking accounts, 

savings accounts, digital wallets, and 

other accounts that provide data about 

a consumer’s income, expenses, and 

spending. This transaction data is 

generally the type of data that financial 

institutions would need to access to 

engage in cashflow underwriting. 

Final § 1022.30(e)(1)(x)(A)(1) also 

specifies that the medical information 

must have been accessed with the 

consumer’s authorization. The PFDR 

Rule establishes authorization 

procedures for third parties seeking to 

access consumer data for purposes such 

as cashflow underwriting. As described 

in detail in the PFDR Rule, these 

authorization procedures and 

obligations are designed to ensure that 

consumers understand the data access 

they are authorizing and are able to 

exercise meaningful control with 

respect to such access.180 Accordingly, 

a creditor satisfies final 

§ 1022.30(e)(1)(x)(A)(1)’s requirement 

that it obtain medical information ‘‘with 

the consumer’s authorization’’ if it 

accesses consumer data following 

procedures that comply with—or in 

situations not covered by the rule, 

conform to—the PFDR Rule. 

The CFPB declines to require data 

providers or data aggregators to identify 

medical accounts. To the extent that the 

accounts discussed by the commenter 

are covered by the PFDR Rule because 

they are Regulation E accounts, 

Regulation Z credit cards, or payment 

facilitation products and services, final 

§ 1022.30(e)(1)(x)(A)(1) allows 

consumers to authorize access to the 

cashflow data from such accounts. To 

the extent such accounts fall outside the 

coverage of the PFDR Rule, such a 

requirement is beyond the scope of this 

rulemaking. The CFPB notes, however, 

that nothing in this rule or the PFDR 

Rule prevent industry from developing 

such an identification system. 

B. FCRA Section 605(a)(6)—Information 

Excluded From Consumer Reports: 

Name, Address, and Telephone Number 

of any Medical Information Furnisher 

Industry commenters asserted that the 

creditor prohibition in FCRA section 

604(g)(2) does not prohibit creditors 

from obtaining or using financial 


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3314 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

181 70 FR 70664, 70664 (Nov. 22, 2005). 

182 15 U.S.C. 1681b(g)(2) (emphasis added). 

183FACT Act section 411(a), 117 Stat. 1999–2001. 

184FACT Act section 411(d), 117 Stat. 2002 

(providing that FCRA section 604(g)(2), as enacted 

in FACT Act section 411(a), shall take effect on the 

later of (1) 90 days after the Agencies’ issuance of 

final regulations under FCRA section 604(g)(5), or 

(2) the date specified in such final regulations). 

Although FACT Act section 411(a) required the 

Agencies to issue regulations under FCRA section 

604(g)(5) by six months after the FACT Act’s 

December 4, 2003 enactment, they did not publish 

interim final rules under FCRA section 604(g)(5) 

until June 10, 2005. See Fair Credit Reporting 

Medical Information Regulations, 70 FR 33958 

(June 10, 2005); see also Fair Credit Reporting 

Medical Information Regulations, 70 FR 70664 

(Nov. 22, 2005) (subsequent final rule). 

185FACT Act section 412, 117 Stat. 2002–03. 

186FACT Act section 412(a), 117 Stat. 2002. 

187FACT Act section 412(e), 117 Stat. 2003. 

188FACT Act section 412(b), 117 Stat. 2002. 

FCRA section 605(a)(6) exempts from its restrictions 

consumer reports ‘‘provided to an insurance 

company for a purpose relating to engaging in the 

business of insurance other than property and 

casualty insurance.’’ Id. (15 U.S.C. 1681c(a)(6)(B)). 

189FACT Act section 412(f), 117 Stat. 2003. 

190FACT Act section 412(g), 117 Stat. 2003. 

Before the text of FCRA section 604(g)(2), as set 

forth in FACT Act section 411(a), itself took effect, 

the FACT Act section 412(f) ‘‘technical and 

conforming’’ amendment inserted in FCRA section 

604(g)(2) the parenthetical cross-referencing FCRA 

section 605(a)(6). Congress contemplated that the 

text of FCRA section 604(g)(2) set forth in FACT Act 

section 411(a) could take effect within 

approximately nine months after the enactment of 

the FACT Act (i.e., before the FACT Act section 

412(f) ‘‘technical and conforming’’ amendment 

adding the parenthetical referring to FCRA section 

605(a)(6) would take effect)—but Congress also 

provided that FCRA section 604(g)(2) could take 

effect later, i.e., if the Agencies specified a later date 

in their final regulations. See FACT Act section 

411(a), 117 Stat. 2001 (requiring Agencies to issue 

final regulations under FCRA section 604(g)(5) 

within six months of the FACT Act’s enactment); 

FACT Act section 411(d), 117 Stat. 2002 (providing 

that FCRA section 604(g)(2), as set forth in FACT 

Act section 411(a), could take effect on the later of 

90 days after issuance of final regulations under 

FCRA section 604(g)(5) or the date specified in 

those final regulations). 

aspects of medical information because 

FCRA section 604(g)(2) has a 

parenthetical cross-referencing FCRA 

section 605(a)(6). Specifically, 

commenters contended that the 

parenthetical cross-referencing FCRA 

section 605(a)(6) has the effect of 

allowing creditors to obtain or use 

medical information so long as it is 

restricted or reported using codes that 

do not reveal the specific provider or 

the nature of such services, products, or 

devices. This reading of FCRA section 

604(g)(2) is contrary to the approach 

that the CFPB’s predecessor agencies 

used when initially creating the 

provisions of Regulation V being 

repealed in this final rule; they 

expressly stated that ‘‘Section 604(g)(2) 

of the FCRA prohibits creditors from 

either obtaining or using medical 

information pertaining to a consumer in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit.’’ 181 In fact, were 

the commenters’ position the correct 

reading, industry would have no need 

for the regulatory exemptions being 

repealed in this final rule—at least with 

respect to medical information in 

consumer reports that is treated in the 

manner required under 15 U.S.C. 

1681c(a)(6), which the CFPB 

understands constitutes the bulk of the 

medical information that creditors 

consider in connection with crediteligibility determinations. In full, FCRA 

section 604(g)(2) reads: ‘‘Limitation on 

creditors. Except as permitted pursuant 

to paragraph (3)(C) or regulations 

prescribed under paragraph (5)(A), a 

creditor shall not obtain or use medical 

information (other than medical 

information treated in the manner 

required under section 1681c(a)(6) of 

this title [i.e., section 605(a)(6) of the 

FCRA]) pertaining to a consumer in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit.’’ 182

The CFPB believes that commenters 

misunderstand the plain text, context, 

and history of FCRA sections 604(g)(2) 

and 605(a)(6), which were enacted via 

two separate provisions of the FACT 

Act. Properly understood, the relevant 

sections of the FACT Act—sections 411 

and 412—contemplate two separate 

mechanisms, regulating two different 

types of entities and on two different 

prescribed schedules, for ensuring 

protections for consumers’ medical 

information in the financial system: (1) 

the limitation on creditors’ use of 

medical information in underwriting 

under FCRA section 604(g)(2), subject to 

exceptions the Agencies might authorize 

in a final rule to be issued six months 

after the enactment of the FACT Act, 

and (2) the requirement under FCRA 

section 605(a)(6) that consumer 

reporting agencies mask certain 

information in consumer reports, to take 

effect fifteen months after the enactment 

of the FACT Act. 

First, FACT Act section 411,183 titled 

‘‘Protection of Medical Information in 

the Financial System,’’ added the bulk 

of FCRA section 604(g)—including the 

creditor prohibition—but did not add a 

parenthetical cross-referencing FCRA 

section 605(a)(6). FACT Act section 411 

required the Agencies to issue final 

regulations by six months after the 

enactment of the FACT Act and tethered 

the effective date of the creditor 

prohibition in FCRA section 604(g)(2) to 

those regulations.184

Second, FACT Act section 412,185

titled ‘‘Confidentiality of Medical 

Contact Information in Consumer 

Reports,’’ added several complementary 

provisions related to how consumer 

reporting agencies are to identify and 

appropriately protect medical 

information on consumer reports. FACT 

Act section 412 added FCRA section 

623(a)(9), requiring persons whose 

primary business is providing medical 

services, products, or devices (or their 

agents or assignees) and who furnish 

information to consumer reporting 

agencies to notify the agencies of their 

status as medical information 

furnishers.186 FACT Act section 412 

authorized the FTC to ‘‘issu[e] model 

guidance or prescribe[e] reasonable 

policies and procedures, as necessary’’ 

to ensure that a medical information 

furnisher notifies the consumer 

reporting agencies of its status.187 Then, 

FACT Act section 412 added FCRA 

section 605(a)(6), which generally 

prohibits consumer reporting agencies 

from reporting to any third parties (i.e., 

not just creditors) the ‘‘name, address, 

and telephone number of any medical 

information furnisher’’ that has notified 

the agency of its status, unless ‘‘such 

name, address, and telephone number’’ 

are restricted or reported using codes for 

confidentiality.188 In conjunction with 

this new requirement for consumer 

reporting agencies, FACT Act section 

412 inserted in FCRA section 604(g)(1) 

and (g)(2), as ‘‘technical and conforming 

amendments,’’ the parentheticals crossreferencing FCRA section 605(a)(6).189

Recognizing that medical information 

furnishers and consumer reporting 

agencies would need time for 

implementation, Congress stated that 

the ‘‘amendments made by [FACT Act 

section 412] shall take effect at the end 

of the 15-month period beginning on the 

date of enactment of this Act.’’ 190

Commenters appear to posit an 

unlikely and odd legislative maneuver 

whereby Congress simultaneously 

passed a law and repealed it in 

substantial part when commenters 

assert that the parenthetical crossreferencing FCRA section 605(a)(6) 

(added by FACT Act section 412) in 

large part negates the creditor 

prohibition in FCRA section 604(g)(2) 

(added by FACT Act section 411). As 

noted above, the two sections of the 

FACT Act contemplate two separate 

mechanisms, regulating two different 

types of entities and on two different 

prescribed schedules, for ensuring 

protections for consumers’ medical 

information in the financial system. 

Accordingly, as Congress indicated by 

designating the parenthetical in FCRA 

section 604(g)(2) a ‘‘technical and 

conforming amendment,’’ the 


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191 70 FR 33958, 33962 (June 10, 2005). 

192 Id. Congress subsequently (through the CFPA) 

transferred to the CFPB primary regulatory 

authority for the FCRA. Pub. L. 111–203, 124 Stat. 

1955, 2004 (2010). See also 15 U.S.C. 

1681b(g)(3)(C), (5)(A). 

193 15 U.S.C. 1692 et seq. 

194Pub. L. 104–191, 110 Stat. 1936 (1996). 

195Comments regarding State laws, and responses 

thereto, are discussed in part IV.C, Limits on a 

Consumer Reporting Agency’s Disclosure of Medical 

Debt Information, above. 

196Pub. L. 111–148, 124 Stat. 119 (2010). 

197Pub. L. 116–260, div. BB, tit. I, 134 Stat. 2758 

(2020). 

198 15 U.S.C. 1691 et seq. 

199 15 U.S.C. 6801 et seq. 

200See 12 CFR 1006.30(a). 201See 45 CFR parts 160 and 164. 202See 26 U.S.C. 501(r)(6). 203See Requirements Related to Surprise Billing; 

Part I, 86 FR 36872 (July 13, 2021). The protections 

Continued 

parenthetical reference to ‘‘medical 

information treated in the manner 

required under section 605(a)(6)’’ is 

nothing more than an acknowledgment 

in the first mechanism that the second 

exists. In other words, Congress 

anticipated that the Agencies would be 

considering regulatory exceptions in 

their upcoming regulations, and to 

ensure that any of the Agencies’ 

upcoming regulatory exceptions under 

FACT Act section 411 would also be 

consistent with the separate ‘‘name, 

address, and telephone number’’ 

confidentiality provisions of FACT Act 

section 412, Congress added a crossreference. This cross-reference serves to 

emphasize that if the Agencies’ 

upcoming regulations included 

regulatory exceptions to the creditor 

prohibition in FCRA section 604(g)(2), 

creditors would nonetheless still be 

prohibited from obtaining or using a 

consumer report containing the ‘‘name, 

address, and telephone number’’ of a 

health care provider unless such name, 

address, and telephone number are 

restricted or reported using codes for 

confidentiality. 

Commenters’ interpretation of the 

parenthetical, which was added through 

FACT Act section 412, would swallow 

much of the creditor prohibition that 

Congress added through FACT Act 

section 411. Contrary to commenters’ 

assertion, the parenthetical merely 

ensures consistency between FACT Act 

section 411 and section 412, so that— 

notwithstanding any agency regulation 

creating regulatory exceptions to the 

creditor prohibition—consumer reports 

containing medical information 

obtained or used by creditors would 

restrict the ‘‘name, address, and 

telephone number’’ of a health care 

provider or otherwise report using codes 

for confidentiality. Besides ensuring the 

confidentiality of the ‘‘name, address, 

and telephone number,’’ FACT Act 

section 412 does not otherwise change 

the broad creditor prohibition in FCRA 

section 604(g)(2), which Congress added 

through FACT Act section 411. As 

recognized by the prudential regulators, 

FCRA ‘‘section 604(g)(2) prohibits all 

creditors from obtaining or using key 

financial information that is also 

medical information in the credit 

underwriting process,’’ and ‘‘[s]ection 

604(g) does not contain any specific 

statutory exception to this broad 

[creditor] prohibition.’’ 191 Commenters 

are thus incorrect to assert that the 

creditor prohibition that Congress added 

through FACT Act section 411 

distinguishes between financial and 

non-financial aspects of medical 

information; rather, the only exceptions 

are exceptions pursuant to regulatory 

determinations under FCRA section 

604(g)(3)(C) (by the FTC, Federal 

banking agencies, NCUA, or applicable 

State insurance authority) or pursuant to 

regulations under FCRA section 

604(g)(5) (by the Federal banking 

agencies and NCUA).192

C. Implications for Other Laws 

Some commenters supporting the 

proposed rule stated that the rule would 

help to further strengthen existing 

consumer protections provided by other 

laws, such as the FDCPA 193 and the 

Health Insurance Portability and 

Accountability Act of 1996 (HIPAA).194

Several commenters opposing the 

proposed rule stated that the rule 

unnecessarily duplicates or overlaps 

with these and other Federal statutes 

and regulations addressing debt 

collection, abusive conduct, privacy 

issues, discrimination, and consumer 

credit eligibility.195 These laws are 

discussed below and include, among 

others, the Patient Protection and 

Affordable Care Act 196 and the No 

Surprises Act.197 Some commenters also 

went further and stated that the 

proposed rule is in conflict with some 

provisions of other laws. For example, 

commenters asserted that the proposed 

rule may cause creditors to violate 

ECOA 198 if, in lieu of medical debt 

information, potential creditors rely 

more heavily on non-medical debt 

information about consumers that is less 

predictive and potentially biased. 

Commenters also contended that the 

proposed rule would require handling 

of sensitive information across multiple 

entities in violation of the HIPAA and 

the Gramm-Leach-Bliley Act (GLBA) 199

and would impede creditors’ ability to 

make repayment ability determinations 

required under TILA and Regulation Z. 

Another commenter asserted that the 

proposed rule does not comport with 

CFPB enforcement actions related to 

abusive acts or practices. With respect 

to HIPAA, some commenters stated that 

the proposed rule would conflict with 

HIPAA’s provisions permitting covered 

entities (such as health care providers) 

to use and disclose protected health 

information, with certain limits and 

protections, for treatment, payment, and 

health care operations activities. 

Another commenter asserted that the 

proposed rule contradicts bankruptcy 

law generally, under which a 

bankruptcy filer is required to pay back 

at least some portion of their debt. 

The FDCPA and the CFPB’s 

implementing regulation, Regulation F, 

12 CFR part 1006, govern certain 

activities of debt collectors, as that term 

is defined in the FDCPA. Among other 

things, the FDCPA and Regulation F 

prohibit debt collectors from engaging 

in unfair, deceptive, or abusive conduct 

when collecting or attempting to collect 

debts and require debt collectors to 

make certain disclosures to consumers 

in debt collection. Effective November 

30, 2021, a new provision of Regulation 

F requires a debt collector to take 

certain actions intended to convey 

information about the debt to the 

consumer before furnishing information 

on that debt to a consumer reporting 

agency.200

The HIPAA and the Department of 

Health and Human Services’ (HHS) 

implementing regulations 201 also limit 

or regulate the use, collection, and 

sharing of certain health information. 

Among other things, the HIPAA, as 

implemented by HHS regulations, sets 

national standards for the protection of 

individually identifiable health 

information by health plans, health care 

clearinghouses, and health care 

providers, as well as the security of 

electronic protected health information. 

The Patient Protection and Affordable 

Care Act revised section 501(r) of the 

Internal Revenue Code such that nonprofit hospitals may lose their nonprofit tax status if they fail to evaluate 

patients for eligibility for financial 

assistance before the hospital takes 

certain types of collection actions.202

The No Surprises Act protects 

participants, beneficiaries, and enrollees 

in group health plans and group and 

individual health insurance coverage 

from surprise medical bills when they 

receive, under certain circumstances, 

emergency services, non-emergency 

services from nonparticipating 

providers at participating health care 

facilities, and air ambulance services 

from nonparticipating providers of air 

ambulance services.203 In addition, the 


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against surprise billing also apply to health benefits 

plans offered by carriers under the Federal 

Employees Health Benefits (FEHB) Act. See 5 U.S.C. 

8901(p). 

204See Requirements Related to Surprise Billing; 

Part I, 86 FR 36872 (July 13, 2021). 

205See Requirements Related to Surprise Billing; 

Part II, 86 FR 55980 (Oct. 7, 2021). 

206See, e.g., id. (interim final rule issued by 

Office of Personnel Management; Internal Revenue 

Service, Department of the Treasury; Employee 

Benefits Security Administration, Department of 

Labor; Centers for Medicare and Medicaid Services, 

Department of Health and Human Services); 

Requirements Related to Surprise Billing; Part I, 86 

FR 36872 (July 13, 2021) (same). 

207 15 U.S.C. 1691(a); 12 CFR 1002.4(a); 86 FR 

14363 (Mar. 16, 2021). 

208Regulation B comment 4(a)–1. 209 15 U.S.C. 1601 et seq. 

210West Virginia v. EPA, 597 U.S. 697, 743 (2022) 

(Gorsuch, J., concurring). 

211 Mayfield v. Dep’t of Labor, 117 F.4th 611, 616 

(5th Cir. 2024). 

212West Virginia, 597 U.S. at 724 (majority 

opinion) (citation omitted). 

213 Id. at 729 (citation omitted). 

214 15 U.S.C. 1681b(g)(5). 

No Surprises Act, among other things, 

requires certain health care facilities 

and providers to disclose Federal and 

State patient protections against balance 

billing and sets forth complaint 

processes with respect to potential 

violations of the protections against 

balance billing and out-of-network cost 

sharing.204 The No Surprises Act also 

includes certain protections for 

uninsured (or self-pay) individuals from 

surprise medical bills.205 Several 

Federal agencies have published rules 

implementing the No Surprises Act.206

ECOA and the CFPB’s implementing 

regulation, Regulation B, 12 CFR part 

1002, make it illegal for a creditor to 

discriminate against an applicant in any 

aspect of a credit transaction on the 

basis of race, color, religion, national 

origin, sex (including sexual orientation 

and gender identity), marital status, or 

age (provided the applicant has the 

capacity to contract), on the fact that all 

or part of the applicant’s income derives 

from a public assistance program, or on 

the fact that the applicant has in good 

faith exercised any right under the 

Consumer Credit Protection Act.207 The 

general rule stated in § 1002.4(a) 

‘‘covers, for example, application 

procedures, criteria used to evaluate 

creditworthiness, administration of 

accounts, and treatment of delinquent or 

slow accounts.’’ 208

The GLBA and the CFPB’s 

implementing regulation, Regulation P, 

12 CFR part 1016, require financial 

institutions subject to the CFPB’s 

jurisdiction to provide their customers 

with notices concerning their privacy 

policies and practices, among other 

things. They also place certain 

limitations on the disclosure of 

nonpublic personal information to 

nonaffiliated third parties, and on the 

redisclosure and reuse of such 

information. Other parts of the GLBA, as 

implemented by regulations and 

guidelines of certain other Federal 

agencies (e.g., the Federal Trade 

Commission’s Safeguards Rule and the 

prudential regulators’ Safeguards 

Guidelines), set forth standards for 

administrative, technical, and physical 

safeguards with respect to financial 

institutions’ customer information. 

TILA 209 and the CFPB’s 

implementing regulation, Regulation Z, 

12 CFR part 1026, impose disclosure 

and other requirements on creditors. For 

example, TILA and Regulation Z 

generally prohibit creditors from making 

mortgage loans unless they make a 

reasonable and good faith determination 

that the consumer will have the ability 

to repay the loan. TILA and Regulation 

Z also contain ability-to-pay 

requirements for credit cards. 

Commenters provided no evidence 

that the proposed rule would conflict 

with other Federal laws. For example, 

while they pointed to HIPAA 

implementing regulations permitting 

covered entities, such as health care 

providers, to furnish payment 

information to consumer reporting 

agencies, they did not address the fact 

that the proposed rule would not have 

imposed any obligations or restrictions 

on furnishers. Nor would the rule 

unnecessarily duplicate or overlap with 

other laws; to the contrary, issuing this 

final rule will effectuate a 

congressionally enacted restriction on 

creditors’ utilization of medical 

information and further strengthen 

consumer protections. Moreover, 

§ 1022.30(e)(1)(ii) permits a creditor to 

obtain and use medical information 

pertaining to a consumer in connection 

with any determination of the 

consumer’s eligibility, or continued 

eligibility, for credit to comply with 

applicable requirements of local, State, 

or Federal laws. For example, how to 

obtain and use medical information 

provided by the consumer in 

compliance with TILA and Regulation 

Z, as set forth in § 1022.30(e)(1)(ii), is 

discussed in part IV.D, Example to 

Comply With Applicable Requirements 

of Local, State, or Federal laws, above. 

With respect to the CFPB’s pending 

enforcement actions, as referenced by a 

commenter, the CFPB notes that 

enforcement actions alleging unfair, 

deceptive, or abusive acts or practices 

under the CFPA are tethered to their 

particular facts and circumstances. 

D. Other Comments Regarding Legal 

Authority 

Industry commenters asserted that the 

CFPB lacked authority to issue this rule, 

arguing that the rule constituted a 

matter of vast economic and political 

significance subject to the ‘‘major 

questions’’ doctrine. Industry 

commenters also contended that 

reliance on the words ‘‘necessary and 

appropriate’’ in Congress’s delegations 

of authority to the CFPB does not 

provide an intelligible principle to 

guide agency action and would violate 

the ‘‘nondelegation’’ doctrine. 

Consistent with the discussion above, 

the CFPB has the legal authority to 

implement this rule. First, the CFPB has 

determined that the FCRA authorizes it 

to issue this rule and that the rule does 

not run afoul of the major questions 

doctrine. The rule merely (1) amends 

(including by revoking in substantial 

part) a discretionary exemption 

previously issued under expressly 

conferred rulemaking authority, thereby 

giving effect to a congressionally 

enacted restriction on creditors’ 

utilization of medical information, and 

(2) prohibits consumer reporting 

agencies from providing creditors 

information that they cannot consider in 

underwriting in any event. Far from 

‘‘claim[ing] the power to resolve a 

matter of great political 

significance,’’ 210 the CFPB here is 

removing a discretionary, insufficiently 

supported regulatory barrier to the 

implementation of an express statutory 

restriction on creditors obtaining or 

using medical information in 

connection with lending decisions. As 

the discussion of the rule’s benefits and 

costs in part VII.E, Potential Benefits 

and Costs to Consumers and Covered 

Persons, demonstrates, the rule will not 

‘‘involve[] hundreds of billions of 

dollars of impact,’’ as have other rules 

triggering the major questions 

doctrine.211 Nor is this a case in which 

an agency has ‘‘claim[ed] to discover in 

a long-extant statute an unheralded 

power.’’ 212 Instead, the rule here 

returns to FCRA section 604(g)(2) the 

effect it would have had if the Agencies 

had not adopted the financial 

information exception. Further, 

Congress itself recognized that the CFPB 

has ‘‘comparative expertise’’ 213 to make 

the determination at the heart of this 

rulemaking: It expressly provided that 

the CFPB may determine whether an 

exemption like the financial information 

exception is ‘‘necessary and appropriate 

to protect legitimate operational, 

transactional, risk, consumer, and other 

needs’’ related to consumer-credit 

transactions.214 The rule thus does not 

have the hallmarks of a regulation 


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215See, e.g., Whitman v. Am. Trucking Ass’ns, 

531 U.S. 457, 472 (2001) (quoting J.W. Hampton, Jr., 

& Co. v. United States, 276 U.S. 394, 409 (1928)). 

216 Gundy v. United States, 588 U.S. 128, 146 

(2019) (plurality opinion). 

217Consumer Fin. Prot. Bureau, CFPB Estimates 

$88 Billion in Medical Bills on Credit Reports (Mar. 

1, 2022), https://www.consumerfinance.gov/aboutus/newsroom/cfpb-estimates-88-billion-in-medicalbills-on-credit-reports/. 

218Consumer Fin. Prot. Bureau, Medical debt 

burden in the United States, at 5 (Mar. 1, 2022), 

https://www.consumerfinance.gov/data-research/ 

research-reports/medical-debt-burden-in-theunited-states/. 

219See Consumer Fin. Prot. Bureau, Complaint 

Bulletin: Medical billing and collection issues 

described in consumer complaints, at 7–8 (Apr. 20, 

2022), https://www.consumerfinance.gov/dataresearch/research-reports/complaint-bulletinmedical-billing-and-collection-issues-described-inconsumer-complaints/. 

220Lunna Lopes et al., Kaiser Fam. Found., 

Health Care Debt In The U.S.: The Broad 

Consequences Of Medical And Dental Bills (June 

16, 2022), https://www.kff.org/report-section/kffhealth-care-debt-survey-main-findings/. 

221Noam M. Levey, Hundreds of Hospitals Sue 

Patients or Threaten Their Credit, a KHN 

Investigation Finds. Does Yours?, KFF Health News 

(Dec. 21, 2022), https://kffhealthnews.org/news/ 

article/medical-debt-hospitals-sue-patientsthreaten-credit-khn-investigation/. 

potentially subject to the major 

questions doctrine. 

Second, the CFPB has determined that 

this rule does not run afoul of the 

nondelegation doctrine, which provides 

that it is unconstitutional for Congress 

to delegate its legislative powers to an 

actor in another branch of government, 

such as an executive agency. The 

consensus articulation that has emerged 

in Supreme Court jurisprudence is that 

Congress does not impermissibly 

delegate legislative authority if the 

statute contains an ‘‘intelligible 

principle’’ to guide the relevant actor in 

exercising its statutory authority.215

Under this standard, the Court has 

upheld broad delegations, such as ‘‘to 

regulate in the ‘public interest,’ ’’ ‘‘to set 

‘fair and equitable’ prices and ‘just and 

reasonable’ rates,’’ and ‘‘to issue 

whatever air quality standards are 

‘requisite to protect the public 

health.’ ’’ 216 Here, Congress’s 

delegations of authority to the CFPB, in 

FCRA sections 604(g)(5) and 621(e), and 

CFPA section 1022(b)(1), meet that 

standard. 

VII. CFPA Section 1022(b) Analysis 

The CFPB has considered the 

potential benefits, costs, and impacts of 

the rule. In the proposal, the CFPB 

requested comment on the impact 

analysis, as well as submissions of 

additional data that could inform its 

consideration of the impacts of the 

proposed rule. The CFPB has 

incorporated the information provided 

by commenters in the analysis and 

estimates that follow. This section 

contains an analysis of the benefits and 

costs of the rule for consumers, 

consumer reporting agencies, creditors, 

and other entities, such as health care 

providers and debt collectors. 

A. Statement of Need 

The FCRA supports the fairness, 

accuracy, and privacy of personal 

information in consumer reporting. 

Among the protections in the FCRA for 

consumers’ medical information, FCRA 

section 604(g)(2) generally restricts 

creditors from obtaining or using 

medical information in connection with 

credit eligibility determinations, absent 

a regulatory exception. FCRA section 

604(g)(5) requires that the CFPB 

determine that any such exception be 

necessary and appropriate and 

consistent with the intent of FCRA 

section 604(g)(2) to restrict the use of 

medical information for inappropriate 

purposes. The CFPB is also authorized 

under section 621(e) of the FCRA to 

issue regulations as may be necessary or 

appropriate to administer and carry out 

the purposes and objectives of the 

FCRA, and to prevent evasions thereof 

or to facilitate compliance therewith. 

The CFPB anticipates that the rule will 

enhance consumer privacy by removing 

the financial information exception at 

§ 1022.30(d) that currently permits 

creditors to consider medical debt 

information and medical information 

about expenses, assets, and collateral, 

among other types of medical 

information, in underwriting decisions 

under certain circumstances. 

Medical debt is prevalent in the 

United States, with 20 percent of 

households reporting that they had 

medical debt in 2022.217 Reflecting this 

prevalence, medical collections have 

recently comprised the majority of 

credit collection tradelines found on 

consumer reports.218 Like other 

information on consumer reports, 

medical collections information may be 

used by creditors to assess a consumer’s 

ability to handle credit obligations. 

Medical collections may result from 

unplanned expenditures, making 

medical collections information on 

consumer reports a potentially noisy or 

inaccurate signal of a consumer’s ability 

to meet credit obligations. In the United 

States, high health care prices, uneven 

insurance coverage, complex health 

insurance networks, and cost-sharing 

features of health insurance may cause 

unexpected or chronic illnesses to result 

in large medical bills for individual 

consumers. Due to opaque medical 

pricing and billing practices, consumers 

often do not know the cost of medical 

services at the time those services are 

incurred, and may receive medical bills 

that they are uncertain they actually 

owe.219 Some consumers are unable to 

pay these bills on time, and some of 

these past-due medical bills eventually 

become medical collections. 

Multiple consumer advocates and at 

least one researcher submitted 

comments agreeing with the CFPB’s 

understanding of how many consumers 

acquire medical debt, though one 

individual stated that only a fraction of 

medical debt is the result of an 

unavoidable emergency. The CFPB 

understands that 72 percent of 

consumers with medical debt reported 

that the debt originated from a one-time 

or short-term medical expense, such as 

for treatment from an accident or a 

single hospital stay, implying that a 

substantial fraction of medical debt 

results from unplanned expenditures.220

Another factor that potentially makes 

medical collections an imprecise signal 

is that they are unevenly reported. Many 

health care providers allow debt 

collectors to furnish to consumer 

reporting agencies, while others do not. 

Because of this, it is possible for 

consumers’ medical debt in collections 

to be included unevenly on consumer 

reports, potentially leading to different 

financial outcomes. While a consumer 

could theoretically be able to factor this 

into their decision when selecting a 

health care provider, it is more likely 

that a consumer is not aware of which 

health care providers furnish and 

usually does not choose a health care 

provider based solely on a health care 

provider’s collection policies, if they 

consider them at all.221

When creditors base underwriting 

decisions on information that is 

unevenly reported and potentially 

erroneous, an economic tradeoff arises. 

Creditors balance the probabilities of 

making two types of error when 

deciding whether to lend to consumers. 

The first type of error occurs when 

creditors lend to consumers who are 

unable to repay the loan. The second 

type of error occurs when creditors 

choose not to lend to consumers who 

are able and willing to repay. Creditors 

lose potential revenues when they 

decline credit for consumers with 

reported medical collections. Similarly, 

consumers, who would have benefitted 

from access to credit, also lose from 

being denied credit because of reported 

medical collections. 

The likelihood of making each of 

these types of error is affected by the 

informativeness of the signal medical 

collections provide to creditors. When 

medical collections are reported for 

debts that do not exist (for instance, 


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222Loretta J. Mester, Fed. Rsrv. Bank of Phila., 

What’s the Point of Credit Scoring?, Bus. Rev., at 

6 (Sept./Oct. 1997), https://

www.philadelphiafed.org/-/media/frbp/assets/ 

economy/articles/business-review/1997/septemberoctober/brso97lm.pdf. 

223Press Release, Atty. Gen’s. Off., State of Ohio, 

Attorney General DeWine Announces Major 

National Settlement with Credit Reporting 

Agencies, (May 20, 2015), https://www.ohioattorney

general.gov/Media/News-Releases/May-2015/ 

Attorney-General-DeWine-Announces-MajorNational-S. 

224Fredric Blavin et al., Urban Wire, Urban Inst., 

Medical Debt Was Erased from Credit Records for 

Most Consumers, Potentially Improving Many 

Americans’ Lives (Nov. 2, 2023), https://

www.urban.org/urban-wire/medical-debt-waserased-credit-records-most-consumers-potentiallyimproving-many. 

225Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point, 

at 4 (Mar. 2024), https://files.consumerfinance.gov/ 

f/documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

because medical bills have been paid by 

insurance) and are prevalent, using this 

information will tend to increase the 

likelihood of the second type of error, 

without reducing the likelihood of the 

first type of error. In that situation, 

creditors who use medical collection 

information would benefit from not 

considering this information in their 

credit decisions. When medical 

collections are reported on the basis of 

debts that may in fact impair 

consumers’ future repayment and are 

prevalent, creditors would experience a 

reduction in revenue if they do not 

consider medical collections in their 

credit decisions, due to an increase in 

the likelihood of the first type of error. 

As a result, whether creditors would 

benefit from not being able to consider 

medical collections in their credit 

decisions is an empirical question. As 

discussed in part XII, Technical 

Appendix, empirical analysis suggests 

that, on balance, preventing creditors 

from using medical collection 

information in credit decisions would 

result in creditors extending credit to 

more consumers without diminishing 

the average performance of newly 

opened credit accounts. 

As noted by a researcher commenter, 

credit scores that exclude or 

underweight medical debt were created 

in response to market demand, but 

market forces have not yet driven 

creditors to cease using medical debt 

information in underwriting. The CFPB 

agrees that if creditors could in fact 

benefit from disregarding medical debt 

information when making credit 

decisions, one would expect that 

creditors would have abandoned the 

practice out of their own profit motive. 

While, as discussed above, the industry 

has trended in this direction in recent 

years, the transition has not occurred 

fully, or quickly. The CFPB 

hypothesizes that the nexus of current 

contracts, expectations, and 

institutional structures that govern 

creditors’ behavior prevents markets 

from moving to a potentially better 

equilibrium outcome. For instance, the 

market for mortgages is heavily driven 

by the secondary market for those loans. 

Similar factors likely drive creditor 

behavior in other consumer loan 

markets. Mortgage originators must 

follow underwriting practices that are 

expected by buyers in the secondary 

market, or they will not be able to 

securitize their loans. Since 

consideration of medical debt 

information has been expected by the 

market (if only implicitly through the 

use of commercially available credit 

scores), it is difficult for any one firm to 

move away from using that information, 

even if doing so would not increase 

risks for investors.222

The rule would generally prohibit 

creditors from considering medical debt 

information from consumer reports in 

underwriting decisions. Consequently, 

the incentive for medical debt holders 

and collectors to furnish to consumer 

reporting agencies would decrease. As a 

result, the rule would enhance 

consumers’ privacy with respect to their 

medical information, while also 

reducing the likelihood that the uneven 

reporting of medical collections would 

affect credit outcomes. While the rule 

would reduce the amount, though not 

necessarily the quality, of information 

on which creditors can base 

underwriting decisions, the CFPB 

expects that, over time, those credit 

scoring models that currently use 

medical collections would be adjusted 

to reweight the remaining information 

on consumer reports. In the long run, 

the expected adjustments to credit 

scoring models may help markets move 

toward a more efficient allocation of 

credit. 

Adjustments to credit scoring models 

may result in credit being extended to 

more consumers who are able and 

willing to repay their credit obligations. 

This may allow consumers to benefit 

from increased access to credit and 

creditors to increase overall revenues. 

Moreover, since medical collections 

tradelines on consumer reports are 

prone to error, removing medical debt 

from consumer reports could reduce the 

need for dispute resolution, potentially 

saving time and resources for 

consumers, consumer reporting 

agencies, and furnishers of medical debt 

information. 

B. Baseline for Consideration of Costs 

and Benefits 

The impact analysis compares the 

rule’s potential benefits and costs 

against a baseline in which the CFPB 

takes no regulatory action. This baseline 

includes existing Federal and State law 

and current furnishing practices. Under 

the baseline, creditors are generally 

allowed to consider medical collections 

information on consumer reports in 

underwriting decisions due to the 

financial information exception at 

§ 1022.30(d). 

Over the last few years, the three 

NCRAs implemented several changes in 

the consumer reporting of medical debt. 

In September 2017, as part of a 

settlement with 31 State attorneys 

general, the NCRAs implemented a 180- 

day waiting period before including 

furnished medical collections on 

consumer reports.223 In July 2022, the 

NCRAs voluntarily extended the waiting 

period from 180 days to one year and 

removed all paid medical collections 

from consumer reports. Finally, in April 

2023, the NCRAs voluntarily removed 

both paid and unpaid medical 

collections under $500 from consumer 

reports.224

A researcher commenter cited 

research showing that these voluntary 

NCRA reporting changes 

disproportionately benefited consumers 

in census tracts that had higher average 

incomes or had larger white shares of 

the population. The commenter stated 

that disparities in credit access persist 

for consumers who live in lower-income 

or non-white communities. The CFPB 

agrees and its own research has reached 

similar findings.225

It is the CFPB’s understanding that 

health care providers and debt 

collectors they contract with currently 

use three types of collection practices to 

collect medical debt, often in 

combination: contacting consumers by 

mail, phone, or other means; debt 

collection litigation; and furnishing 

medical collections information to 

consumer reporting agencies. The 

impact analysis considers how health 

care providers and debt collectors may 

respond to the rule by increasing their 

use of the first two collection practices 

if furnishing becomes a less effective 

means of inducing payment. 

The evolving landscape of State laws 

and consumer reporting practices may 

change medical collections reporting in 

the absence of the rule, affecting the 

baseline. The voluntary changes 

recently implemented by the NCRAs 

could be reversed at any time, and such 

reversals would tend to amplify the 

impacts of the rule. 


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226See, e.g., Colo. Rev. Stat. section 5–18–109; 

N.Y. Pub. Health Law art. 49–A; 2024 Conn. Act 

24–6; 2024 Va. Acts ch. 751. 

227Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point, 

at 3 (Mar. 2024), https://files.consumerfinance.gov/ 

f/documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

228Nat’l Pub. Radio, Nursing homes are suing 

friends and family to collect on patients’ bills (July 

28, 2022), https://www.npr.org/sections/healthshots/2022/07/28/1113134049/nursing-homes-aresuing-friends-and-family-to-collect-on-patientsbills. 

229 FCC v. Prometheus Radio Project, 592 U.S. 

414, 427 (2021). 

230Andrew R. Nigrinis, Economic Analysis of the 

Consumer Financial Protection Bureau’s 

Prohibition on Creditors and Consumer Reporting 

Agencies Concerning Medical Information 

(Regulation V) (July 2024), https://policymakers.

acainternational.org/wp-content/uploads/2024/07/ 

AndrewNigrinisEconomicAnalysis-CFPB-FCRANPRM-July2024.pdf. The Report was included as an 

exhibit to a comment by the debt collector trade 

association commenter, and also submitted by its 

author in his individual capacity. 

231The Report does not describe how respondents 

to the first wave of the survey provided data for the 

fourth quarter of 2023 when they were surveyed 

before the end of that quarter. 

In the current state of the world, 

creditors are generally allowed to 

consider medical debt information in 

underwriting decisions, including 

medical collections information found 

on consumer reports. Some recently 

passed State laws establish when 

medical collections information 

originating from these States can be 

furnished to consumer reporting 

agencies or included on consumer 

reports.226 As a result of their voluntary 

reporting changes, the only medical 

collections that the NCRAs currently 

include in their consumer reports are 

those that: (1) are more than one year 

past due, (2) are for collection amounts 

greater than $500, and (3) are unpaid, in 

addition to those that (4) would not 

violate State laws that restrict or 

prohibit consumer reporting of medical 

collections. By August 2023, after the 

voluntary NCRA changes were fully 

implemented but before most of the 

State-level changes took effect, an 

estimated 5 percent of consumers had 

medical collections on their consumer 

reports.227 The rule removes these 

remaining medical collections from, and 

generally prohibits future medical 

collections from being included in, 

consumer reports provided to creditors. 

C. Data and Evidence 

1. Primary Sources 

The CFPB’s analysis of costs, benefits, 

and impact is informed by data from a 

range of sources. As discussed in part 

III.A, when the interventions discussed 

in this rule were part of the broader 

Consumer Reporting Rulemaking, the 

CFPB convened a Small Business 

Review Advisory Panel in October 2023 

to gather input from small businesses. 

The discussions at the panel meetings 

and the comment letters submitted by 

small entity representatives during this 

process were presented in a Panel 

Report completed in December 2023. 

The CFPB also invited and received 

feedback on the proposals under 

consideration from other stakeholders, 

including stakeholders who were not 

small entity representatives. The impact 

analysis is further informed by 

academic research, reports on research 

by industry and trade groups, 

practitioner studies, and comment 

letters received by the CFPB. Where 

used, these specific sources are cited in 

this analysis. 

The CFPB also used its own 

Consumer Credit Information Panel 

(CCIP) to estimate the potential impacts 

of the proposed rule on consumers and 

creditors. The CCIP is a 1-in-50, 

nationally representative sample of 

deidentified consumer reports from one 

of the three NCRAs. The data allowed 

the CFPB to conduct analyses of the 

effect of medical collections information 

on the success of a consumer’s 

application for credit (determined by 

whether a creditor’s inquiry following 

such an application led to the 

origination of a credit account or, in 

other words, inquiry success) and future 

credit account delinquencies. Such 

analyses are useful for quantifying the 

rule’s potential impacts to consumers 

and creditors. Because the CCIP data are 

drawn from consumer reports from a 

single NCRA and because medical 

collections are unevenly reported, the 

data might not contain all medical 

collections that exist in the United 

States. 

To quantify health care providers’ 

exposure to unpaid medical bills, the 

CFPB used data from the Hospital Cost 

Reporting Information System (HCRIS), 

which is administered by the Centers for 

Medicare and Medicaid Services. The 

HCRIS data contain annual cost reports 

filed by Medicare-certified hospitals in 

the United States. The data comprise 

information on hospitals, their 

revenues, operating costs, and bad debt 

expenses not reimbursable by Medicare. 

While almost all hospitals file these cost 

reports, the data do not include unpaid 

medical debts owed to health care 

providers that are not hospitals.228

Due to these data limitations, the 

analysis presented in this part generally 

provides a qualitative discussion of the 

rule’s costs and benefits and includes 

quantitative estimates whenever 

possible. 

Multiple commenters, including at 

least one bank trade association, 

consumer reporting agency trade 

association, and consumer reporting 

agency, as well as multiple debt 

collectors and researchers, stated that 

the CFPB did not adequately gather data 

and estimate impacts in the proposed 

rule. The CFPB uses available data, 

economic reasoning, and evidence 

provided by commenters to justify its 

conclusions in the below impact 

analysis. The Supreme Court has 

acknowledged that executive branch 

decision-making relies on imperfect 

data, and ‘‘[t]he APA [Administrative 

Procedure Act] imposes no general 

obligation on agencies to conduct or 

commission their own empirical or 

statistical studies.’’ 229 In this rule the 

CFPB has gone beyond the minimum 

requirements of the APA and section 

1022(b)(2)(B) of the CFPA by conducting 

its own statistical study, documented in 

the Technical Appendix. 

2. ACA International Survey 

The CFPB requested data that can be 

used to quantify the analysis of impacts, 

or submission of studies that contain 

relevant estimates that can be used in 

the analysis of impacts. The CFPB 

received a research report 

commissioned by a debt collection 

industry trade association which 

critiqued several elements of the 

analysis in the proposal and introduced 

some new evidence. The CFPB 

discusses the findings of that report 

(referred to as the Report) below.230

The Report documents the results of 

a survey of members of ACA 

International, a debt collector trade 

association, executed in two ‘‘waves’’ 

which surveyed different samples of 19 

debt collectors, for a total of 38 surveyed 

debt collectors across both waves. The 

first wave of the survey was fielded in 

the last two months of 2023 and the 

second wave of the survey was fielded 

in May 2024. Both waves asked about 

medical debt referrals and collections in 

the first and second quarters of 2022 

and 2023, as well as in the fourth 

quarter of 2023.231 The surveys also 

requested the debt collectors’ predicted 

changes in medical debt collection rates 

if they were no longer permitted to use 

consumer reporting as a debt collection 

practice. Broadly, the surveyed debt 

collectors reported lower referrals and 

collected amounts in 2023 than in 2022 

and reported lower expected medical 

debt collection rates if consumer 

reporting was not permitted. The CFPB 

does not find the results of this survey 


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232ACA Int’l, ACA International Advocacy Fact 

Sheet, at 5 (2022), https://

www.acainternational.org/wp-content/uploads/ 

2022/WI/Advocacy-Booklet-May2022-FINAL.pdf. 

233See U.S. Census Bureau, 2017 Economic 

Census Data, https://www.census.gov/programssurveys/economic-census/year/2017/economiccensus-2017/data.html (last revised Feb. 27, 2024). 

234California imposed new conditions on the sale 

of hospital medical debt to debt buyers in 2022, 

including that the hospital has either found the 

patient ineligible for financial assistance (income 

above 400 percent of the Federal poverty level and 

annual out-of-pocket costs at the hospital lower 

than the lesser of 10 percent of the patient’s current 

family income or the patient’s family income in the 

prior 12 months) or found the patient has not 

responded to attempts to offer financial assistance 

for 180 days. A previous law prohibits collection 

actions before 150 days after initial billing if the 

patient lacks coverage or may have high medical 

costs. See 2021 Cal. AB 1020. In addition, after this 

survey was performed, California’s governor signed 

a law on September 24, 2024 to pass its own 

prohibition on credit reporting agencies including 

medical debts in consumer credit reports. SB 1061. 

235Frederic Blavin et al., Urban Inst., Brief: Which 

County Characteristics Predict Medical Debt? (June 

15, 2022), https://www.urban.org/research/ 

publication/which-county-characteristics-predictmedical-debt. 

236Ctrs. for Medicare & Medicaid Servs., NHE 

Fact Sheet, https://www.cms.gov/data-research/ 

statistics-trends-and-reports/national-healthexpenditure-data/nhe-fact-sheet (last modified Sep. 

10, 2024). 

237The text of the Report compares the first 

quarter of 2022 to the fourth quarter of 2023. As 

discussed above in this final rule, the CFPB would 

expect and the Report shows significant seasonality 

in debt collection, such that comparing the first 

quarter of one year to the fourth quarter of another 

year is likely to pick up this seasonal variation, 

rather than any impacts of the voluntary changes by 

the NCRAs. As such, the CFPB focuses on the 

comparison between the second quarter of 2022 and 

the second quarter of 2023. 

to be reliable evidence of the likely 

effects of the rule. 

Beyond specific concerns about the 

results of the surveys in the Report, 

which the CFPB describes below, the 

CFPB notes that the surveys do not 

appear to have been representative of 

the debt collection industry. The Report 

does not provide information on how 

these debt collectors were selected for 

the surveys, and it is unlikely that these 

38 debt collectors are representative of 

the 2,100 members of ACA 

International, much less representative 

of debt collectors overall.232 The Report 

does not provide data on the states in 

which the 38 debt collectors are located 

in, but rather the states in which the 

debt collectors’ referring ‘‘client 

accounts’’ (which the CFPB assumes to 

mean health care providers) are located. 

Across both surveys, nearly 47 percent 

of the client accounts held by surveyed 

debt collectors—almost half—were 

located in California. In contrast, data 

from the 2017 Economic Census 

indicate that only around 10 percent of 

collection agencies were located in 

California.233 The survey responses are 

not weighted to be more representative 

of debt collection nationwide. The 

overrepresentation of California medical 

debt may be especially likely to bias the 

inferences drawn from the surveys, as 

the CFPB understands that California’s 

consumer protections that impact the 

debt collection industry are more robust 

than those in other states.234

Additionally, just under 12 percent of 

survey respondents’ client accounts 

were from Southern states, but medical 

debt is heavily concentrated in Southern 

states. Ninety-nine of the 100 counties 

with the largest shares of adults with 

medical collections are located in the 

South, as described in research cited by 

the Report.235 The survey is unlikely to 

be representative of debt collectors in 

the South who may be more likely to 

have medical debt as a large share of 

their portfolio. As such, although the 

CFPB discusses the specific arguments 

of the Report that are based on its 

survey of ACA International members, 

on balance the CFPB determines that 

this survey does not provide reliable 

evidence that can be relied upon to 

evaluate the benefits, costs and impacts 

of this final rule. 

The Report includes aggregated dollar 

amounts of medical debt referred to debt 

collectors from health care providers 

(‘‘referrals’’) and total collections 

recovered, as reported by the 38 survey 

respondents. The Report indicates that, 

for survey respondents, there were more 

referrals to debt collectors by health care 

providers in 2023 than in 2022, though 

the Report does not discuss whether this 

difference is statistically significant. The 

Report interprets this result as showing 

that consumers have lowered 

willingness to pay their medical bills 

after the voluntary NCRA reporting 

changes were completed in April 2023. 

Setting aside the issue of 

representativeness discussed above, the 

CFPB finds that the increase in medical 

collection referrals among survey 

respondents documented in the Report 

is not likely due to the voluntary 

changes by the NCRAs in 2022 and 

2023. First, the Report does not account 

for growth in health care costs. National 

health expenditure spending grew by 

4.1 percent in 2022 and was expected to 

grow by 7.5 percent in 2023.236 This 

would explain much of the growth in 

referral amounts between 2022 and 2023 

by itself. The data in the Report also 

show indications of seasonality, which 

the Report makes no effort to adjust for. 

That is, referrals may be routinely 

higher in the winter compared to the 

spring, such that the Report’s 

comparison of the referrals in the 

second quarter of 2022 to the first 

quarter of 2023 primarily captures this 

seasonal change. Indeed, the Report 

shows that referral amounts are much 

closer to the 2022 amounts by the fourth 

quarter of 2023. Additionally, the 

Report finds that referrals fell between 

June 2022 and December 2023 in the 

South, where medical debt is more 

prevalent than other regions. If there 

were declines in referral amounts 

because of the voluntary NCRA 

reporting changes, they would have 

been more likely to occur in the fourth 

quarter of 2023 than in the second 

quarter, because the removal of debts 

under $500 from consumer reports did 

not occur until April 2023, but this is 

not what the data show. Given these 

concerns, the CFPB determines that it 

cannot rely upon the Report as evidence 

that health care provider referrals were 

impacted by the voluntary NCRA 

reporting changes, and thus would be 

likely to be impacted by this final rule. 

The Report constructed collection 

rates by dividing the aggregate 

collection data by the aggregate referral 

data for each debt collector, in each 

quarter. The Report provided median 

collection rates in each quarter by 

geographic region and for the United 

States overall. Collection rates are 

similar across the first two quarters of 

2022 and the first quarter of 2023, but 

there appears to be a sizable reduction 

in the median collection rate in the 

second quarter of 2023, falling to 11.7 

percent from 14.5 percent in the second 

quarter of 2022. Collection rates fell to 

9.6 percent by the fourth quarter of 

2023.237 The Report interprets this as 

showing that consumers were receiving 

a message that medical debts do not 

need to be paid during this time period. 

Despite the surveys’ methodological 

flaws outlined above, taking the data of 

the Report at face value, the CFPB does 

not agree with the interpretation that 

consumers were more likely to believe 

that medical debts do not need to be 

paid in the second quarter of 2023, in 

comparison to the second quarter of 

2022. Instead, the CFPB expects that 

this change in the collection rate is, in 

large part, the result of the removal of 

medical debts under $500. After 

medical debts under $500 could no 

longer be reported to the NCRAs as of 

April 2023, debt collectors may have 

prioritized alternative mechanisms for 

collecting older debts under $500 

which, absent the voluntary change, 

they may have collected through 

collection tools including consumer 

reporting. This change in debt collection 

practices may have temporarily reduced 

collection rates until debt collectors 


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238The CFPB notes that the rule would not 

prevent debt collectors from furnishing medical 

debt information which could be included on 

consumer reports sent to landlords, employers, 

other debt collectors, or consumers, so these 

estimates may overestimate the impact of the rule. 

239Though the Report describes this as a 

‘‘liquidation rate’’, it appears to be equivalently 

measured as the dollar amount collected divided by 

the dollar amount referred, which the Report also 

describes as a ‘‘collection rate.’’ The CFPB uses 

‘‘collection rate’’ throughout its discussion. 

240The CFPB focuses on responses from the later 

wave of the survey documented in the Report, as 

this took place after the voluntary changes by the 

NCRAs and some recent changes in State laws, and 

thus is closer to the baseline. 

241Br. for the Nev. Hosp. Ass’n as Amicus Curiae, 

Aargon Agency, Inc. v. O’Laughlin, 70 F.4th 1224 

(9th Cir. 2023), https://www.acainternational.org/ 

wp-content/uploads/2022/04/Dkt-13-Motion-to-fileAmicus-Curiae-Brief-Amicus-Curiae-Brief.pdf (filed 

Apr. 12, 2022). 

242See Ryan Sandler & Zachary Blizard, 

Consumer Fin. Prot. Bureau, Recent Changes in 

Medical Collections on Consumer Credit Records 

Data Point, at 4 (Mar. 2024), https://

files.consumerfinance.gov/f/documents/cfpb_

recent-changes-medical-collections-on-consumercredit-reports_2024-03.pdf. 

243Raymond Kluender et al., Medical Debt in the 

US, 2009–2020, JAMA (July 20, 2021), https://

jamanetwork.com/journals/jama/fullarticle/ 

2782187. 

244See id. at Tbl. 

245Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point 

(Mar. 2024), https://files.consumerfinance.gov/f/ 

documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

246See Raymond Kluender et al., Medical Debt in 

the US, 2009–2020, at Tbl., JAMA (July 20, 2021), 

https://jamanetwork.com/journals/jama/fullarticle/ 

2782187. 

implemented equally effective practices 

for debts under $500, or until debt 

collectors changed the types of debt for 

which they accept referrals, as debt 

collectors could choose not to service 

debt that they expect would only be 

collectable with the use of consumer 

reporting. The CFPB expects there may 

be a similar temporary reduction in 

collection rates under the rule. 

The Report also summarizes debt 

collectors’ subjective expectations as to 

how a cessation of consumer reporting 

of medical debts would impact 

collection rates, using survey responses 

from the debt collector respondents.238

The CFPB does not find these results to 

be a reliable way of estimating the likely 

impacts of this final rule. The CFPB 

does not believe that the respondents to 

the survey of ACA members possessed 

any means to provide a precise 

numerical forecast of the effect of the 

proposal on collection rates. Instead, the 

survey responses convey the subjective, 

qualitative opinions of the surveyed 

debt collectors, who have a financial 

interest in overestimating the costs of 

the proposal (to the extent that higher 

estimated costs reduce the likelihood 

that the proposal is finalized). While 

qualitative views can be valid, it is not 

appropriate to treat these as quantitative 

measures that can be aggregated and 

used to calculate median and mean 

values, as the Report does. The Report 

indicates that the median debt collector 

expected the collection rate 239 to 

decrease by 2.0 percent if debt collectors 

ceased consumer reporting.240 In the 

South, where the highest concentrations 

of medical collections occur, the median 

expected change was 1.0 percent. 

The Report argues that, if anything, 

the subjective estimates of the ACA 

International survey respondents 

understate the likely impact of the 

proposed rule. The Report states that 

respondents’ expected reductions in 

collection rates were comparable to 

estimates from the Nevada Hospital 

Association (NHA) of the likely impact 

of Nevada State legislation that would 

prevent medical debts from being 

included on consumer reports for at 

least 60 days. The Report states that 

because the proposed rule would 

instead prevent medical debts from ever 

being included on consumer reports, 

respondents’ estimates in response to 

the survey should have been higher than 

the NHA estimates. However, the Report 

misstated the requirements of the 

Nevada legislation. This State law 

requires debt collectors to provide 

written notification to a consumer 60 

days before they take any action, not 

just consumer reporting, to collect a 

medical debt.241 This State law is not 

equivalent to the final rule and the 

CFPB does not interpret the NHA 

estimate as implying that ACA 

International survey respondents 

underestimated the impacts of the rule. 

The Report uses its survey of ACA 

International members and publicly 

available data sources to estimate the 

impact of the rule on the aggregate 

amount of recoverable medical debt. 

The Report uses estimates for the 

existing stock of medical debt that 

would be impacted by the rule, as well 

as the flow of new medical debt. The 

CFPB does not find these estimates to be 

reasonable, as described below. 

The Report assumes that the aggregate 

amount of medical debt that would be 

impacted by the rule is about $220 

billion, based on an estimate from the 

Kaiser Family Foundation (KFF) of the 

total amount of medical debt 

outstanding. The CFPB estimates that 

approximately $50 billion in medical 

collections is currently included on 

consumer reports.242 The CFPB expects 

that the stock of medical debt that is not 

included on consumer reports 

comprises debt that is at least seven 

years old and therefore cannot be 

included on a consumer report under 

the FCRA, debt that is not subject to 

consumer reporting because of NCRA 

policies or the preferences of the debt 

holder, and debt that may be eligible for 

consumer reporting but is not reported 

because the debt holder expects that 

reporting would not sufficiently 

increase the likelihood of payment. 

Recovery rates of debts that fall into 

these three categories will not be 

directly affected by the rule, so the 

CFPB’s $50 billion estimate is a better 

approximation of the relevant inventory 

of medical debt. 

To estimate the annual flow of 

medical debt that newly appears on 

consumer reports, the Report cited 

Kluender et al. (2021), which found that 

13 percent of consumers incurred 

medical debt, with a mean value of 

$2,396, in 2020.243 The Report used an 

estimate of 258.3 million adults in the 

United States and concluded that new 

medical debt accrues at a rate of $80.46 

billion per year. Though the Report used 

the KFF total inventory of medical debt 

to estimate the stock of medical debt, it 

used medical collections information 

provided on consumer reports to 

estimate the flow of medical debt. The 

CFPB agrees with the Report’s decision 

to use medical collections included on 

consumer reports, as this reflects the 

portion of medical debt that will be 

impacted by the rule. However, the data 

from 2020 are outdated and do not 

reflect the amount of medical debt that 

is included on consumer reports at this 

rule’s baseline. The CFPB assumes that 

the ratio between the stock and flow of 

consumers with medical collections 

included on consumer reports would 

have remained unchanged between 

2020 and 2023, even though the stock 

and flow would have both responded to 

the voluntary NCRA reporting changes. 

Using evidence from Kluender et al. 

(2021), the CFPB finds that this flow-tostock ratio was 0.73 in 2020.244 The 

CFPB found that in June 2023, 15.6 

million consumers had medical 

collections on their consumer 

reports.245 Applying the ratio from 

Kluender et al. (2021) allows the CFPB 

to estimate that 11.4 million consumers 

incur medical collections on their 

consumer reports each year. The CFPB 

assumes that this flow of medical 

collections would be of similar dollar 

amounts to the stock of medical 

collections because Kluender et al. 

(2021) found that the difference between 

flow and stock medical collections was 

just $29.246 The CFPB found that the 

average amount of a medical collection 


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3322 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

247Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point 

(Mar. 2024), https://files.consumerfinance.gov/f/ 

documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

248This estimate is not equivalent to the annual 

flow of medical debt because most medical debt is 

not included on consumer reports and, since June 

2022, medical debt must be at least one year past 

due before it can be added to a consumer report. 

Instead, this estimate provides the annual flow of 

medical debt that newly appears on a consumer 

report. 

249Though the Report exclusively describes 

survey respondents’ expectations for the change in 

collection rates under the proposal in percent 

terms, it is possible that survey respondents 

interpreted this request in percentage point terms 

instead. In this case, the collection rate would be 

expected to fall from 9.6 percent to 1.6 percent. 

250Off. of Mgmt. & Budget, OMB Circular No. A– 

4 (Nov. 9, 2023), https://www.whitehouse.gov/wpcontent/uploads/2023/11/CircularA-4.pdf. 

251The OMB’s long-term estimates only go so far 

as 150 years, with increasingly smaller discount 

rates. Off. of Mgmt. & Budget, OMB Circular No. A– 

4 Appendix (Nov. 9, 2023), https://

www.whitehouse.gov/wp-content/uploads/2023/11/ 

CircularA-4Appendix.pdf. 

252 If the survey respondents’ expected change in 

collection rates under the proposal is provided as 

a percentage point change, instead of a percent 

change, then the collection rate in this estimate 

would fall from 9.6 percent to 7.6 percent under the 

proposal. The estimate for the 10-year reduction in 

recoverable medical debt in this scenario is 

approximately $8 billion. 

253 Kenneth P. Brevoort & Michelle Kambara, 

Consumer Fin. Prot. Bureau, Data point: Medical 

debt and credit scores (May 2014), https://

files.consumerfinance.gov/f/201405_cfpb_report_

data-point_medical-debt-credit-scores.pdf. See also 

Kenneth P. Brevoort & Michelle Kambara, Are All 

Collections Equal? The Case of Medical Debt, 11:4 

J. Credit Risk, at 73–97 (Dec. 2015). 

on a consumer report in June 2023 was 

$3,148.70.247 Therefore, the CFPB 

estimates that new medical debt in 

collections that appears on consumer 

reports accrues at an annual rate of 

approximately $36 billion.248

The Report next applies the mean 

expected change in the collection rate 

for the debt collectors included in its 

surveys, estimating that there would be 

an 8 percent reduction in expected 

collection rates. The CFPB understands 

that the median better approximates the 

expected impact of the rule because it 

reduces the influence of outlier survey 

responses, and further expects that the 

results from the second wave of the 

survey better reflect conditions under 

the baseline because debt collectors had 

ample time to understand and respond 

to the NCRA reporting changes. 

Therefore, though the CFPB disagrees 

that these survey responses are 

informative as described above, the 

CFPB uses a 2 percent reduction in 

collection rates in its estimation of the 

change in recoverable medical debt 

under the rule below. 

The Report applies an 8 percent 

reduction in expected collection rates to 

the entire stock and flow of estimated 

medical debt, which assumes that 

medical debt has a 100 percent expected 

collection rate at baseline. This is 

contrary to evidence in the Report, 

which showed that the median 

collection rate was just 9.6 percent 

amongst survey respondents in the most 

recent quarter for which they were 

surveyed. Therefore, the Report’s 8 

percent reduction in the collection rate 

should have been applied to the 

Report’s estimated collection rate, 

which would find that collection rates 

would fall from 9.6 percent to 8.8 

percent under the rule.249

The Report uses a present value of 

growing perpetuity formula to estimate 

the indefinite loss of recoverable 

medical debt under the rule. The Report 

assumes a 5.11 percent discount rate 

and a 4.1 percent annual growth rate to 

estimate that there would be a $654.87 

billion loss in recoverable medical debt 

over an infinite time horizon. 

The CFPB produces its own estimate 

for the aggregate loss in recoverable 

medical debt under the rule based on 

the evidence provided in the Report. 

The CFPB uses a 2 percent change in the 

collection rate, such that collection rates 

would fall from 9.6 percent to 9.4 

percent under the rule, as well as its 

estimates for the stock and flow of 

medical debt, $50 billion and $36 

billion, respectively. The CFPB uses the 

Report’s 4.1 percent annual growth rate 

but assumes a 2 percent discount rate, 

as recommended by the Office of 

Management and Budget (OMB) in their 

guidance to regulatory agencies for cost 

and benefit analyses.250 Additionally, 

the CFPB only considers a 10-year time 

horizon, as OMB has no guidance for 

the discount rate in an infinite 

horizon.251 Applying a standard 

discounted cash flow formula, the CFPB 

estimates a reduction in recoverable 

medical debt of approximately $900 

million under the rule.252

The Report interprets its estimate of 

the reduction in collection rates under 

the proposed rule as the cost for health 

care providers, rather than for medical 

debt holders overall. Many health care 

providers sell medical debt to debt 

buyers, who then retain the legal right 

to collect on the debt. The CFPB is not 

aware of the portion of medical debt 

that is held by health care providers but 

understands that the aggregate estimates 

of the reduction in medical debt 

recoverable under the rule would only 

partially impose direct costs on health 

care providers. 

3. Brevoort and Kambara (2014) 

In the proposed rule, the CFPB cited 

previous CFPB research by Brevoort and 

Kambara (2014), which showed that 

medical collections tradelines are less 

predictive of serious delinquency than 

nonmedical collections.253 This 

research showed that, holding credit 

scores constant, a consumer who has 

more medical collections than 

nonmedical collections may be less 

likely to become seriously delinquent 

within two years than a consumer with 

more nonmedical than medical 

collections. 

Multiple commenters, including a 

bank trade association, a consumer 

reporting agency trade association, a 

debt collector trade association, a health 

care provider, a NCRA, a researcher, and 

an individual, disputed the relevance of 

this research to the proposed rule. A 

NCRA commenter analyzed its own data 

in response to Brevoort and Kambara 

(2014) and found that consumers with 

medical collections have delinquency 

rates that are at least 8 percent higher 

than consumers with nonmedical 

collections. The commenter did not 

state whether it held other consumer 

characteristics constant while making 

this comparison. The commenter further 

found that adding medical collections to 

a model with nonmedical collections 

increased predictive fit by 34 percent. 

However, the commenter did not 

provide any details about the other 

variables included in this model. The 

CFPB expects that a model with few 

variables would experience a large 

increase in predictive fit from the 

addition of most consumer report 

characteristics: if the model does not 

perform well at baseline, there is ample 

margin for predictive fit to improve. 

This does not imply that medical 

collections would increase predictive fit 

by 34 percent, or at all, in models used 

for credit scoring or credit eligibility 

determinations. 

Broadly, the CFPB agrees that 

Brevoort and Kambara (2014) would be 

more relevant to the rule if it were 

updated with more recent data or 

included some additional analyses as 

suggested by commenters. Since the 

impact of the rule derives from the 

prohibition on reporting of medical 

collections, the CFPB conducted new 

research, described in the Technical 

Appendix to the NPRM and included 

below in part XII, that isolated the effect 

of reporting from other effects that the 

presence of medical collections may 

have on consumers’ financial outcomes. 

Based on this research, the CFPB 

expects that medical collections can be 


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254Bus. Wire, Equifax, Experian, and TransUnion 

Support U.S. Consumers with Changes to Medical 

Collection Debt Reporting (Mar. 18, 2022). 255Alyssa Brown & Eric Wilson, Consumer Fin. 

Prot. Bureau, Consumer Credit and the Removal of 

Medical Collections from Credit Reports (Apr. 

2023), https://files.consumerfinance.gov/f/ 

documents/cfpb_consumer-credit-removal-medicalcollections-from-credit-reports_2023-04.pdf. 

256The average credit score for consumers with 

medical collections in June 2023 was 582. See Ryan 

Sandler & Zachary Blizard, Consumer Fin. Prot. 

Bureau, Recent Changes in Medical Collections on 

Consumer Credit Records Data Point (Mar. 2024), 

https://files.consumerfinance.gov/f/documents/ 

cfpb_recent-changes-medical-collections-onconsumer-credit-reports_2024-03.pdf. 

257Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point, 

at 3–4 (Mar. 2024), https://

files.consumerfinance.gov/f/documents/cfpb_

recent-changes-medical-collections-on-consumercredit-reports_2024-03.pdf. 

removed from underwriting models 

without significantly reducing their 

ability to predict serious delinquency if 

underwriting models continue to 

include other variables that are 

sufficiently predictive of delinquency 

risk. The Technical Appendix shows 

that medical collections reporting likely 

reduces access to credit and creditor 

revenue. 

D. Coverage of the Rule 

Part VIII.B.4 provides a discussion of 

the estimated number and types of 

entities potentially affected by the rule. 

E. Potential Benefits and Costs to 

Consumers and Covered Persons 

The CFPB assessed the potential 

benefits and costs of the rule using the 

data and evidence described above, as 

well as comments submitted in response 

to the proposal. Based on the 

information available, the CFPB 

concludes that the rule is likely to 

confer a number of benefits, and limited 

costs, on consumers and covered 

persons. In brief, the CFPB expects that 

consumers will experience increased 

access to credit and a reduction in the 

use of consumer reporting to induce 

payment of medical collections, 

including those that may be inaccurate. 

The CFPB expects that the marginal 

loans provided under the rule would be 

similarly profitable to those that 

creditors provide at baseline, leading to 

increased revenue for creditors. The 

CFPB does not expect that consumers 

would be significantly less likely to pay 

their bills under the rule, and as a 

result, expects limited impacts on the 

revenues of health care providers and 

debt collectors. All potential benefits 

and costs are described in more detail 

below. 

1. Consumer Willingness To Pay 

Medical Bills 

Consumers facing debt collection 

attempts may pay or settle debts to 

remove the tradelines from their 

consumer reports, as medical 

collections are removed from the 

NCRAs’ consumer reports when paid.254

Previous research from the CFPB found 

evidence indicating that some 

consumers may act to remove medical 

collections from their consumer reports 

when they plan to apply for a 

mortgage.255 This suggests that 

furnishing can be an effective tool for 

inducing payment of debts. To the 

extent this is true, the rule could reduce 

consumers’ willingness to pay those 

medical debts that would or might be 

sent to collections and ultimately be 

furnished at baseline. 

Several health care providers, debt 

collectors, consumers, health care trade 

associations, the SBA Office of 

Advocacy, and at least one researcher 

and one credit union, stated that, with 

fewer repercussions for medical debt, 

consumers would not pay their medical 

debts under the proposed rule. Several 

debt collectors, at least one healthcare 

provider and one debt collection trade 

association stated that, because 

consumer willingness to pay medical 

bills would be lower under the 

proposed rule, there would be decreased 

recoveries and revenue for debt 

collectors and health care providers as 

a result. Multiple debt collector 

commenters provided specific estimates 

for expected reductions in recovery 

rates and revenues. At least one debt 

collector commenter and at least one 

health care provider stated that they 

expect a revenue decline close to 9 

percent because of decreased recovery. 

A debt collector commenter in the 

SBREFA process stated that there would 

be a significant decrease in the number 

of individuals with overdue medical 

debt who take proactive steps to resolve 

their accounts as a result of the 

proposed rule. In contrast, a consumer 

advocate commenter stated that 

consumers would be more likely to pay, 

even partially, if the proposed rule 

reduced coercive collection tactics. 

Another consumer advocate commenter 

stated that consumers would still pay 

their medical debts and there would be 

limited revenue impacts to health care 

providers, because health care providers 

and debt collectors have other strategies 

for inducing payment besides furnishing 

medical debt information to consumer 

reporting agencies. 

The CFPB acknowledges that if 

consumers are no longer concerned that 

medical collections will appear on their 

consumer report when they are seeking 

credit, they may have less incentive to 

pay their medical collections. However, 

the CFPB expects that only a few 

consumers would pay their medical 

collections in response to consumer 

reporting or the threat of consumer 

reporting under the baseline, but would 

not pay their medical collections in 

response to alternative collection 

mechanisms under the rule. This is 

because at the baseline most consumers 

with medical debt face little 

consequence from furnishing of a 

medical collections tradeline, for several 

reasons. For one, consumers would 

need to have medical collections over 

$500, as medical collections tradelines 

below $500 are suppressed at baseline. 

Also, consumers who have medical 

collections generally have fairly low 

credit scores, which already constrain 

their access to credit.256 As such, further 

reducing scores through the furnishing 

of medical collections may not have a 

meaningful impact on access to credit. 

The CFPB cannot precisely estimate the 

number of consumers who would be 

disincentivized to pay medical 

collections due to the rule, but at 

baseline fewer than 5 percent of 

consumers have medical collections, 

and as a result the share of consumers 

who would be disincentivized to pay is 

quite small, since it must necessarily be 

less than 5 percent.257

Multiple debt collectors, at least one 

health care provider, a credit union 

trade association, and an individual 

consumer commented that the proposed 

rule would encourage consumers to 

ignore eligibility for enrollment in 

support programs that help patients pay 

medical bills, including patient 

financing programs and other forms of 

financial assistance, because there 

would no longer be consequences for 

unpaid medical bills. The CFPB does 

not expect that consumers will respond 

to the rule by ignoring financial 

assistance. Consumers will remain 

liable for their medical debts, and it is 

implausible that removing the prospect 

of future consumer reporting will lead 

to many consumers forgoing support 

that would help them pay these debts. 

The rule is unlikely to substantially 

impact aggregate revenue for health care 

providers, as most health care revenue 

does not consist of consumers paying 

their bills after receiving treatment. The 

vast majority of health care providers’ 

revenues comes from insurance (e.g., 

Medicare, Medicaid, private insurance) 

and other third-party payers. Indeed, 

out-of-pocket spending by consumers at 

baseline only accounts for about 12 

percent of personal health care 


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258The CFPB calculated this estimate by dividing 

the aggregate amount of out-of-pocket spending in 

2020 by the aggregate amount of personal health 

care expenditures in 2020. Personal health care 

expenditures represent health expenses directly 

related to patient care, such as hospital care, 

physicians’ and dentists’ services, prescription 

drugs, eyeglasses, and nursing home care, and 

accounts for the largest shares of total national 

health expenditures. See Ctrs. for Medicare & 

Medicaid Servs., Health Expenditures by state of 

provider: summary tables (ZIP), https://

www.cms.gov/data-research/statistics-trends-andreports/national-health-expenditure-data/nhe-factsheet (last modified Sept. 10, 2024); Ctrs. for 

Medicare & Medicaid Servs., National Health 

Expenditures 2022 Highlights (Dec. 13, 2023), 

https://www.cms.gov/newsroom/fact-sheets/ 

national-health-expenditures-2022-highlights; Nat’l 

Ctr. for Health Stat., U.S. Ctrs. for Disease Control 

& Prevention, Health Care Expenditures, https://

www.cdc.gov/nchs/hus/topics/health-careexpenditures.htm (last reviewed Aug. 2024). 

259Approximately 2.5 percent of medical 

collections were marked as paid in the five years 

before paid medical collections were removed from 

consumer reports in June 2022. Consumer Fin. Prot. 

Bureau, Paid and Low-Balance Medical Collections 

on Consumer Credit Reports (July 27, 2022), https:// 

www.consumerfinance.gov/data-research/researchreports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/. 

260This range appears to come from a model form 

letter provided to debt collectors and healthcare 

providers by a consumer reporting industry trade 

group, but that form letter also does not cite a 

source for the statistic. See Meduit, CFPB Proposed 

Regulation Comment Samples (Aug. 2024), https:// 

www.cdiaonline.org/wp-content/uploads/2024/08/ 

Meduit.pdf. However, this is consistent with other 

industry sources on bad debt recovery rates for 

medical debt. See, e.g., MD Clarity, RCM Metrics 

Bad Debt Recovery Rate, https://

www.mdclarity.com/rcm-metrics/bad-debtrecovery-rate (last visited May 22, 2024). According 

to a Healthcare Financial Management Association 

(HFMA) report, the industry expectation is health 

care providers will recover only 30 percent of 

amounts billed after discharge. Healthcare Fin. 

Mgmt. Ass’n, Address Patient Financial Risk in PreService to Boost Revenue and Earn Loyalty (July 12, 

2018), https://www.hfma.org/revenue-cycle/ 

financial-counseling/61208/. 

261 2021 is the latest year for which the cost report 

data are available. Hospitals classify medical bills 

as bad debt expenses when they determine that 

consumers are unlikely to repay. Non-Medicare bad 

debt consists of past-due medical bills from patients 

who are not Medicare beneficiaries. See Am. Hosp. 

Ass’n, Uncompensated Hospital Care Cost Fact 

Sheet (Feb. 2022), https://www.aha.org/fact-sheets/ 

2020-01-06-fact-sheet-uncompensated-hospitalcare-cost and Ctrs. for Medicare & Medicaid Servs., 

Hospital Provider Cost Report Data Dictionary (Dec. 

13, 2023), https://data.cms.gov/resources/hospitalprovider-cost-report-data-dictionary. 

expenditures.258 This means that there 

is less margin for consumers that do not 

pay their bills to have a significant 

impact on personal health care 

expenditures. 

Indeed, as at least one debt collector 

commenter stated, recovery rates for 

medical collections are already low on 

accounts with outstanding balances. In 

the proposal, the CFPB estimated that 

approximately 2.5 percent of medical 

collection accounts are recovered by 

debt collectors who furnish medical 

collections information to the NCRAs, 

based on the share of medical 

collections tradelines marked as paid on 

consumer reports before these tradelines 

were removed by the NCRAs in 2022.259

The CFPB requested comment or data 

submissions that could better 

approximate the share of medical debts 

placed with debt collectors that are 

ultimately recovered. Two commenters 

stated that historical recovery rates on 

bad medical debts were between 18.2 

and 24.8 percent but did not cite a 

source for this statistic.260 Multiple 

health care provider commenters stated 

that they expected bad debt liquidation 

to fall by 10.9 percent under the 

proposed rule. The commenters stated 

that this estimation was based on 

updated research from 2024 but did not 

provide a citation or supporting 

evidence. 

The CFPB notes that the relevant 

quantity for this analysis is not the 

recovery rate on medical debts overall, 

which includes debts that are paid after 

patient outreach by the medical 

provider and other collection methods 

that will still be available under the 

rule. Instead, the relevant quantity is the 

recovery rate for medical debts that are 

placed with a debt collector and 

furnished to a consumer reporting 

agency. While the CFPB does not have 

a precise estimate of this quantity, 

clearly this will be less than the 

recovery rate for bad debts overall, as 

some debts are furnished only after 

other collection methods have failed. 

However, the CFPB acknowledges that 

the 2.5 percent figure from the cited 

2022 research report seems low. From 

its market monitoring activities, the 

CFPB is aware that debt collectors have 

often engaged in a ‘‘pay for delete’’ 

practice, under which they offer to 

consumers to remove a debt collections 

tradeline in exchange for making 

payment. To the extent this occurred 

prior to the implementation of the 

voluntary NCRA removal of paid 

medical collections from consumer 

reports in 2022, there was a possibility 

that medical collections tradelines that 

were in fact paid would never be 

marked paid on consumers’ credit 

reports, leading to an undercount of 

medical collections tradelines that were 

ever paid. Using evidence provided in 

comments, the CFPB believes that 25 

percent is a conservative estimate of the 

baseline recovery rate for medical debts 

overall, while the baseline recovery rate 

for medical debts that are furnished to 

a consumer reporting agency is less than 

25 percent. 

Because recovery rates are low at 

baseline, even if all consumers with 

medical debt would not pay their 

medical debt in collections under the 

rule, health care providers’ overall costs 

would not be greatly increased. The 

CFPB’s analysis of hospital-level cost 

reports from the Healthcare Provider 

Cost Reporting Information System 

(HCRIS) provided by the Centers for 

Medicare and Medicaid Services (CMS) 

indicates that 72 percent of hospitals 

had non-Medicare bad debt expenses in 

2021.261 The CFPB’s analysis showed 

that these bad debt expenses on average 

represent about 6 percent of total costs 

in 2021 for hospitals that had nonMedicare bad debt. Assuming that 

health care providers achieve a 25 

percent recovery rate and bad debt 

expenses account for 6 percent of total 

costs at baseline, the CFPB estimates 

that bad debt expenses would rise to at 

most 8 percent of total costs on average. 

However, this is almost certainly an 

overestimate for the increase in bad debt 

costs to health care providers. Bad debt 

recovery rates almost certainly will not 

decrease to zero, since health care 

providers will continue to use other 

collection practices, such as patient 

outreach, phone calls and other 

communications by debt collectors, and 

debt collection litigation. 

A debt collector trade association 

submitted the results from a poll of 165 

health care providers who attended a 

webinar. The results showed that 8 

percent of the polled health care 

providers estimated a less than 6 

percent reduction in their revenue as a 

result of the proposed rule, 23 percent 

estimated a 6 to 10 percent reduction, 

36 percent of respondents expected a 10 

to 15 percent decrease in revenue, 17 

percent of respondents expected a 15 to 

20 percent decrease, and 16 percent of 

the respondents expected a loss in 

revenue greater than 20 percent. 

One health care provider stated that, 

if patients do not pay, it would 

experience an annual impact of $10 

million on its business and predicted 

that it would close within 6 months as 

its margins are extremely tight. At least 

one health care provider stated that 

reimbursement is already low because 

reimbursements from Medicare and 

commercial payers that follow the 

Medicare fee schedule have dropped 44 

percent over the past 10 years. One debt 

collector trade association commenter 

stated that the CFPB has not studied 

what the impact of the rule will be on 

Medicare co-pays and deductibles if 

consumers stop paying their medical 

bills. 

The CFPB notes that the above 

comments regarding health care 

provider revenue and bill payment rates 


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262Roughly half as many adults aged 65 and older 

had medical or dental debt relative to adults aged 

50 to 64, which may be due to the nearly universal 

Medicare coverage among adults aged 65 and older. 

Alex Cottrill et al., Kaiser Fam. Found., What are 

the consequences of health care debt among older 

adults? (July 26, 2024), https://www.kff.org/ 

medicare/issue-brief/what-are-the-consequences-ofhealth-care-debt-among-older-adults/. 

263W. Pete Welch et al., U.S. Dep’t of Health & 

Hum. Servs., Ownership of Hospitals: An Analysis 

of Newly-Released Federal Data & A Method for 

Assessing Common Owners (Aug. 2023), https://

aspe.hhs.gov/sites/default/files/documents/ 

582de65f285646af741e14f82b6df1f6/hospitalownership-data-brief.pdf. 

implicitly assume that consumers will 

stop paying medical bills or will no 

longer be required to pay these bills. As 

discussed above, this is not a reasonable 

assumption. Consistent with existing 

practice, many consumers will be 

charged at point of sale or have to pay 

an outstanding bill to continue to be a 

patient at a non-emergency health care 

provider. Consumers will continue to be 

legally responsible for their medical 

bills, and all other methods of collection 

that are available at baseline will remain 

available under the rule. Indeed, most 

consumers with medical debt do not 

have medical collections tradelines on 

their consumer reports as discussed 

above, and, even though medical debts 

do not appear on their consumer 

reports, those consumers are still 

responsible for their debts and often pay 

those debts if they have the financial 

means to do so. And the CFPB has no 

evidence to conclude that patients are 

regularly engaging in strategic nonpayment of medical bills—as opposed to 

non-payment due to financial distress or 

error. The CFPB calculated potential 

reductions in recoverable medical debt 

in this final rule based on the total 

amount of medical collections on 

consumer reports not because this is a 

likely or plausible outcome, but rather 

because this calculation places an upper 

bound on the potential costs to health 

care providers stemming from the rule. 

The CFPB acknowledges that there 

has been no study of the impact of the 

rule on Medicare co-pays and 

deductibles specifically. However, if 

anything, the CFPB expects that 

consumers with Medicare coverage will 

be less impacted by the rule because 

they are less likely to have medical debt 

than other populations.262

Multiple health care provider and 

debt collector commenters stated that 

hospitals have low operating margins, 

such that a small reduction in payments 

could force hospitals to only provide 

profitable services, or to close their 

doors. The CFPB understands that some 

hospitals and other health care 

providers may have low operating 

margins (nearly half of hospitals are 

nonprofits) 263 and recognizes that 

significant revenue reductions can 

theoretically result in the closure of 

some health care providers. As 

indicated above, the CFPB does not 

share commenters’ views on the 

magnitude of these revenue reductions, 

or that these revenue reductions would 

not be offset by other business 

adjustments. 

Multiple debt collector, health care 

provider, and consumer commenters 

cited the Report’s prediction of an 

estimated first year loss of $24 billion 

for health care providers that over time 

may range from $82 billion to $655 

billion in losses. A consumer advocate 

commenter stated that this $24 billion 

estimate was inflated. At least one 

health care provider commenter cited 

the Report’s finding that medical debt 

collection rates would fall by more than 

8 percent under the proposed rule. The 

CFPB found serious flaws in the 

Report’s research methodology, detailed 

in part VII.C, Data and Evidence, and 

expects the costs of the rule would be 

substantially lower. Using the evidence 

provided in the Report, the CFPB 

estimated a $900 million reduction in 

recoverable medical debt over 10 years 

under the rule, which would only 

partially be borne by health care 

providers because the loss would be 

shared with debt collectors and debt 

buyers. 

Although recent changes in the 

reporting of medical collections due to 

actions by the NCRAs and State laws are 

part of the baseline, these changes 

provide a benchmark to gauge the 

plausible effects of the rule. Some 

commenters provided information 

suggesting that the actions by the 

NCRAs to remove medical collections 

tradelines that are paid, less than one 

year past due, or less than $500 resulted 

in substantial reductions in debt 

collector recoveries. 

Commenters, including at least one 

health care provider and one debt 

collector, stated that most medical debts 

are ineligible to be furnished to the 

three NCRAs because their average 

balance is under $500. One debt 

collector commenter reported that the 

average balance of medical accounts 

referred to them for collection services 

by health care providers between 2021 

and 2023 was $414. To the extent that 

debt collectors are referred debts under 

$500 and rely on debt collection 

practices other than consumer reporting 

for those medical debts at baseline, the 

CFPB understands that the impact of the 

rule will be lower. Debt collectors that 

have updated their strategies for 

collecting medical debts under $500 

may have lower costs by applying those 

strategies to medical debts over $500 

under the rule. 

Multiple debt collector and health 

care provider commenters provided 

quantitative estimates for recent changes 

in recoverable medical debt 

experienced, which may have been 

impacted by the voluntary NCRA 

reporting changes. 

One debt collector commenter stated 

that their recovery rate had dropped 

from 17.1 percent in 2022 to 12.7 

percent by 2024. 

A health care provider commenter 

stated that their recoverable amounts 

had fallen by 7 percent since medical 

collections under $500 were removed 

from consumer reports, while a debt 

collector commenter stated they had 

experienced a 25 percent decline in 

recoverable amounts in the same time 

frame. 

One debt collector commenter stated 

that their business experienced a 7.37 

percent decline in revenue in 2023 

compared to 2022. The commenter 

experienced an additional 12 percent 

decline in revenue in the first two 

quarters of 2024. The commenter 

attributed this decline to the NCRA 

reporting changes. 

The SBA Office of Advocacy 

commented that one small debt 

collector entity reported a $369,637 

decline in dollars collected since the 

changes by the NCRAs in 2022 and 

2023. 

One debt collector commenter stated 

that, when the consumer reporting 

agencies banned the reporting of 

medical debts under $500, they 

observed a 13 to 22 percent decrease in 

the recovery of past due medical debts 

below $500. 

At least one debt collector commented 

that decreases in recovery rates in 

States, such as New York and Colorado, 

which banned all consumer reporting of 

medical debt around the same time as 

the changes by the NCRAs, were 

comparable to changes in States which 

only experienced the NCRA changes. 

This suggests that the rule will not 

reduce recovery rates above and beyond 

the reductions that have already 

occurred under the baseline. 

These comments did not state that 

reductions in recoverable amounts were 

specific to medical debts that were 

directly impacted by the NCRA 

reporting changes, and the trends 

described by commenters may reflect 

more general changes in medical debt 

collection that are unrelated to 

consumer reporting. 

As discussed above, the rule may 

impose reductions in revenue for 


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3326 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

264Fed. Trade Comm’n, The Structure and 

Practices of the Debt Buying Industry, at 22–23 (Jan. 

2013), https://www.ftc.gov/reports/structurepractices-debt-buying-industry. 

265Morgan A. Henderson & Morgane C. Mouslim, 

Facts About Hospital-Insurer Contracting, 30:2 AM. 

J. Managed Care (Feb. 12, 2024), https://

www.ajmc.com/view/facts-about-hospital-insurercontracting. 

266Am. Med. Ass’n, Payor Contracting 101 

(2021), https://www.ama-assn.org/system/files/ 

payor-contracting-toolkit.pdf. 

medical debt holders if the removal of 

medical collections from some 

consumer reports leads to lower 

recoverable medical debt amounts. This 

cost may be passed through to health 

care providers that sell medical debt to 

debt buyers, instead of placing the debts 

with a third-party debt collector to 

collect on the provider’s behalf. These 

debt buyers often also engage in debt 

collection and furnish medical 

collections information to consumer 

reporting agencies. Debt buyers 

purchase these bundles of medical debt 

from health care providers at a price 

that is a fraction of the nominal value 

of the medical bills.264 Because the rule 

may reduce the effectiveness of 

furnishing medical collections as a 

collection practice, the CFPB expects 

debt buyers’ demand for medical debt 

bundles sold by health care providers to 

potentially decrease. If so, the resulting 

decrease in the price of medical debt 

bundles would reduce the revenues of 

health care providers who sell past-due 

bills. However, the revenues of health 

care providers that at baseline do not 

allow debt buyers to furnish medical 

collections information on debts they 

sell would not be affected in this way. 

The CFPB requested data from health 

care providers to help quantify their 

potential reduction in revenues from the 

sale of medical debt bundles to debt 

buyers. One debt collector commenter 

stated that the rule would reduce the 

incentive for patients to resolve their 

debt, which would, in turn, negatively 

affect health care providers that rely on 

the ability to collect or sell their patient 

receivables, but no comments provided 

quantitative information on this point. 

The CFPB does not have data with 

which to quantify the magnitude of this 

expected decrease in the price of 

medical debt bundles on the secondary 

market, nor does it have information on 

the current prevalence of health care 

providers allowing debt buyers to 

furnish medical collections information 

to consumer reporting agencies. 

2. Changes in Insurance 

To the extent that health care provider 

revenue is impacted by the rule, 

contracts between health care providers 

and health insurers, as well as between 

consumers and health insurers, may be 

renegotiated to mitigate potential 

reductions in revenue and reflect 

changes in the incentives faced by these 

entities. In theory, consumers may be 

less likely to demand health insurance 

if they perceive medical debt to be less 

costly. In practice, the CFPB does not 

expect that the rule will significantly 

impact the demand for or health 

insurance because pharmaceutical drugs 

generally require point-of-sale payment, 

the majority of other direct-to-consumer 

health care costs are charged point-ofsale before obtaining service, and the 

other consequences of non-payment 

remain. 

Several debt collectors and 

individuals commented that health care 

providers may minimize the risk of 

patient nonpayment under the proposal 

by renegotiating contracts with insurers 

so that they receive a higher portion, or 

the entirety, of the cost of patient care 

directly from the insurer. Commenters 

including debt collectors, an individual, 

an attorney group representing health 

care providers, and a debt collector 

trade association, stated that increased 

costs for insurers under the proposal 

would be passed on to consumers 

through higher premiums, copays, and 

deductibles. Conversely, at least one 

health care provider stated that the 

proposal would induce insurers to pay 

a smaller portion of the cost of patient 

care to health care providers, because 

the cost to consumers of higher patient 

responsibilities would be lower. 

The CFPB understands that hospitals 

contract with many payors and contract 

provisions vary significantly across and 

within hospitals, with most contracts 

containing multiple contracting 

methodologies.265 For example, 

according to the American Medical 

Association, physicians face a large set 

of options when negotiating the terms 

and conditions of payments, and use 

several reimbursement methodologies 

and structures.266 Negotiation is costly 

for both health care providers and 

insurers, given the number and 

complexity of contracts. Additionally, 

as discussed above, the CFPB has 

determined that reductions in medical 

debt recovery rates and recoverable 

amounts would be limited under the 

rule. Accordingly, the CFPB expects that 

most health care providers and insurers 

will not choose to renegotiate their 

contracts under the rule, because the 

fundamental negotiating incentives (for 

providers to receive higher 

reimbursement and insurers to pay 

lower reimbursement), and relative 

negotiating power, would not change. 

Therefore, the extent to which costs will 

be passed through to consumers through 

higher premiums, copays, or 

deductibles will be limited. 

Commenters including a debt 

collector and a health care provider 

stated that the proposal would prevent 

health care providers from receiving 

insurance information from consumers, 

including coordination of benefits and 

accident claim forms, because the cost 

of communicating this information 

would outweigh the benefit of having 

insurers pay for medical bills. 

Under the rule, consumers will 

remain liable for medical debt, and the 

cost of coordinating benefits, for most 

consumers, would be lower than the 

cost of the potential debt. The CFPB 

expects health care providers to 

continue to receive insurance 

information from consumers. 

Commenters including debt 

collectors, health care providers, 

individuals, and a debt collector trade 

association stated that, under the 

proposed rule, consumers may be more 

likely to be uninsured or under-insured 

because there would be no incentive for 

patients to purchase insurance if they 

expect not to have to pay their medical 

bills. One debt collector trade 

association cited a webinar poll of 165 

health care providers reporting that 74.9 

percent of respondents thought that 

‘‘[t]here is a moderate or high chance 

th[e] proposed rule would impact a 

patient’s view of the need for 

insurance.’’ Some health care providers 

who submitted comments to the 

SBREFA Outline stated that the removal 

of medical debt from consumer reports 

would ‘‘eliminate’’ a consumer’s 

incentive to pay for a health insurance 

plan, especially for consumers that are 

young and in good health. The 

providers stated that, as a result, the 

cost of health insurance will increase for 

those that do want or need to be 

insured. Several commenters including 

debt collectors, health care providers, an 

individual, and a debt collector trade 

association stated that the proposal 

would lead to adverse selection in 

health care insurance markets, and that 

health care insurance markets would 

enter a ‘‘death spiral.’’ In contrast, at 

least one consumer advocate commenter 

highlighted that it is irrational for 

consumers to choose to get sued over a 

larger debt received without health 

insurance and that other debt collection 

methods would prevent reductions in 

the insurance rate. 

The CFPB understands that the 

predominant factor in whether a 

consumer is likely to have health 

insurance is whether they have access to 

affordable health care coverage, as 


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267 Jennifer Tolbert et al., Kaiser Fam. Found., Key 

Facts about the Uninsured Population (Dec. 18, 

2023), https://www.kff.org/uninsured/issue-brief/ 

key-facts-about-the-uninsured-population/. 

268According to an HFMA survey, 96 percent of 

health care industry respondents reported having 

pre-payment or point-of-service collection policies 

and procedures. Healthcare Fin. Mgmt. Ass’n, 

Analyzing pre-payment and point-of-service 

collections efforts (Aug. 15, 2021), https://

www.hfma.org/technology/analyzing-pre-paymentand-point-of-service-collections-efforts/. 

269Consumer Fin. Prot. Bureau, Medical Credit 

Cards and Financing Plans (May 2023), https://

files.consumerfinance.gov/f/documents/cfpb_

medical-credit-cards-and-financing-plans_2023- 

05.pdf. 

270Ctrs. for Medicare & Medicaid Servs., 

Emergency Room Rights, https://www.cms.gov/ 

priorities/your-patient-rights/emergency-roomrights (noting Emergency Medical Treatment and 

Active Labor Act, 42 U.S.C. 1395dd, protections) 

(last visited May 9, 2024). 

271See, e.g., Scott KW et al., Healthcare spending 

in U.S. emergency departments by health condition, 

2006–2016, PLoS One (Oct. 2021), https://

www.ncbi.nlm.nih.gov/pmc/articles/PMC8550368/. 

opposed to other factors. Uninsured 

consumers cite ‘‘coverage not 

affordable’’ and ‘‘not eligible for 

coverage’’ as the most common reasons 

for lacking health insurance.267

Furthermore, even absent consideration 

of the other debt enforcement 

mechanisms, consumers benefit from 

health insurance coverage when paying 

for pharmaceutical drugs or nonemergency health care services, where 

point-of-sale payment requirements are 

common. The rule will have no impact 

on the real or perceived value of health 

insurance for those health care costs. 

The CFPB expects that the rule would 

be unlikely to affect either access to 

health insurance or its affordability and 

has therefore determined that changes to 

the insured population will be minimal 

under the rule. Additionally, because 

there would be minimal changes to the 

insured population, the CFPB does not 

expect adverse selection or changes in 

premiums as a result of the rule. 

3. Operational Changes 

In theory, to the extent that health 

care providers face reductions in 

revenue due to the rule, they may 

implement operational changes to 

mitigate such potential reductions in 

revenue. Potential changes include 

altering how and when consumers pay 

for health care, refusing nonemergency 

care for consumers with outstanding 

balances, reducing the amount or type 

of services, or ceasing to provide 

services altogether. However, the CFPB 

does not expect the rule will generally 

impact health care provider revenue to 

an extent that would justify these 

operational changes, given the costs 

associated with implementing such 

changes. 

Multiple commenters including 

individuals, debt collectors, health care 

providers, researchers, health care trade 

associations, and debt collector trade 

associations stated that health care 

providers may be more likely to require 

upfront payments or other alternative 

payment schemes like membershipbased or concierge-based services. One 

debt collector trade association 

commenter provided results from a 

webinar poll of 165 health care 

providers, indicating that 72 percent of 

respondents would require full or 

partial upfront payments for nonemergencies if consumer reporting of 

medical debts was eliminated. Several 

commenters, including health care 

providers, debt collectors, and 

individuals, stated that even insured 

consumers would need to pay for health 

care upfront and out of pocket. The 

commenters stated that the onus of 

working with insurers to receive health 

care payments would be shifted from 

health care providers to consumers. 

Available evidence shows that most 

health care providers currently have 

policies and procedures for pre-service 

or point-of-service payment of most 

medical bills.268 Consequently, there 

would not be much margin for health 

care providers to begin requiring 

upfront payments under the final rule. 

Multiple health care providers, debt 

collectors, consumer advocates, 

individuals, and health care trade 

association commenters rejected this 

argument and stated that the presence of 

these policies does not mean that 

patients always pay before receiving 

health care. While it may be true that 

health care providers do not always 

require payment before providing health 

care, it is also true that many health care 

providers do require upfront payment or 

require recurring patients to eventually 

pay upfront before continuing to see the 

health care provider. And upfront 

payment for drugs is the universal 

market norm. In addition, the CFPB 

understands that health care providers 

lose revenue when they do not receive 

payment for services, but they also 

forego revenue if they do not provide 

health care to consumers who cannot 

pay upfront but who would have paid 

their medical bills after the service was 

provided, or whose insurance would 

have paid for the majority of the overall 

bill. It is unlikely that a small decrease 

in the recovery rates of furnished 

medical collections under the rule 

would cause health care providers to 

substantially change their operational 

and billing procedures in light of 

already existing incentives that 

determine payment policies. 

Health care providers, researchers, 

debt collectors, and debt collector trade 

associations commented that some 

consumers may increase their use of 

third-party credit products to meet 

increased upfront payment 

requirements. Some commenters 

described these third-party credit 

products as high-interest or predatory. 

Commenters including debt collectors, a 

health care provider, a credit union 

trade association, and an individual 

consumer stated that, as a result of the 

proposed rule, there would be reduced 

options for debt repayment because 

consumers that use third-party credit 

products to pay for medical care would 

not be offered low- or no-interest 

payment plans by their health care 

providers. 

The CFPB understands that many 

consumers, at baseline, use third-party 

credit products to pay their medical 

bills.269 The CFPB expects that most 

consumers that rely on third-party 

credit products to pay for health care 

would do so regardless of whether 

payments were required upfront. 

Affected consumers may incur thirdparty credit debt instead of medical 

debt, which may be more costly if they 

are charged interest on the third-party 

credit debt and would have been 

charged less (or no) interest if the debt 

was owed to a health care provider or 

debt collector. 

The CFPB expects that the rule would 

have a small or negligible impact on 

consumers’ ability to access emergency 

medical care, as all hospital emergency 

rooms that receive Medicare funds are 

required to provide emergency medical 

care, irrespective of an individual’s 

ability to pay.270 As an attorney group 

representing health care providers 

commented, emergency medical 

treatment for insured patients typically 

leads to copayments of less than $500, 

and uninsured patients typically qualify 

for charity care and have bills below 

$500 as well. Because medical 

collections under $500 are not included 

on consumer reports at baseline, the 

rule is unlikely to directly impact 

emergency health care. Additionally, 

because emergency services represent a 

significant share of health care 

spending, a significant portion of health 

care revenue would not be impacted by 

the rule.271

The CFPB received feedback from 

several health care providers during the 

SBREFA process stating that the 

proposed rule would lead them to deny 

non-emergency care to patients who 

cannot pay upfront or have not paid 

their previous balances in full. At least 


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3328 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

272Madeline Ashley, Los Angeles hospital on 

‘brink of closure’, Becker’s Healthcare Rev. (June 10, 

2024), https://www.beckershospitalreview.com/ 

finance/los-angeles-hospital-on-brink-ofclosure.html. Ana B. Ibarra, Hospital Closures, cuts 

in services loom for some communities. How the 

state may step in to help, Cal Matters (Apr. 6, 2023), 

https://calmatters.org/health/2023/04/hospitalclosures-california/. Ron Southwick, One in five 

California hospitals at risk of closing: Report, Chief 

Healthcare Executive (Apr. 13, 2023), https://

www.chiefhealthcareexecutive.com/view/one-infive-california-hospitals-face-risk-of-closing-report. 

Scott Wilson, A hospital’s abrupt closure means, for 

many, help is distant, The Wash. Post (Nov. 16, 

2023), https://www.washingtonpost.com/nation/ 

2023/11/16/california-health-care-hospital-closing/. 

one health care provider commented 

that the proposed rule may cause health 

care providers to delay providing health 

care until they can verify that patients 

can afford to pay. Health care providers 

commented that, as a result of the 

proposed rule, consumers that are 

denied health care because they cannot 

meet payment requirements will use 

hospital emergency room services for 

non-emergency health care, which will 

lead to longer wait times and 

overburdened emergency rooms. 

There could be a marginal increase in 

the number of health care providers 

who will not provide health care until 

the patient pays or who will stop 

providing services to the patient after a 

period of nonpayment, though, as 

discussed above, the forgone revenue 

from denying health care to patients 

whose insurance will pay the majority 

of the bill or who would have paid at 

a later date is likely the reason some 

health care providers have not already 

shifted to this model. Those incentives 

would remain. In the case where a 

health care provider stops providing 

health care until a patient pays, some 

patients may use hospital emergency 

rooms and others may choose to forego 

care. The CFPB does not expect that a 

significant number of patients will seek 

these services at emergency rooms. 

Debt collectors, health care providers, 

financial institutions, and research 

institutes commented that patients may 

delay seeking health care if they are 

unable to meet updated provider 

standards for pre-care payments. A debt 

collector further commented that if 

fewer people seek preventive care, more 

people will end up with long-term 

medical conditions. In contrast, a 

consumer advocacy organization and a 

State attorney general commented that 

the rule will allow patients to seek care 

without fearing harm to their consumer 

reports. 

On balance, the CFPB expects most 

patients will seek the health care they 

need regardless of their financial 

situation. 

Individuals, debt collectors, debt 

collection trade associations, health care 

providers, researchers, and health care 

trade associations stated that the 

proposed rule may cause health care 

providers to cut health care services, 

which would reduce health care access. 

At least one debt collector commented 

that even a 2 to 3 percent reduction in 

payments could cause health care 

providers to stop providing unprofitable 

services. At least one debt collector 

stated that the quality of health care 

may decline under the rule. Several 

commenters including individuals, 

health care providers, and debt 

collectors stated that health care 

providers may reduce their workforce to 

cut costs. 

It does not seem plausible in practice 

that health care providers will reduce 

the extent or quality of services they 

provide in response to the rule. 

Reductions in the type of health care 

provided, health care quality, or staffing 

levels would also reduce health care 

provider revenue, since fewer patients 

could be served, or patient demand for 

medical services may be reduced as a 

result of lower patient satisfaction. The 

CFPB expects that any reductions in 

health care provider revenue occurring 

under the rule would not justify limiting 

the types of provided health care 

services or providing lower quality of 

service. 

Several commenters including 

researchers, individuals, health care 

providers, debt collectors, health care 

trade associations, debt collection trade 

associations, and financial institutions 

stated that health care providers may 

raise prices under the proposed rule. At 

least one debt collector trade association 

commented that 15 percent of health 

care respondents to a webinar poll 

stated that they would start or increase 

the use of legal strategies for collecting 

payments, with the increased costs 

being passed through to consumers 

through higher prices for health care 

services. 

The CFPB does not expect that 

reductions in health care provider 

revenue or changes in collection 

strategies by health care providers under 

the rule would be significant enough to 

justify raising prices. As described in 

part VII.E.1, the CFPB expects that the 

reduction in health care provider 

revenue under the rule would be equal 

to no more than 2 percent of their total 

costs. Raising prices would require 

renegotiating contracts with insurers, as 

described in part VII.E.2, and the CFPB 

does not expect that limited reductions 

in revenue would justify the cost of 

these renegotiations. However, if some 

health care providers raise prices under 

the rule, higher prices would only 

partially be passed through to insured 

consumers, with the other portion 

passed on to health insurers. Higher 

prices would only partially be passed 

through to uninsured consumers as 

well, to the extent that these consumers 

receive financial assistance. For a more 

in depth discussion of changes in 

collection strategies, see part VII.E.4. 

Multiple debt collectors, health care 

providers, debt collection trade 

associations, and financial institutions 

commented that health care providers 

may close as a result of the rule. One 

health care provider stated that if 

consumers stopped paying their bills as 

a result of the rule, it would reduce their 

revenues by $10 million and they would 

close within six months. Several 

commenters stated that increased health 

care provider closures, especially in 

rural areas, will require patients to drive 

further to access health care. At least 

one debt collector stated that small 

health care providers, if they do not 

close, may be acquired by larger 

companies leading to reduced market 

competition. 

The CFPB agrees that, if patients 

stopped paying their medical bills, and 

health care providers could not 

compensate for reductions in revenue 

through renegotiating contracts with 

insurers, many health care providers 

may cease operating. However, as 

discussed above, the CFPB does not 

expect that patients will stop paying 

their medical bills under the rule. 

A debt collector stated that the NCRA 

reporting changes have caused health 

care providers to reduce staffing, reduce 

the types of services they provide, 

require upfront payment for services, 

consider using litigation to recoup debts 

from consumers, or close their doors 

completely. The commenter also stated 

that insurance companies have raised 

premiums while lowering the benefits 

covered. The commenter cited media 

articles about hospital closures in 

California as evidence of these changes. 

The evidence cited by the commenter 

does not support the commenter’s stated 

view that the NCRA reporting changes 

led to operational changes. The articles 

cited by the commenter do not mention 

the NCRA reporting changes or the 

importance of consumer reporting for 

debt collection. Instead, the articles 

describe low reimbursement rates for 

Medi-Cal patients, and high shares of 

some hospitals’ population base that 

receive care through Medi-Cal, among 

other concerns with rising costs of 

health care.272 The CFPB expects that 

these factors, and not the NCRA 

reporting changes, were more likely the 

drivers of the impacts the commenter 

describes. As such, the CFPB finds that 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3329 

273See, e.g., Consumer Fin. Prot. Bureau, Fair 

Debt Collection Practices Act Annual Report 2012 

(Mar. 13, 2012), https://www.consumerfinance.gov/ 

data-research/research-reports/fair-debt-collectionpractices-act/; Emily Alpert Reyes, Hospitals that 

pursue patients for unpaid bills will have to tell L.A. 

County, L.A. Times (Aug. 6, 2024), https://

www.latimes.com/california/story/2024-08-06/ 

hospitals-report-medical-debt; Judith Garber, Lown 

Inst., Which hospitals are suing patients? 

Investigation reveals hospital billing practices (Feb. 

17, 2023), https://lowninstitute.org/which-hospitalsare-suing-patients-investigation-reveals-hospitalbilling-practices/. 

274SBREFA Report at 38. 

275 Jack Pitsor, Medical Debt: How States are 

Supporting Consumers, Nat’l Conf. of State 

Legislatures (Jan. 26, 2022), https://www.ncsl.org/ 

state-legislatures-news/details/medical-debt-howstates-are-supporting-consumers. 

it is not likely that the final rule will 

lead to operational changes by health 

care providers, as the comments suggest. 

Regardless, California has already 

passed a bill prohibiting medical debt 

consumer reporting, so any impact on 

these health care providers will already 

be experienced absent this final rule. 

Several debt collectors commented 

that debt collectors may change their 

staffing and payroll in response to the 

rule. One debt collector stated that in 

the last 12 months it had to double its 

number of staff to handle the increase in 

litigation. The SBA Office of Advocacy 

described a small entity that reported a 

16 percent increase in payroll costs for 

the first quarter of the year after the 

NCRA reporting changes in 2023. In 

contrast, multiple commenters 

including debt collectors, individuals, 

and financial institutions stated that 

debt collection employees will be paid 

less or there will be staff reductions. 

The CFPB acknowledges that debt 

collectors may need to increase or 

decrease staffing under the rule but does 

not have information sufficient to 

quantify this impact. 

4. Use of Other Collection Mechanisms 

The potential for reductions in 

revenue due to the rule, as discussed 

above, may affect how health care 

providers or debt collectors use other 

collection mechanisms to collect unpaid 

medical debt, such as contacting 

consumers via mail and phone calls, as 

well as debt collection litigation.273

While these collection mechanisms are 

available at baseline, health care 

providers and debt collectors may 

increase their reliance on these 

mechanisms to induce payments for 

certain consumers after the rule is 

implemented. 

Contacting consumers via mail and 

phone calls is usually part of a 

comprehensive debt collection strategy. 

However, these collection mechanisms 

are time-consuming and labor intensive 

relative to furnishing, and may be less 

effective for inducing payment. 

Litigation is more costly than furnishing 

medical debt information to consumer 

reporting agencies for consumers, health 

care providers, and debt collectors. Debt 

collectors who were small entity 

representatives in the SBREFA process 

reported that the average cost of 

furnishing is $10 per account, compared 

to $500 for litigation.274 Because 

medical debt litigation can impose 

relatively large costs, the CFPB has 

considered if such litigation would 

become more common under the rule. 

Typically, when a medical bill is 

overdue, health care providers and debt 

collectors first contact consumers by 

mail or phone calls to seek payment. A 

debt collector trade association stated 

that, at baseline, entities that follow 

industry best practices will attempt 

several patient communications over a 

timeframe of 360 days, in line with the 

NCRAs’ practice of waiting for one year 

past the date of first delinquency to 

include medical collections on 

consumer reports, before furnishing an 

outstanding medical debt to consumer 

reporting agencies. A financial trade 

association and a debt collectors trade 

association stated that consumers, 

especially those that are unresponsive to 

mail and phone calls, sometimes first 

learn of a medical collection from their 

consumer report, such as when they are 

applying for credit. 

In deciding whether to incorporate 

debt collection litigation into their debt 

collection strategy, medical debt holders 

take into consideration the laws that 

apply in their jurisdiction. Several debt 

collector commenters noted that 

litigation is not allowed as a means of 

inducing payment of medical debt in 

some jurisdictions. For example, New 

Mexico prohibits debt collection 

lawsuits against consumers whose 

incomes fall below 200 percent of the 

Federal poverty line.275 These laws 

limit increases in debt collection 

litigation that may occur due to the rule. 

In addition to restrictions on the use 

of debt collection lawsuits, recent 

changes to industry practices and State 

laws governing the furnishing of 

medical debt information also limit 

further increases in litigation that may 

occur due to the rule. In particular, the 

CFPB does not expect the rule to impact 

litigation for medical debts under $500, 

because any increases in litigation for 

those debts would have already 

occurred due to the voluntary NCRA 

changes that removed medical debts 

under $500 from consumer reports in 

April 2023. A debt collector commenter 

stated that health care providers in 

California have increased their use of 

litigation following the $500 restriction. 

This may also imply that further 

increases in litigation may be limited for 

certain types of overdue medical bills, 

such as those stemming from emergency 

room visits. For example, an attorney 

group representing health care providers 

stated that emergency room visits 

typically result in medical bills under 

$500 after insurance or financial 

assistance is taken into account. 

Because the rule will not impact 

medical debts below $500, and because, 

where available, debt collection 

litigation is already an option at 

baseline, the CFPB expects that 

increases in litigation due to the rule 

will only occur for consumers with 

medical debts greater than $500. In 

addition, the CFPB does not expect the 

rule to cause increases in debt collection 

lawsuits in States that have already 

implemented the removal of medical 

collections from consumer reports. 

Similarly with the voluntary NCRA 

changes, the removal of medical 

collections from consumer reports will 

have already increased litigation risks 

for consumers in these States 

independently of this rule. 

The CFPB does not have data or 

information available to estimate the 

extent to which the rule may affect the 

use of litigation over medical debts, 

relative to the baseline. The CFPB 

requested comment on this issue, 

particularly data or quantitative 

estimates of the expected changes in 

litigation were the rule to go into effect. 

Commenters, including debt collectors, 

health care providers, debt collector 

trade associations, a bank trade 

association, a credit union trade 

association, individuals, a researcher, 

and the SBA Office of Advocacy, stated 

generally that consumers may face 

increased litigation if the rule makes 

furnishing a less effective means of 

inducing payment. In particular, 

according to a debt collector trade 

association, 38 percent of respondents 

to a webinar poll of 165 health care 

providers stated that they would start or 

increase the use of legal strategies for 

collection. 

However, these commenters did not 

provide quantitative estimates or data 

that can be used to estimate the 

expected changes in litigation. 

Historically, repayment rates for 

medical debt in collections have been 

quite low. As discussed in part VII.E.1, 

the CFPB believes that the recovery rate 

at baseline is less than 25 percent for 

medical debts that are furnished to a 

consumer reporting agency, which are 

the medical debts for which litigation 

might be more likely to be used under 


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3330 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

276As discussed in the Consumer willingness to 

pay medical bills part, two commenters stated that 

historically recovery rates on bad medical debts 

were between 18.2 and 24.8 percent. CFPB research 

suggests that only around 2.5 percent of medical 

collection accounts furnished to the NCRAs are ever 

reported as paid. See Consumer Fin. Prot. Bureau, 

Paid and Low-Balance Medical Collections on 

Consumer Credit Reports (July 27, 2022), https://

www.consumerfinance.gov/data-research/researchreports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/. 

277The Pew Charitable Trs., How Debt Collectors 

Are Transforming the Business of State Courts (May 

6, 2020), https://www.pewtrusts.org/en/researchand-analysis/reports/2020/05/how-debt-collectorsare-transforming-the-business-of-state-courts. 

Medical debt collection lawsuits tend to be filed in 

small claims courts and to involve amounts of less 

than $10,000. 

278 Id. 

279Bus. Wire, Equifax, Experian, and TransUnion 

Support U.S. Consumers with Changes to Medical 

Collection Debt Reporting (Mar. 18, 2022), https:// 

www.businesswire.com/news/home/ 

20220318005244/en/Equifax-Experian-andTransUnion-Support-U.S.-Consumers-WithChanges-to-Medical-Collection-Debt-Reporting. 

280See, e.g., Consumer Fin. Prot. Bureau, Fair 

Debt Collection Practices Act: CFPB Annual Report 

2023, at 2–5 (Nov. 2023), https://

files.consumerfinance.gov/f/documents/cfpb_fdcpaannual-report_2023-11.pdf (describing consumer 

medical collection complaints received by the 

CFPB). 

281Comment from Jennifer Whipple, Collection 

Bureau Servs., Inc., RE: Small Entity Representative 

Jennifer Whipple’s Comment to CFPB regarding the 

Small Business Review Panel regarding the Fair 

Credit Reporting Act Proposal, SBREFA Report app. 

A. 

282Fed. Trade Comm’n, The Structure and 

Practices of the Debt Buying Industry (Jan. 2013), 

https://www.ftc.gov/reports/structure-practicesdebt-buying-industry. 

283 John Ingold & Chris Vanderveen, Colorado’s 

largest hospital system is quietly suing thousands 

of patients every year over unpaid bills, The Denver 

Post (Feb. 21, 2024), https://www.denverpost.com/ 

2024/02/21/uchealth-medical-debt-lawsuitscolorado/. 

284See, e.g., Joseph Giuseppe R. Paturzo et al., 

Trends in Hospital Lawsuits Filed Against Patients 

for Unpaid Bills Following Published Research 

About This Activity, JAMA Network Open (Aug. 23, 

2021), https://jamanetwork.com/journals/ 

jamanetworkopen/article-abstract/2783297. 

285Noam M. Levey, Hundreds of Hospitals Sue 

Patients or Threaten Their Credit, a KHN 

Investigation Finds. Does Yours?, KFF Health News 

(Dec. 21, 2022), https://kffhealthnews.org/news/ 

article/medical-debt-hospitals-sue-patientsthreaten-credit-khn-investigation/. 

the rule. Moreover, litigation is a 

relatively expensive option for debt 

holders. As such, pursuing additional 

lawsuits because of the rule is not likely 

to result in a significant increase in 

marginal net recovery rates.276 For these 

reasons, the CFPB expects that any 

increase in overall litigation frequency 

would be limited. 

The CFPB expects that any increase in 

overall litigation frequency due to the 

rule would be limited to certain types of 

consumers who live in States that have 

not already removed medical collections 

from consumer reports. The CFPB 

understands that, while consumer 

reporting sometimes results in the 

payment of overdue debt, existing 

research suggests that debt collection 

litigation more often leads to a default 

judgment in favor of the plaintiff, 

making debt collection litigation a more 

effective, albeit more costly, means of 

inducing payment.277 These default 

judgments can lead to asset seizures or 

wage garnishment.278 Because litigation 

can be costly, debt collection lawsuits 

would be more likely to be filed against 

consumers who have the means to pay 

a civil judgment, whether by having 

their wages garnished or liens placed on 

their assets. Moreover, a debt collector 

commenter stated that adverse 

judgments from litigation, such as bank 

levies or wage garnishments, would 

have a greater detrimental effect on 

consumers than being denied a loan or 

paying a higher risk adjusted rate on a 

loan. 

The type of consumer that will most 

likely see an increase in litigation risk 

under the rule is a consumer who would 

have paid or settled a medical debt if a 

collection was added to their consumer 

report but would not respond to other 

debt collection mechanisms. In the 

baseline, medical collections are 

removed from the NCRAs’ consumer 

reports when paid.279 Generally, the 

CFPB understands that consumers 

seeking credit may be more likely to pay 

medical collections included on their 

consumer reports, assuming they have 

the means to do so, to ensure these 

collections are removed and 

unobservable to creditors and improve 

their credit scores. These consumers 

may be more sensitive to the threat of 

medical debts being furnished or the 

availability of medical debt information 

to creditors than they would be to the 

threat of litigation. However, the CFPB 

understands that, at baseline, furnishing 

may induce some consumers who have 

an immediate need for credit to pay 

debts they do not actually owe or debts 

based on incorrect bills, and the rule 

may reduce the likelihood that these 

consumers pay spurious debts.280

For the subset of consumers who 

legally owe the debt, the rule may lead 

to increased debt resolution costs if the 

consumers are required to pay for the 

plaintiff’s court filing fees or legal fees, 

which may occur for the majority of 

cases that end in a default judgement 

against the consumer. At least one debt 

collector who was a small entity 

representative in the SBREFA process 

suggested that the proposed rule would 

also lead to increased costs for 

consumers, if debt collectors are 

currently more likely to settle medical 

debts for less than the dollar amount 

owed when consumers respond to 

medical debt collections added to their 

consumer reports, but may not be 

willing to settle or will settle only for 

relatively higher amounts during the 

course of litigation.281

Should certain health care providers 

decide to increase their use of debt 

collection lawsuits, they may do so 

either by working with debt collectors to 

file debt collection lawsuits on their 

behalf, or by bringing the lawsuits 

themselves. Health care providers may 

sell medical debt to debt buyers who 

also engage in debt collection, thereby 

transferring ownership for the debt.282

In such cases, the decision of whether 

to pursue litigation is made by the debt 

buyer, and they become the main 

plaintiff in a debt collection lawsuit. 

However, some health care providers 

only assign medical debt to debt 

collectors while retaining ownership of 

the medical debt, and ultimately decide 

themselves whether to pursue debt 

collection litigation. When debt 

collection litigation happens this way, 

the debt collectors may be listed as 

plaintiffs even though it may be the 

health care providers that pay the bulk 

of the litigation costs. For example, debt 

collectors working with UC Health, the 

largest hospital system in Colorado, 

were reported to have filed 15,710 

lawsuits from 2019 through 2023.283 In 

this case, the medical debts were 

‘‘assigned’’ to debt collectors, but UC 

Health retained ownership of the 

medical debts and shared a portion of 

the recovered payments with the debt 

collectors. 

Health care providers that choose to 

file more debt collection lawsuits on 

their own behalf because of the rule may 

incur a mix of fixed costs and variable 

litigation costs.284 Fixed costs of 

litigation may include the costs of 

retaining and maintaining relationships 

with legal providers, as well as hiring 

additional staff. Health care providers 

that already take legal action against 

their patients might not need to incur 

these fixed costs. Using a random 10 

percent sample of hospitals in the 

United States, a recent investigation 

found that over two-thirds of hospitals 

already take legal action to collect 

unpaid medical bills, implying that 

many health care providers currently 

have some capacity to file debt 

collection lawsuits at baseline.285

Separate from fixed costs are variable 

costs that increase with the number and 

complexity of the debt collection 

lawsuits that hospitals choose to pursue. 

These are primarily court filing fees and 

attorney fees. Court filing fees vary 


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286See, e.g., the fee schedule for Small Claims 

Court in Maryland, https://www.mdcourts.gov/ 

legalhelp/smallclaims, the corresponding fee 

schedule for regular civil cases, https://

www.mdcourts.gov/courts/feeschedules, a 

comparison between small claims and regular civil 

cases in California, https://selfhelp.courts.ca.gov/ 

small-claims-or-limited-civil (all last visited May 

12, 2024). 

287Casey Tolan & Ed Lavandera, Arkansas 

hospital sued thousands of patients over medical 

bills during the pandemic, including hundreds of its 

own employees, CNN (Sept. 8, 2023), https://

www.cnn.com/2023/09/08/us/arkansas-hospitaldebt-collections-lawsuits-pandemic/index.html. 

288SBREFA Report at 38. 

289Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point 

(Mar. 2024), https://files.consumerfinance.gov/f/ 

documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

depending on the jurisdiction and the 

collection amounts, making it difficult 

to estimate costs that hospitals may 

face.286 Health care provider 

commenters stated that court filing fees 

can be as high as $270 while serving 

fees can be as high as $200. Attorneys 

can be paid on an hourly basis or on a 

contingency fee basis. However, if 

health care providers already employ inhouse attorneys or retain attorneys using 

a flat fee, this may reduce the need to 

pay additional attorney fees to pursue 

debt collection litigation. In addition, 

some jurisdictions allow health care 

providers to add filing fees, attorney 

fees, and other litigation costs to the 

judgment amount, partially shifting 

some of the cost of pursuing debt 

collection lawsuits to consumers if 

health care providers secure a favorable 

judgment.287 Because health care 

providers already have the option to 

pursue debt collection lawsuits or have 

otherwise adapted their collection 

mechanisms in response to industry 

changes and State laws under the 

baseline, the total costs of increased 

debt collection litigation would depend 

on how many additional medical debt 

collection lawsuits arise because of the 

rule. The CFPB does not have data to 

estimate the additional number of debt 

collection lawsuits that health care 

providers may pursue after the rule is 

implemented. 

The CFPB requested information from 

health care providers on the costs and 

amounts involved in current debt 

collection litigation, as well as estimates 

or information that can be used to 

estimate the number of debt collection 

lawsuits that might result from the rule. 

Commenters, including debt collectors, 

health care providers, a debt collector 

trade association, individuals, a 

researcher, and the SBA Office of 

Advocacy stated that health care 

providers will face increased costs 

associated with litigation, because they 

anticipate that the rule will cause them 

to file more debt collection lawsuits 

against consumers. However, these 

commenters did not provide 

quantitative estimates or data that can 

be used to estimate the expected 

changes in health care providers’ 

litigation costs. As discussed above, the 

CFPB expects that any increase in 

overall litigation frequency and costs 

would be limited to States that have not 

removed medical collections from 

consumer reports, and to health care 

providers within those States whose 

consumers have medical debts greater 

than $500. 

Rather than collecting unpaid medical 

bills themselves, health care providers 

may choose to contract with debt 

collectors. Debt collectors may switch to 

other collection mechanisms if 

consumer reporting agencies stop 

including medical collections 

information on consumer reports 

provided for credit eligibility 

determinations. To the extent that debt 

collectors rely primarily on furnishing 

to induce payment at baseline, the rule 

may reduce their profits if the other 

collection practices are costlier or less 

effective than furnishing. 

Debt collectors may have to incur 

both fixed and variable costs to increase 

their use of collection mechanisms other 

than medical collections furnishing if 

the rule is finalized, including debt 

collection lawsuits. Fixed costs of 

litigation include the costs of hiring and 

maintaining relationships with 

attorneys. Debt collectors that already 

pursue debt collection lawsuits may not 

need to incur these fixed costs. Variable 

costs include court filing fees, which 

vary depending on the jurisdiction and 

the collection amounts, making it 

difficult to estimate the increase in costs 

that debt collectors may incur. Variable 

costs also include attorney fees, which 

can be paid on an hourly basis or on a 

contingency fee basis. If debt collectors 

already employ attorneys in house or 

under a flat-fee arrangement, this may 

reduce the need to pay additional 

attorney fees should they increasingly 

pursue debt collection lawsuits. 

However, as discussed above, it is 

possible that some debt collectors have 

at least partially incurred the fixed and 

variable costs of switching to collection 

practices that do not involve furnishing 

of medical debt given the recent 

voluntary NCRA changes and State 

laws. The CFPB requested further 

information on the collection activities 

of debt collectors to quantify these costs 

of debt collection litigation but did not 

receive relevant comments or data. 

Debt collectors may also respond to 

the rule by increasing their use of debt 

collection lawsuits. In choosing whether 

to pursue debt collection litigation, debt 

collectors likely compare the cost of 

litigation with the expected recovery 

amount in the event of a favorable 

judgment. Under the baseline, debt 

collectors also likely compare the 

expected cost effectiveness of litigation 

against furnishing, although they can 

choose to furnish and pursue litigation 

for the same debt. The CFPB does not 

have data to directly compare the 

relative efficacy of furnishing and 

litigation for inducing payment. 

However, the CFPB expects that perlawsuit litigation costs may be lower for 

larger debt collectors, or for larger 

health care providers if they sue 

patients directly, given the potential for 

economies of scale. Comments received 

from debt collector small entity 

representatives during the SBREFA 

process indicate that furnishing medical 

collections information to NCRAs costs 

approximately $10 per account, while 

debt collection litigation costs 

approximately $500 per account.288 Due 

to the cost difference, debt collectors 

likely incur furnishing costs on a much 

larger percentage of accounts than they 

incur litigation costs, and so this may 

represent either a net saving or net cost 

for debt collectors, depending on the 

specific firm’s furnishing practices and 

increase in litigation activity. The CFPB 

requested comment on this issue but did 

not receive relevant comments or data 

on this subject. 

In the proposed rule, the CFPB 

requested data to quantify the impacts 

on debt collectors. Commenters, 

including debt collectors and a law firm 

representing health care providers 

stated that they would need to increase 

their use of debt collection lawsuits. A 

debt collector stated that over the last 12 

months, which the CFPB understands to 

cover the period of time after the 

voluntary NCRA changes, it had 

increased the number of lawsuits it filed 

each month by over 400 percent and 

had to double the number of staff 

handling litigation. Because the medical 

debts removed from consumer reports 

due to the voluntary NCRA changes 

were under $500, the commenter 

claimed that the remaining medical 

debts on consumer reports that will be 

affected by the rule are larger. Recent 

CFPB research shows that the average 

balance of medical collections included 

on consumer reports is around 

$3,100.289 To the extent that consumers 

with larger medical debts have income 

or assets that can be used to repay in the 

event of a debt collection lawsuit 


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290See, e.g., Keith Ericson & Tal Gross, Limits on 

Medical Debt Lawsuits, The Abell Found. (Feb. 9, 

2021), https://abell.org/wp-content/uploads/2022/ 

02/Final20Medical20Debt20Report.pdf. 291SBREFA Report at 38. 

292See, e.g., Fannie Mae, Uniform Residential 

Loan Application (Form 1003), https://singlefamily.

fanniemae.com/delivering/uniform-mortgage-dataprogram/uniform-residential-loan-application (last 

visited Nov. 25, 2024). 

293U.S. Dep’t of Hous. & Urban Dev., Single 

Family Housing Policy Handbook 4000.1, https://

www.hud.gov/program_offices/housing/sfh/ 

handbook_4000-1 (last visited Nov. 21, 2024). 

against them, the CFPB expects that 

debt collectors will be more likely to 

litigate over larger medical debts.290 As 

discussed above, the CFPB does not 

have data or information available to 

quantify this increase, and commenters 

did not provide such information. 

Relative to furnishing medical 

collections information, contacting 

consumers through traditional methods 

of debt collection that include mail, 

phone, or other means such as text 

messages may be more time-consuming 

and expensive. In a comment letter 

responding to the proposed rule, the 

SBA Office of Advocacy stated that one 

small entity reported a 16 percent 

increase in payroll costs for first quarter 

of the year after the NCRA voluntary 

change that removed medical debts 

under $500 from consumer reports. 

Some debt collector small entity 

representatives stated during the 

SBREFA process that they expected to 

have to increase staffing by 10 percent 

as a result of the proposed rule. 

Increased staffing would impose 

additional labor costs. These small 

entity representatives also expect to 

incur fixed costs associated with 

‘‘rewriting policies and procedures, 

training employees, updating systems, 

and renegotiating contracts’’ with health 

care providers.291 The CFPB does not 

have further data to assess the relative 

prevalence, costs, and effectiveness of 

the various collection mechanisms that 

debt collectors use at baseline. 

5. Availability of Information on 

Consumer Reports Used in 

Underwriting 

Under the final rule, creditors 

generally would not be permitted to use 

consumer report information related to 

medical debt in their determinations of 

consumers’ eligibility for credit by 

utilizing the financial information 

exception at § 1022.30(d). This section 

below discusses possible impacts, 

including impact on creditors’ 

underwriting practices and revenues, 

consumers’ access to credit, debt 

collectors’ assessments of consumers’ 

ability to pay medical debts, and the 

revenue received by consumer reporting 

agencies for consumer reports. 

Creditors use information from 

consumer reports, usually obtained from 

the NCRAs, to reduce the risk of lending 

to consumers who may be unable to 

repay. Removing medical collections 

information from consumer reports 

provided to creditors for credit 

eligibility determinations would reduce 

the information they contain relative to 

the baseline. In theory, if creditors 

expect medical collections information 

to be on consumer reports, or if they 

view medical collections information as 

critical to their assessment of the 

riskiness of lending to consumers, their 

willingness to pay consumer reporting 

agencies for consumer reports that do 

not contain medical collections 

information may decrease. However, 

creditors would likely find the 

remaining information on consumer 

reports to still be valuable, mitigating 

the reduction in demand for consumer 

reports that may result from the rule. 

Furthermore, the market for consumer 

reports used to underwrite credit is 

highly concentrated amongst the 

NCRAs. Lenders will not be in a 

position to refuse to obtain a consumer 

report because they will still need the 

information contained in consumer 

reports to underwrite, and so there is no 

plausible mechanism by which a 

lender’s perceived reduction in 

consumer report quality would affect 

price. If there were such a mechanism, 

consumers may face lower loan 

origination costs because consumer 

report fees are often passed on at loan 

origination to the borrower. 

One NCRA SBREFA commenter 

stated that it considers medical 

collections as predictive of a consumer’s 

repayment willingness and ability and 

believes that the complete removal of 

medical collections from consumer 

reporting would ‘‘degrade the accuracy 

of consumer reporting.’’ As described 

above, some medical collections reflect 

inaccurate billing practices, and their 

inconsistent inclusion on consumer 

reports adds only a noisy signal of 

consumers’ ability to pay. The CFPB 

expects that removing medical 

collections from consumer reports used 

in credit eligibility determinations 

would instead improve the accuracy of 

consumer reporting. 

For purposes of complying with laws 

requiring an assessment of a consumer’s 

ability to repay a loan, the rule allows 

creditors to consider medical debt 

information that consumers provide in 

response to general requests for 

information on a consumer’s debt. The 

rule, however, does not allow creditors 

to obtain or use medical information 

from consumer reporting agencies for 

such purposes. The CFPB understands 

that creditors for many types of credit 

products do not generally ask explicitly 

for medical debt information on 

applications for credit at baseline, and 

instead rely on the medical collection 

information provided in consumer 

reports. Some forms of credit, like 

mortgages, more commonly require that 

an applicant report all debts on the 

credit application.292 The rule will not 

change any existing law or guidance 

regarding the information that creditors 

must request from applicants. 

Commenters, including a bank trade 

association, an NCRA, and a researcher 

stated that consumers may withhold 

medical debt information from creditors 

if more general requests on a credit 

application for a consumer’s debt 

information do not specify medical 

debt. These commenters further stated 

that creditors would have no 

mechanism for verifying whether 

disclosed liabilities were accurate. 

The CFPB does not agree with the 

commenters that the rule will generally 

prevent creditors from learning about 

the scope of consumers’ liabilities. 

Creditors largely rely on consumers to 

provide information about their medical 

debts at baseline because most medical 

debts are not included on consumer 

reports, as discussed below. To the 

extent that creditors do explicitly ask for 

medical debt information at baseline, 

this rule changes the process by which 

creditors obtain medical debt 

information from consumers. 

Specifically, creditors will no longer be 

able to explicitly ask for information 

about medical debt. Instead, consumers 

will need to provide this information in 

response to a more general request for 

debt information. 

To the extent that consumers are less 

likely to provide medical debt 

information in credit applications under 

the rule relative to the baseline, the 

CFPB does not expect this to impose 

major costs on creditors. For example, 

the Federal Housing Administration 

currently omits medical debt 

information from its calculations of 

debt-to-income ratios in mortgage 

underwriting.293 This suggests that, to 

the extent consumers cease to provide 

their own medical debt information 

after the rule is issued, mortgage 

underwriters will likely adjust 

eligibility criteria to account for this 

change without significantly increasing 

repayment risk to creditors, including 

by placing more weight on other 

borrower characteristics. Additionally, 

few creditors explicitly ask for medical 

debt information at baseline; for 

example, the Uniform Residential Loan 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3333 

294Fannie Mae, Uniform Residential Loan 

Application (Form 1003), https://singlefamily.

fanniemae.com/delivering/uniform-mortgage-dataprogram/uniform-residential-loan-application (last 

visited Nov. 25, 2024). 

295Assurance of Voluntary Compliance/ 

Assurance of Voluntary Discontinuance (May 20, 

2015), In re Equifax Info. Servs., https://www.ohio

attorneygeneral.gov/Files/Briefing-Room/NewsReleases/Consumer-Protection/2015-05-20-CRAsAVC.aspx. 

296PR Newswire, Equifax, Experian and 

TransUnion Remove Medical Collections Debt 

Under $500 From U.S. Credit Reports (Apr. 11, 

2023), https://www.prnewswire.com/news-releases/ 

equifax-experian-and-transunion-remove-medicalcollections-debt-under-500-from-us-credit-reports301793769.html. 

297Consumer Fin. Prot. Bureau, Paid and LowBalance Medical Collections on Consumer Credit 

Reports (July 27, 2022), https://

www.consumerfinance.gov/data-research/researchreports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/. 

298See Colo. Rev. Stat. section 5–18–109; N.Y. 

Pub. Health Law art. 49–A; 2024 Calif. SB 1061; 

2024 Conn. Act 24–6; 2024 Minn. Ch. 332C; 2024 

New Jersey A3681; 2024 Ill. Pub. Act 103–0648; 

2024 Va. Acts ch. 751. 

299U.S. Census Bureau, Wealth, Asset Ownership, 

& Debt of Households Detailed Tables: 2021 (2021), 

https://www.census.gov/data/tables/2021/demo/ 

wealth/wealth-asset-ownership.html; Lunna Lopes 

et al., Kaiser Fam. Found., Health Care Debt In The 

U.S.: The Broad Consequences Of Medical And 

Dental Bills (June 16, 2022), https://www.kff.org/ 

report-section/kff-health-care-debt-survey-mainfindings/. 

300Consumer Fin. Prot. Bureau, Paid and LowBalance Medical Collections on Consumer Credit 

Reports (July 27, 2022), https://

www.consumerfinance.gov/data-research/researchreports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/. 

301Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point 

(Mar. 2024), https://files.consumerfinance.gov/f/ 

documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

302See, e.g., Fed. Nat’l Mortg. Ass’n, Single 

Family Selling Guide, B3–2–03 (2021), https://

selling-guide.fanniemae.com/#Public.20Records.

2C.20Foreclosures.2C.20and.20Collection.

20Accounts (noting that ‘‘[c]ollection accounts 

reported as medical collections are not used in the 

DU [Desk Underwriter] risk assessment’’); Fed. 

Home Loan Mortg. Corp., The Single-Family Seller/ 

Servicer Guide, 5201.1 (2022), https://

guide.freddiemac.com/app/guide/section/5201.1. 

See also The White House, Fact Sheet: The Biden 

Administration Announces New Actions to Lessen 

the Burden of Medical Debt and Increase Consumer 

Protection (Apr. 11, 2022), https://

www.whitehouse.gov/briefing-room/statementsreleases/2022/04/11/fact-sheet-the-bidenadministration-announces-new-actions-to-lessenthe-burden-of-medical-debt-and-increaseconsumer-protection/ (announcing changes to 

certain Federal government underwriting 

standards); Ethan Dornhelm, The Impact of Medical 

Debt Collections on FICO Scores, FICO Blog (July 

13, 2015), https://www.fico.com/blogs/impactmedical-debt-collections-ficor-scores; VantageScore, 

What was the rationale for removing Medical Debt 

from VantageScore 4.0?, https://

www.vantagescore.com/faq/what-was-the-rationaleContinued 

Application, required for loans sold to 

Freddie Mac and Fannie Mae, does not 

specifically request medical debt 

information.294 The CFPB requested 

evidence for how the continued ability 

to observe medical debt on credit 

applications may impact creditors and 

consumers but did not receive relevant 

evidence. 

The medical collections included on 

consumer reports comprise only a 

subset of consumers’ medical debt for 

several reasons. First, not all medical 

debt, including past-due medical debt, 

is in collections at any given time, and 

not all medical debts that are in 

collections are included on consumer 

reports, for a variety of reasons. For one, 

a medical collection that appears on a 

consumer report from one NCRA may 

not appear on other consumer reports if 

the debt collector did not report to all 

three NCRAs. Additionally, the NCRAs 

entered into a settlement, called the 

National Consumer Assistance Plan 

(NCAP), with over thirty States’ 

attorneys general in 2015 that required 

them to remove from consumer reports 

all medical collections that were paid by 

insurance, as well as ensure that 

medical collections were not included 

on consumer reports until they were at 

least 180 days past due from the date of 

first delinquency.295 Since that 

agreement, the NCRAs have voluntarily 

removed many types of medical 

collections from consumer reports, 

including medical collections that were 

paid by any source, medical collections 

under $500, and medical collections 

that have not been outstanding for at 

least one year.296

In addition, the medical collections 

that currently appear on consumer 

reports are rarely reported for the full 

seven years that the FCRA permits. 

Previous CFPB research found that 

fewer than half of medical collections 

over $500 were reported for longer than 

one year, and just over 10 percent were 

reported for at least four years.297 Since 

the NCRAs’ voluntary medical debt 

reporting changes were fully 

implemented in April 2023, the 

persistence of medical collection 

reporting has been substantially 

reduced. The CFPB analyzed CCIP data 

and found that fewer than half of the 

medical collections reported in May 

2023 were reported in November 2023, 

and just 26 percent were reported in 

February 2024. 

Finally, several states have passed 

laws that significantly restrict or 

prohibit consumer reporting of medical 

debt information.298 Creditors that serve 

consumers for whom consumer reports 

will have medical collections removed 

pursuant to these State laws provide or 

will soon be providing credit without 

knowledge from consumer reports of 

their applicants’ outstanding medical 

debt for reasons unrelated to this final 

rule. 

Nationally representative surveys 

indicate that between 15 and 41 percent 

of adults had some form of outstanding 

medical debt between 2021 and 2022, 

depending on the definition of ‘‘medical 

debt’’ used.299 However, only 14 percent 

of consumers had a medical collection 

on their consumer report in 2022.300 By 

June 2023, after the NCRAs’ voluntary 

removal of all medical collections under 

$500 in April 2023, only 5 percent of 

people with a consumer report had a 

medical collection included on their 

consumer report.301 Because most 

consumers with medical debt do not 

have medical collections on their 

consumer report, creditors that do not 

request medical debt information on 

credit applications provide credit 

accounts to many consumers who have 

medical debt without any knowledge of 

that debt under the baseline. The CFPB 

understands that medical collections are 

not primarily reported to the NCRAs to 

assist creditors in assessing delinquency 

risk, but rather to induce repayment. 

The general prohibition of the use of 

consumer report information related to 

medical debt in creditors’ 

determinations of consumers’ eligibility 

for credit may affect the performance of 

creditors’ loan portfolios if the absence 

of this medical debt information reduces 

the accuracy of creditors’ assessments of 

delinquency risk. Indeed, the removal of 

information from the set of variables 

that can be used in underwriting models 

should not improve performance if 

models optimally assess risk at baseline. 

The variables included in underwriting 

models are generally selected because 

they are predictive of the risk of loss a 

creditor would experience from 

providing a new credit account to a 

given consumer. Creditors typically 

measure risk by predicting the 

probability that a new account will 

become at least 90 days past due (or 

‘‘seriously delinquent’’) within two 

years of origination. 

The evidence available to the CFPB 

indicates that the predictive 

performance of underwriting models 

would not be impaired by the removal 

of all medical collections information 

from consumer reports. Many creditors 

have voluntarily reduced or eliminated 

the use of medical collections from their 

underwriting standards, and indeed, 

credit scoring companies have either 

removed or differentiated medical 

collections in their models and found 

minimal or no negative effects on 

performance.302 Furthermore, an 


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for-removing-medical-debt-from-vantagescore-4-0/ 

(last visited May 9, 2024). 

303Tommy Lee, Senior Director, Analytics & 

Scores, Medical Collection Removals Have Little 

Impact on FICO Scores, FICO Blog (June 30, 2022), 

https://www.fico.com/blogs/medical-collectionremovals-have-little-impact-fico-scores. 

304Consumer Fin. Prot. Bureau, Borrower risk 

profiles, https://www.consumerfinance.gov/dataresearch/consumer-credit-trends/student-loans/ 

borrower-risk-profiles/ (last visited May 9, 2024). 

305Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point 

(Mar. 2024), https://files.consumerfinance.gov/f/ 

documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

306A thin credit file is a consumer report that 

contains fewer than five credit accounts. Jennifer 

White, Experian, What is a Thin Credit File? (May 

25, 2022), https://www.experian.com/blogs/askexperian/what-is-a-thin-credit-file-and-how-will-itimpact-your-life/. 

307Arthur L. Kellerman, The U.S. Spends More 

On Healthcare Than Other Wealthy Nations But 

Ranks Last In Outcomes, Forbes (Oct. 24, 2023), 

https://www.forbes.com/sites/arthurkellermann/ 

2023/10/24/the-us-spends-more-on-healthcarethan-other-wealthy-nations-but-ranks-last-inoutcomes. 

308Carlos Dobkin et al., The Economic 

Consequences of Hospital Admissions, 108:2 a.m. 

Econ. Rev. 308–52 (2018), https://doi.org/10.1257/ 

aer.20161038. 

309 Jin-Hyuk Kim & Liad Wagman, Screening 

Incentives and Privacy Protection in Financial 

Markets: A Theoretical and Empirical Analysis, 

46:1 RAND J. Econ. 1–22 (2015), https://

papers.ssrn.com/sol3/papers.cfm?abstract_

id=2317942. 310See id. at 23. 

311Liran Einav et al., The impact of credit scoring 

on consumer lending, 44:2 RAND J. Econ. 249–74 

(2013), https://web.stanford.edu/∼leinav/pubs/ 

RAND2013.pdf. 

industry analysis of the NCRAs’ June 

2022 voluntary medical debt reporting 

changes found that because 

the vast majority of the impacted 

consumers would likely have other 

derogatory information and FICO®

Scores that remain low, the ability of 

FICO® Scores to rank order risk on the 

total population prior to these medical 

debt collections being excluded is 

almost identical to what lenders would 

experience with these medical debt 

collections excluded.303

The NCRAs’ June 2022 medical debt 

reporting changes removed paid 

medical collections from consumer 

reports and required medical collections 

to be at least one year past the date of 

first delinquency before being included 

on consumer reports. Though these 

changes were more limited in scope 

than those in this rule, the CFPB expects 

that an ex-post analysis of the rule’s 

impacts would draw a similar 

conclusion as the industry analysis 

above, given the CFPB’s evidence in the 

Technical Appendix showing that there 

is sufficient information remaining on 

consumer reports to enable creditors to 

make credit eligibility determinations 

without the inclusion of medical 

collections information on those 

consumer reports. Consumers with 

medical collections on their consumer 

reports in June 2023, after the NCRA 

voluntary reporting changes were fully 

implemented, had an average credit 

score of 582, near the deep subprime 

cutoff; 304 additionally, more than 40 

percent had at least one nonmedical 

collection and nearly 19 percent had no 

other tradelines.305 The fact that a 

consumer has a thin credit file 306 and 

information about nonmedical 

collections will remain available to 

creditors under the rule, to the extent 

that creditors use these markers to 

assess delinquency risk. 

An important remaining question is 

whether consumers with medical debt 

and medical collections on their 

consumer reports are meaningfully more 

likely to become seriously delinquent 

than consumers with medical debt but 

no medical collections on their 

consumer reports, again holding all else 

equal. If this were true, the rule would 

reduce the accuracy of assessments of 

delinquency risk. 

Several commenters, including credit 

union trade associations, a bank trade 

association, a consumer reporting 

agency trade association, a debt 

collector trade association, a health care 

trade association, debt collectors, 

research institutions, researchers, a 

health care provider, members of 

Congress, and the SBA Office of 

Advocacy, expressed an expectation 

that the proposed rule would reduce the 

accuracy of assessments of delinquency 

risk. Conversely, multiple commenters, 

including consumer advocates and 

individuals, stated that medical debt is 

not a good predictor of delinquency 

risk. 

Multiple commenters, including 

credit union trade associations and at 

least one debt collector, stated that the 

proposed rule would increase the 

likelihood of consumer bankruptcy 

because, absent the use of medical 

collections information in credit 

eligibility determinations, creditors 

would approve consumers for 

unaffordable loans and consumers 

would become overleveraged. A debt 

collector trade association commenter 

cited research suggesting that medical 

debt is the largest driver of consumer 

bankruptcy and stated that creditors 

would be exposed to default risk if they 

could not infer a consumer’s bankruptcy 

risk through the use of medical debt 

information in underwriting.307

However, a researcher commenter 

discussed the academic literature on the 

subject of medical debt and bankruptcy, 

and stated that, based on the cited 

evidence, fewer than 5 percent of 

bankruptcies of nonelderly adults are 

caused by hospitalization.308

The CFPB expects that creditors will 

have sufficient information to accurately 

assess a consumer’s bankruptcy risk 

under the rule, as the evidence 

presented in the Technical Appendix 

shows that the rule would lead to an 

expansion of credit without added risk 

of delinquency. 

One researcher commenter cited an 

academic study that considered how 

privacy ordinances impacted the 

likelihood of foreclosure in one 

Metropolitan Statistical Area between 

2001 and 2006.309 Three counties 

within the MSA enacted an opt-in 

ordinance in 2003, in which financial 

institutions had to receive consumers’ 

permission to share their information, 

while two counties did not enact the 

opt-in ordinance. The study found that 

loan denial rates fell, and foreclosure 

rates in 2007–2008 rose in the counties 

that enacted an opt-in ordinance. The 

commenter stated that the proposed rule 

was akin to a privacy rule against 

medical debt information and that there 

would be increases in lending to 

unqualified borrowers under the 

proposed rule. 

The study cited by the commenter is 

not specific to medical debt and 

includes all information about a 

consumer that would be available at a 

financial institution, making the study 

substantially broader in scope than the 

rule. Furthermore, the study does not 

support the commenter’s claims, as the 

study explicitly states that the evidence 

in support of the relationship between 

the privacy ordinances and foreclosure 

rates is not causal.310 Instead, the CFPB 

provided causal evidence in the 

Technical Appendix showing that the 

availability of medical collection 

information in underwriting does not 

reduce the delinquency risk faced by 

creditors. Because delinquency risk is 

indicative of foreclosure risk, the CFPB 

concludes that there is minimal risk of 

increased foreclosure rates under the 

rule. 

One researcher commenter cited an 

academic study showing that an auto 

finance company increased its profits 

when it began using credit scores in its 

underwriting in 2001.311 The CFPB does 

not see a direct implication from the 

results of this study to the rule and 

agrees that credit scoring models can be 

valuable for creditors. However, no 

credit scoring model is entirely reliant 

on any one element of credit 


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312 VantageScore, What was the rationale for 

removing Medical Debt from VantageScore 4.0?, 

https://www.vantagescore.com/faq/what-was-therationale-for-removing-medical-debt-fromvantagescore-4-0/ (last visited May 9, 2024). 

313See 12 CFR part 1002. 

314U.S. Census Bureau, Wealth, Asset Ownership, 

& Debt of Households Detailed Tables: 2021 (2021), 

https://www.census.gov/data/tables/2021/demo/ 

wealth/wealth-asset-ownership.html. 

information, and at least one credit 

scoring company has voluntarily 

removed medical collections from its 

model with minimal changes in 

predictive performance.312

Numerous commenters, including 

debt collectors, credit union trade 

associations, health care providers, 

individuals, a financial trade 

association, a consumer reporting 

agency trade association, a debt 

collector trade association, a bank trade 

association, a consumer reporting 

agency, a consumer advocate, a health 

care trade association, a research 

institute, and a researcher stated that 

creditors would provide more credit to 

consumers with medical debt under the 

proposed rule. These commenters stated 

that this increased access to credit 

would harm creditors and consumers 

because many consumers with medical 

debt would not be able to afford the 

credit they were provided, causing them 

to default. Other commenters, including 

at least one research institute, health 

care provider, government official, an 

individual, as well as multiple 

researchers and consumer advocates, 

stated that consumers with medical debt 

would experience increased access to 

credit under the proposed rule without 

repercussions. 

In the Technical Appendix, the CFPB 

finds that medical collection reporting 

did not change the delinquency risk 

faced by creditors, as credit accounts 

provided to consumers with medical 

collections that were included on their 

consumer report were no more or less 

likely to become seriously delinquent 

than credit accounts provided to 

consumers with medical collections that 

were not included on their consumer 

report. The CFPB expects that creditors 

and consumers will benefit from 

increased access to credit under the 

rule, as described in more detail below. 

A debt collector trade association 

commented that the proposed rule 

would not increase access to mortgages 

for consumers with medical debt 

because creditors use several factors to 

make mortgage eligibility 

determinations and medical debt is 

unlikely to be the marginal, deciding 

factor. However, the CFPB uses 

evidence from the Technical Appendix 

to estimate that an additional 21,882 

mortgages would be originated annually 

under the rule. Though this would be a 

small percent increase in the number of 

mortgages originated annually, it 

suggests that medical debt is a deciding 

factor for some mortgage originations. 

Multiple debt collectors commented 

that consumers with credit profiles 

similar to those of consumers with 

medical debt would be less likely to 

receive credit or may receive worse 

terms under the proposed rule, as 

creditors would proxy for medical debt 

information with other available 

information. Two researchers 

commented that creditors would begin 

to engage in statistical discrimination, 

whereby they restrict access to credit or 

provide worse terms to protected classes 

that are more likely to have medical 

debt. 

The CFPB finds in the Technical 

Appendix that the use of medical 

collections information in credit 

eligibility determinations does not 

reduce the delinquency risk faced by 

creditors, relative to a baseline in which 

medical collection information is not 

used because the information has not 

yet been added to a consumer report. 

This implies that underwriting models 

are oversaturated with information at 

baseline, meaning that they use more 

information than is necessary to 

optimally predict default risk. 

Furthermore, because medical 

collections information does not 

improve the predictiveness of credit 

eligibility determinations, holding other 

inputs constant, creditors would not 

find value from proxying for medical 

collection information. This is 

especially true if creditors chose to 

proxy for medical collection 

information by membership in a 

protected class, which is illegal under 

the Equal Credit Opportunity Act and 

may therefore create the risk of costly 

litigation.313

A research institute commented that 

lenders may cease providing credit to 

low-income consumers because 2.9 

million of the 19.9 million households 

with medical debt in 2021 had 

household income below the poverty 

threshold. However, using the same data 

set as the commenter, the CFPB finds 

that an almost identical share of 

households below the poverty line as 

households above the poverty line have 

medical debt: 14.8 percent of 

households with incomes below the 

poverty line have medical debt, 

compared to 15.1 percent of households 

with incomes above the poverty line.314

As such, even if creditors desired to 

specifically exclude potential borrowers 

with medical debt, excluding lowincome consumers would not 

accomplish this purpose, and as such it 

is unlikely that this outcome would 

occur. 

Several commenters, including 

multiple credit union trade associations, 

debt collectors, individuals, financial 

trade associations, at least one bank 

trade association, at least one consumer 

reporting agency trade association, at 

least one health care provider trade 

association, and at least one health care 

provider, stated that consumers 

generally would experience reduced 

access to credit or receive worse terms 

under the proposed rule. These 

commenters stated that the proposed 

rule would impact access to credit for 

all consumers, not just those with 

medical debt, because creditors would 

experience higher default rates from 

providing too much credit to consumers 

with medical debt and would pass those 

costs on to all consumers by raising 

interest rates or reducing the number or 

dollar amounts of originated loans. 

During the SBREFA process, debt 

collectors expressed similar concern 

that creditors would be concerned about 

the possibility of providing credit to 

consumers who cannot pay their 

medical debt under the proposed rule, 

leading creditors to raise interest rates 

and fees to account for anticipated 

increased delinquency rates. 

The CFPB does not expect that 

creditors would experience any 

significant decline in their customers’ 

willingness or ability to repay, or in 

account performance under the rule. 

Instead, the evidence available to the 

CFPB and described in the Technical 

Appendix suggests that the rule will 

enable creditors to provide more credit 

accounts that have similar delinquency 

risk to credit accounts in their baseline 

lending portfolio. The data used in the 

Technical Appendix does not include 

the terms of credit accounts, so the 

CFPB cannot estimate how the terms 

provided to consumers may change 

under the rule, though it understands 

that any changes in terms would likely 

not be limited to consumers with 

medical debt. However, the CFPB 

expects that creditors, overall, would 

experience an increase in profitable loan 

volume under the rule, as market 

frictions have prevented creditors from 

fully reaching this more profitable 

equilibrium at baseline, as described 

above in part VII.A, Statement of Need. 

One researcher commenter stated that 

firms may become insolvent from 

mispricing risk under the proposed rule. 

However, many creditors currently 

approve applications for credit without 

full knowledge of consumer medical 


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3336 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

315See part XII, Technical Appendix. 

316The April 2023 NCRA reporting changes were 

too recent to be the focus of the analysis in the 

Technical Appendix, but the appendix provides 

heterogeneity results for whether all medical 

collections were at least $500 to provide the closest 

analog to the current lending environment. The 

CFPB relies on these results to estimate the impact 

of the rule. 

317The data used and empirical strategy of the 

CFPB’s analysis are described in the Technical 

Appendix. This section describes the estimation of 

the effect of medical collection reporting on the 

likelihood that a hard pull of a consumer report (an 

inquiry) made by a creditor in response to a 

consumer’s credit application led to an originated 

loan. Under the assumption that inquiries made just 

before and just after a medical collection is added 

to a consumer report have similar underlying 

delinquency risk and reflect similar consumer 

preferences for terms and other loan qualities, 

differences in inquiry success can be attributed to 

creditors’ use of medical collections information in 

their underwriting processes. These assumptions 

are justified in the Technical Appendix. 

318All credit accounts in the CFPB’s CCIP 

(excluding collections and non-loan information, 

such as child support tradelines) are included in 

one of the three categories of Column 1. Estimated 

coefficients in Column 2 are taken from Table 7 in 

the Technical Appendix. Column 3 includes the 

baseline inquiry success rate for inquiries made 

when medical collections are reported in the 

sample of the Technical Appendix. These baselines 

differ from those in the Technical Appendix 

because the CFPB reports baseline inquiry success 

rates for inquiries made when medical collections 

are unreported in the Technical Appendix, as it is 

standard to provide the average of the dependent 

variable to the left of the threshold in regression 

discontinuity analyses. Column 4 calculates the 

estimated percent change in the number of loans 

that would be originated under the rule by first 

dividing the estimated coefficient in Column 2 by 

the baseline average inquiry success rate in Column 

3. Column 4 is then multiplied by negative one 

because the coefficients in Column 2 were 

estimated for medical collections moving from 

being unreported to reported in the Technical 

Appendix, but the change here is estimated for 

medical collections moving from being reported to 

unreported. Column 5 includes the number of 

inquiries made by creditors for consumer reports 

with reported medical collections between May 

2023 and October 2023 in the CFPB’s CCIP, 

multiplied by 50 to create a national estimate from 

the CCIP’s 2 percent sample, annualized by 

multiplying by 2, and then multiplied by the 

baseline inquiry success rate for people with 

reported medical collections in Column 3 to 

estimate the annual number of credit accounts 

originated. Column 6 multiplies Column 4 by 

Column 5 to calculate the expected change in the 

number of originated credit accounts under the 

rule. 

debts because most medical debts are 

not included on many consumer 

reports, as discussed above. Comparing 

the performance of credit accounts that 

creditors made without medical 

collections information to the 

performance of accounts made with this 

information would provide the most 

direct evidence on how the rule may 

impact account performance, and 

therefore, creditors’ profits. Ideally, this 

analysis would be performed with data 

from consumer reports linked with the 

timing and presence of consumers’ 

outstanding and unreported medical 

debts. The CFPB does not have access 

to such linked data and is not aware of 

such data being available. 

The research described in the 

Technical Appendix provides the 

closest feasible analysis of the potential 

effect of the rulemaking against the 

baseline by considering if the visibility 

of medical collections that remain on 

consumer reports enables creditors to 

provide fewer credit accounts that result 

in serious delinquency. The CFPB uses 

de-identified consumer report data from 

the CFPB’s CCIP and leverages the 180- 

day waiting period for reporting medical 

collections implemented under 

NCAP.315 The CFPB’s research 

considers inquiries made by creditors to 

one of the NCRAs in response to an 

application for credit in the 180 days 

before a medical collection was added 

to a consumer report, using data after 

the NCAP 180-day waiting period was 

implemented in September 2017.316

Credit applications made during this 

180-day period were made by 

consumers who had outstanding, but 

unreported, medical collections. The 

CFPB’s research finds that the 

characteristics of inquiries made before 

and after a medical collection’s addition 

to a consumer report are similar; 

therefore, any difference in the 

likelihood that a credit application led 

to an opened line of credit, or in the 

performance of those opened lines of 

credit, is likely caused by whether or 

not the creditor observed the 

consumer’s medical collection. 

The CFPB uses a regression 

discontinuity design in the Technical 

Appendix to analyze how the presence 

of a medical collection on a consumer 

report when an inquiry is made affects 

the likelihood that the consumer opened 

a new account in connection with that 

inquiry. The CFPB’s data cannot 

identify the cause of an unsuccessful 

inquiry, which may include a credit 

denial, unfavorable terms, or a change 

in the consumer’s credit demand.317 For 

all credit account categories, the CFPB’s 

research finds lower inquiry success 

rates for inquiries made immediately 

after a medical collection is added to a 

consumer report, compared to inquiries 

made immediately before a medical 

collection is added. This implies that 

creditors use medical collections 

information to deny or worsen the terms 

of credit provided to applicants. Table 

1 uses coefficients estimated in the 

Technical Appendix (provided in 

Column 1 of Table 7) to estimate the 

annual number of additional credit 

accounts that would be originated if 

medical collections were removed from 

all consumer reports, all else equal. 

TABLE 1—ESTIMATED CHANGES IN THE NUMBER OF ORIGINATED LOANS UNDER THE RULE BY CREDIT ACCOUNT TYPE 318

(1) 

Account type 

(2) 

Estimated 

coefficient 

(3) 

Baseline 

inquiry 

success rate 

(%) 

(4) 

Expected 

percent 

change in 

originated 

accounts 

(5) 

Annual 

number of 

originated 

accounts 

(6) 

Expected 

change in 

annual 

originated 

accounts 

Credit card ........................................................................... ***¥0.047 26.0 18.1 2,014,427 364,611 

Mortgage .............................................................................. *¥0.026 17.2 15.1 144,915 21,882 

Other loans .......................................................................... *¥0.014 23.9 5.9 1,083,879 63,949 

Estimates marked with *** are statistically significantly different from zero at the one percent confidence level. Estimates marked with * are statistically different from zero at the 10 percent confidence level. 

For all credit account categories, the 

CFPB expects that more loans would be 

originated if all medical collections 

were removed from consumer reports 

provided to creditors under the rule. 

The estimates in Columns 5 and 6 are 

underestimates because not all 

originated loans can be connected to an 

inquiry in the CFPB’s CCIP, as the data 

only include inquiries made to one 

NCRA, and many non-mortgage 

creditors pull consumer reports from 

only one or two NCRAs. Additionally, 

these estimates assume that credit 

demand would not change under the 

rule. The CFPB’s research in the 

Technical Appendix finds that 

consumers are more likely to apply for 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3337 

319All credit accounts in the CFPB’s CCIP 

(excluding collections and non-loan information, 

such as child support tradelines) are included in 

one of the three categories of Column 1. Estimated 

coefficients in Column 2 are taken from Table 8 in 

the Technical Appendix. Column 3 includes the 

baseline two-year serious delinquency propensity 

for loans opened when medical collections were 

reported in the sample of the Technical Appendix, 

though the CFPB provides baseline inquiry success 

rates for inquiries made when medical collections 

are unreported in the Technical Appendix, as is 

standard in reporting regression discontinuity 

results. Column 4 is copied from Column 6 of Table 

1. Column 5 multiplies Column 3 by Column 4, 

describing the expected number of additional 

accounts that would be originated under the 

proposed rule and would be D90+ within two years 

at the baseline D90+ rate. Column 6 multiplies 

Column 4 by the difference between Column 3 and 

Column 2 (where Column 3 is reflected as a decimal 

instead of as a percent, e.g., 20.7 percent is equal 

to 0.207), describing the expected number of 

additional accounts that would be originated under 

the proposed rule and would be D90+ within two 

years at the D90+ rate for accounts originated when 

consumers have unreported medical collections. 

Columns 2 and 3 are differenced instead of added 

because the coefficients in Column 2 were 

estimated for medical collections moving from 

being unreported to being reported in the Technical 

Appendix, but the expected impact of the proposed 

rule is for medical collections moving from being 

reported to being unreported. 

credit in the weeks before a medical 

collection is added to their consumer 

report than in the weeks after. However, 

the characteristics of credit applications 

made before and after a medical 

collection is added (and their associated 

consumers) do not appear to have any 

statistically distinguishable differences 

between them. This finding suggests 

that any increase in credit demand 

under the rule will not lead to declines 

in credit application quality. 

The results in Table 1 provide 

evidence that creditors will provide 

more credit to consumers with medical 

collections under the rule. At baseline, 

the CFPB assumes that creditors only 

make loans to people with reported 

medical collections if those loans are 

profitable on average, holding consumer 

report characteristics constant. If the 

marginal loans that would be made 

under the rule have similar revenue 

potential to those made to consumers 

with reported medical collections at 

baseline, the increase in the number of 

loans made to people with medical 

collections would increase creditor 

profits. To estimate the revenue 

potential of originated accounts, the 

CFPB estimates the likelihood of serious 

delinquency within two years of a credit 

account’s origination date for accounts 

that are opened in connection with an 

inquiry made in the 180 days before or 

after a medical collection is included on 

a consumer report. If creditors’ use of 

medical collections information in their 

underwriting decisions reduces the 

delinquency risk of newly opened 

accounts, one would expect that credit 

provided to consumers with 

outstanding, but unreported, medical 

collections will have higher 

delinquency propensity than credit 

provided to consumers with outstanding 

and reported medical collections. 

The CFPB tests this hypothesis, and 

estimates ranges for the number of 

delinquent loans that would be issued if 

medical collections were not included 

on consumer reports, as when the rule 

is finalized, in Table 2. These ranges 

also incorporate the evidence from the 

Technical Appendix on how the 

number of newly originated loans 

would change, shown above in Table 1. 

The estimated coefficients from Column 

1 of Table 8 in the Technical Appendix 

are listed in Table 2 in Column 2. 

TABLE 2—ESTIMATED CHANGES IN THE NUMBER OF SERIOUSLY DELINQUENT LOANS UNDER THE RULE BY CREDIT

ACCOUNT TYPE 319

(1) 

Account type 

(2) 

Estimated 

coefficient 

(3) 

Baseline 

D90+ rate 

(%) 

(4) 

Expected 

change in 

annual 

originated 

accounts 

(5) 

Expected number of 

D90+ accounts 

within two years 

of origination at 

baseline D90+ rate 

(6) 

Expected number of 

annual D90+ accounts 

within two years 

of origination at 

estimated delinquency 

rate for unreported 

medical collections 

Credit card ............................................. 0.000 20.7 364,611 75,474 75,474 

Mortgage ................................................ 0.011 3.1 21,882 678 438 

Other loans ............................................ 0.012 17.1 63,949 10,935 10,168 

None of the estimated coefficients are statistically significantly different from zero. 

Table 2 shows that, for mortgages and 

other (not credit card and not mortgage) 

account types, accounts originated by 

consumers with reported medical 

collections have slightly higher 

delinquency propensity than accounts 

originated by consumers with 

unreported medical collections. This is 

not consistent with creditors using 

medical collections information to 

reduce the delinquency risk of 

originated accounts. The coefficients are 

not statistically distinguishable from 

zero, so the evidence is only suggestive, 

rather than conclusive, that the 

expansion of credit under the rule 

would yield a rate of serious 

delinquency that is lower than the rate 

of serious delinquency currently faced 

by creditors for accounts they provide to 

consumers with reported medical 

collections. The CFPB interprets its 

findings as evidence against any 

significant increase in the rate of serious 

delinquency as compared to the rate of 

serious delinquency for accounts 

provided to consumers with reported 

medical collections at baseline. The 

CFPB notes that this claim holds if all 

else is equal under the rule. 

If consumer demand for credit is 

affected by the rule, the credit 

applications that creditors receive may 

have different underlying delinquency 

risk. Some consumers may avoid 

applying for credit when a medical 

collection appears on their consumer 

report if they understand that this 

information lowers the likelihood that 

their credit application will be approved 

or provided with favorable terms. 

Removing medical collections from 

consumer reports used in credit 

eligibility determinations may lead 

these consumers to submit credit 

applications, which could lead to an 

increase or decrease in the delinquency 

risk of applicant pools. As discussed in 

the Technical Appendix, the CFPB finds 

that consumers are less likely to apply 

for credit after a medical collection is 

added to their consumer report; 

however, the underlying delinquency 

risk of the remaining credit applications 

is not statistically distinguishable from 

the delinquency risk of credit 

applications made before the medical 

collection is reported. 

To provide further evidence for how 

credit demand may respond to the rule, 

the CFPB used data from the CCIP to 

estimate if the NCRAs’ voluntary 

removal of medical collections under 

$500 in April 2023 was associated with 


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3338 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

320The CFPB compared the credit demand of 

‘‘treated’’ consumers, who had medical collections 

under $500 included on their consumer reports in 

the first quarter of 2023, to the credit demand of 

‘‘control’’ consumers, who had medical collections 

under $500 included on their consumer reports in 

the last quarter of 2022, but not in 2023. Neither 

group had any medical collections over $500 on 

their consumer reports in 2023. The treated group 

was directly affected by the April 2023 removal of 

medical collections under $500, but the control 

group was not, though both groups likely have 

similar underlying delinquency risk and credit 

demand. The CFPB estimated a linear regression of 

a binary monthly indicator describing if consumers 

had an inquiry on their consumer report in each of 

the six months between May and October 2023 on 

a binary indicator describing whether the consumer 

was in the treated or control group. The regression 

further included month fixed effects. The 

coefficient was statistically significant at the ten 

percent level. 

321Robert Adams et al., Bd. of Governors of the 

Fed. Rsrv. Sys., Credit Card Profitability (Sept. 9, 

2022), https://www.federalreserve.gov/econres/ 

notes/feds-notes/credit-card-profitability20220909.html. 

322Louis DeNicola, Experian, Improve Credit: 

How to Establish Credit if You’re Unscoreable (Feb. 

12, 2024), https://www.experian.com/blogs/askexperian/how-to-establish-credit-if-youreunscoreable/. 

323 Id. 

324A thin credit file is a consumer report that 

contains fewer than five credit accounts. Jennifer 

White, Experian, What is a Thin Credit File? (May 

25, 2022), https://www.experian.com/blogs/askexperian/what-is-a-thin-credit-file-and-how-will-itimpact-your-life/. 

increased credit demand.320 The CFPB 

found that consumers who had medical 

collections under $500 included on 

their consumer reports in the first 

quarter of 2023 were just 0.07 percent 

less likely to have an inquiry in the six 

months after medical collections under 

$500 were removed from their consumer 

reports. This suggests that credit 

demand is not responsive to the removal 

of medical collections from consumer 

reports, at least in the short run. In the 

long-run equilibrium, the CFPB expects 

that consumer demand for credit may 

increase without the use of medical 

collections information in underwriting, 

but the CFPB does not expect that either 

the underlying delinquency risk of 

consumers with medical collections that 

apply for credit, or creditors’ ability to 

predict those consumers’ delinquency 

risk, will change under the rule. 

Creditors may change their 

underwriting processes in response to 

the rule, which may impact the 

allocation of credit. The CFPB’s research 

in the Technical Appendix analyzed 

inquiries that were made when a subset 

of medical debt information was 

available to creditors on consumer 

reports. If creditors instead knew that 

they could not generally use any 

medical debt information in their 

underwriting processes, they may 

change their underwriting models to put 

more weight on other variables. The 

CFPB expects that these changes would 

improve model performance relative to 

the baseline, and as a result, 

delinquency rates may be lower under 

the rule. 

Although the CFPB does not estimate 

that there will be a significant number 

of additional seriously delinquent 

accounts as a result of the rule, the 

CFPB does not have data available that 

would enable it to calculate the 

monetary cost to creditors of potential 

additional delinquencies. The CFPB 

requested information on the dollar cost 

to creditors of an account that becomes 

seriously delinquent within two years of 

its origination. A researcher commenter 

stated that even if the probability of 

serious delinquency or default did not 

change under the rule, the Exposure at 

Default, or the dollar amount that the 

consumer is delinquent for, may be 

higher for credit card lenders under the 

rule. This would lead to a higher 

expected loss and reduced revenues. 

The CFPB agrees that the profitability 

of a loan is not solely defined by 

whether it becomes delinquent or not. 

However, the other factors that 

determine profitability do not 

unambiguously point toward lower 

revenue for creditors due to the rule, all 

else equal. For example, credit card 

borrowers who carry a balance monthto-month (often termed revolvers), are 

more profitable for credit card 

companies than other types of 

consumers.321 Therefore, higher credit 

limits for these consumers under the 

rule may lead to higher revenue. If this 

source of higher revenue does not 

balance higher costs of default, the 

CFPB expects that credit card lenders 

may reduce the credit limits they 

provide under the rule. The CFPB does 

not expect this outcome to be likely 

because credit card lenders already do 

not observe most medical debts, as most 

medical debts are not included on 

consumer reports and credit card 

lenders do not generally explicitly ask 

for medical debt information on credit 

applications. 

Increases in access to credit may 

revert over the long run if credit scoring 

companies change their models or 

creditors change their underwriting 

practices in response to the rule. Other 

information on consumer reports could 

receive different weights to compensate 

for the loss of medical collection 

information, which could attenuate 

these increases or even reduce access to 

credit for some consumers. However, 

the CFPB understands that credit 

scoring companies and creditors would 

only implement these changes if the 

benefit from doing so outweighed the 

costs of changing these models and 

procedures. The results in the Technical 

Appendix suggest that medical 

collections reporting does not enable 

creditors to make fewer delinquent 

loans, implying that creditors on 

average would not experience any 

decline in revenue from the absence of 

this information. Accordingly, the 

expected small (or zero) benefit of 

recalibrating credit scoring models and 

underwriting practices may lead to 

longer-term increases in access to credit 

for consumers with medical debt. 

Because commonly used commercial 

credit scoring models require a minimal 

number of credit tradelines to generate 

a score, some consumers may lose their 

credit scores if medical collections are 

removed from their consumer reports. 

For instance, FICO will only provide a 

credit score if the consumer has at least 

one credit account that is at least six 

months old and there has been activity 

on the credit account in the previous six 

months.322 Similarly, VantageScore 

requires at least one tradeline with any 

activity before providing a score.323 For 

consumers with few tradelines, the 

removal of medical collections could 

lead them to lose their credit score. 

Multiple commenters, including at 

least one debt collector, health care 

provider, and an individual, agreed with 

this point, stating that the proposed rule 

would cause more people to have thin 

credit files.324 One NCRA commenter 

estimated that over three million 

consumers would lose their credit score 

under the proposed rule, though the 

commenter did not list the scoring 

model or models that provided the basis 

for their estimation. 

To provide evidence for the scale of 

this effect, the CFPB analyzed CCIP data 

from the months immediately before 

and after the NCRAs’ voluntary removal 

of medical collections under $500 in 

April 2023. This internal analysis 

estimated that these reporting changes 

caused approximately 5,500 consumers 

to lose their credit score, representing 

0.03 percent of consumers who had all 

their medical collections removed 

because of the April 2023 reporting 

changes. The median credit score for 

these consumers before their medical 

collections were removed was 581. The 

CFPB estimated using consumer reports 

from January 2024 in CFPB’s CCIP as 

the baseline that fewer than 1,000 

consumers may lose their credit scores 

if all medical collections were to be 

removed from consumer reports. The 

median credit score for these consumers 

in January 2024 was 573. Though not 

having a credit score can reduce access 

to credit, so too does having a subprime 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3339 

325 Jim Akin, Experian, Credit Reports & Scores: 

Is No Credit Better than Bad Credit (Oct. 3, 2022), 

https://www.experian.com/blogs/ask-experian/isno-credit-better-than-bad-credit/. 

326Fredric Blavin et al., Urban Wire, Urban Inst., 

Medical Debt Was Erased from Credit Records for 

Most Consumers, Potentially Improving Many 

Americans’ Lives (Nov. 2, 2023), https://

www.urban.org/urban-wire/medical-debt-waserased-credit-records-most-consumers-potentiallyimproving-many. 

327Alyssa Brown & Eric Wilson, Consumer Fin. 

Prot. Bureau, Consumer Credit and the Removal of 

Medical Collections from Credit Reports (Apr. 

2023), https://files.consumerfinance.gov/f/ 

documents/cfpb_consumer-credit-removal-medicalcollections-from-credit-reports_2023-04.pdf. 

328Consumer Fin. Prot. Bureau, Data Spotlight: 

Early Impacts of Removing Low-balance medical 

collections (May 16, 2023), https://

www.consumerfinance.gov/data-research/researchreports/data-spotlight-early-impacts-of-removinglow-balance-medical-collections/. 

329Regression discontinuity is a widely used 

policy evaluation tool and is described in detail in 

the Technical Appendix. In this context, the 

‘‘control group’’ includes consumers whose largest 

medical debt is just over $500, compared to the 

‘‘treatment group’’ of consumers whose largest 

medical debt is just under $500. Under the 

assumptions adopted in this estimation strategy, 

assignment to the treatment or control group is as 

good as random, so the credit score difference can 

be attributed to the medical collection reporting 

change. 

330 VantageScore, What was the rationale for 

removing Medical Debt from VantageScore 4.0?, 

https://www.vantagescore.com/faq/what-was-therationale-for-removing-medical-debt-fromvantagescore-4-0/ (last visited May 9, 2024). 

331Raymond Kluender et al., The effects of 

medical debt relief: evidence from two randomized 

experiments, Nat’l Bureau of Econ. Rsch. Working 

Paper No. 32315 (Apr. 2024), https://www.nber.org/ 

system/files/working_papers/w32315/w32315.pdf. 

332 VantageScore, VantageScore Excluding 

Medical Debt from Credit Scores (Aug. 12, 2022), 

https://www.vantagescore.com/press_releases/ 

vantagescore-excluding-medical-debt-from-creditscores/. 

333Consumer Fin. Prot. Bureau, What is a credit 

score? (Aug. 28, 2023), https://

www.consumerfinance.gov/ask-cfpb/what-is-acredit-score-en-315/. 

credit score, and the generally low 

baseline credit scores of affected 

consumers indicate that any increase in 

the number of consumers without credit 

scores under the rule may not lead to an 

overall reduction in consumers’ access 

to credit. Indeed, as stated by one 

NCRA, generally ‘‘no credit is better 

than bad credit’’ for the purposes of 

accessing credit.325 Based on CFPB’s 

analysis of the CCIP data, the CFPB 

expects that any reduction in access to 

credit because of an increase in the 

population of consumers without credit 

scores would be very small. 

Despite these potential negative 

effects, the CFPB expects that 

consumers who at baseline have 

medical collections on their consumer 

reports would generally experience 

increased access to credit under the 

rule, in part caused by increases in their 

credit scores. Multiple commenters, 

including consumer advocates, at least 

one research institute, and at least one 

researcher, stated that the proposed rule 

would lead to higher credit scores for 

consumers, though a bank trade 

association stated that any expected 

gains are speculative without access to 

credit scoring models. The CFPB agrees 

that existing research cannot 

conclusively describe how credit scores 

will be impacted by the rule, but the 

research sheds light on potential 

changes. 

Consumers with medical collections 

on their consumer reports in August 

2022 had credit scores that were 30 

points higher in August 2023 than in 

August 2022, after the implementation 

of the voluntary removal of medical 

collections under $500 in April 2023; 

consumers without medical collections 

on their consumer reports in August 

2022 experienced a one-point decline in 

their average credit scores by August 

2023.326 This suggests that the removal 

of medical collections under $500 may 

have increased credit scores by at least 

30 points, on average, though there may 

be other differences between consumers 

with and without medical collections on 

their consumer reports in August 2022 

that explain part of the difference in 

their credit scores. 

Evidence from CFPB research suggests 

that consumers experience a 25-point 

increase in their credit score, on 

average, after their last medical 

collection is removed from their 

consumer report.327 However, the 

causes of the studied medical collection 

removals were unknown, and there may 

be unobservable factors that caused both 

the medical collection removal and 

increases in consumer credit scores, so 

these results cannot be interpreted 

causally. 

One researcher commenter identified 

several methodological limitations of 

the study that the commenter stated 

meant that the CFPB study did not 

capture the causal effect of removing 

medical collections on consumers’ 

credit scores. While the CFPB does not 

agree with many of the specific 

methodological critiques made by the 

commenter, the CFPB stated in the 

proposal and again above that it does 

not see this evidence as causal and 

agrees with the commenter on this 

broader point. 

Other CFPB research has leveraged 

the recent voluntary removal of medical 

collections tradelines below $500, 

finding that consumers for whom all 

medical collections were below $500 

prior to the changes saw their credit 

scores increase 20 points more than 

consumers who had some medical 

collections tradelines above $500.328

One researcher commenter stated that 

this conclusion could not be validated 

because there is no control group.329

The researcher commenter further stated 

that any increase in credit scores would 

lead to higher delinquency rates. With 

respect to the consequences of increases 

in credit scores for creditors, the CFPB 

does not agree that creditors will face 

higher delinquency rates as a result. 

When a credit scoring company 

removed medical collections from its 

model in 2023, the company reported 

that there was minimal change in 

predictive performance.330

For a sample of fewer than 3,000 

consumers who had their medical debts 

removed from their consumer reports 

after their debt was relieved by a 

nonprofit organization, Kluender et al. 

(2024) found that credit scores increased 

by an average of just three points; 

however, this sample may not be 

representative of all consumers with 

medical debts, as the reported 

collections were much older on average 

than most medical collections on 

consumer reports.331

VantageScore removed all medical 

collections from its credit scoring model 

in 2022 and reported that ‘‘millions of 

consumers may see an increase of up to 

20 points in their VantageScore credit 

scores.’’ 332 The CFPB expects that 

consumers may experience similar 

increases in their credit scores from 

other credit scoring companies if 

medical debt information is removed 

from consumer reports under the rule. 

Higher credit scores can lead to higher 

loan approval rates and more favorable 

terms.333 The CFPB requested 

information on the dollar value to 

consumers of higher credit scores but 

did not receive relevant comments. 

Several commenters, including debt 

collectors, individuals, and at least one 

health care provider, one researcher, 

and one debt collector trade association, 

commented that the proposed rule will 

make it more challenging for consumers 

to repair their credit scores. The 

commenters stated that ‘‘clearing’’ or 

‘‘resolving’’ medical debts from a 

consumer report signals that a consumer 

is a good credit risk. The CFPB 

understands that this concern is not 

accurate based on the way credit scores 

currently operate. In the past, it was 

possible for consumers to increase their 

credit scores by paying a collections 

item, as paid collections tradelines are 

typically treated as less negative than 

unpaid collections tradelines. However, 

currently there is no mechanism for 


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3340 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

334 Id. at 36. 

335See 15 U.S.C. 1681s–2(a)(9). 

336The CFPB does not have information on 

whether other consumer reporting agencies also 

rely on the Metro 2 format. For an overview of how 

NCRAs and Innovis, another CRA, receive and 

screen furnished data, see Consumer Fin. Prot. 

Bureau, Key Dimensions and Processes in the U.S. 

Credit Reporting System: A review of how the 

nation’s largest credit bureaus manage consumer 

data, at 19 (Dec. 2012), https://

files.consumerfinance.gov/f/201212_cfpb_creditreporting-white-paper.pdf. 

337 Id. at 16–19. 

338See, e.g., Colo. Rev. Stat. section 5–18–109; 

N.Y. Pub. Health Law art. 49–A; 2024 Conn. Act 

24–6; 2024 Va. Acts ch. 751. 

paid medical collections to appear as a 

positive indicator because the NCRAs 

voluntarily removed paid medical 

collections from consumer reports in 

June 2022. Even before this change, the 

removal of a medical collection 

tradeline would typically be better for 

consumers’ credit scores than a paid 

medical collections tradeline. 

Furthermore, it would typically be even 

better for the consumer to never have 

the medical collection appear on their 

consumer report in the first place, as 

under the rule. 

At baseline, debt collectors may use 

information from consumer reports to 

determine a consumer’s ability to pay 

the collection amount and to guide what 

collection practices will be most costeffective. Debt collector small entity 

representatives, in their submitted 

comments during the SBREFA process, 

stated that they found medical debt 

information on consumer reports to be 

relevant to estimating whether a 

consumer will repay a debt that is in 

collections.334 Under the rule, debt 

collectors will continue to be permitted 

to use medical debt information on 

consumer reports because debt 

collection is not considered a credit 

eligibility determination. The CFPB 

expects that, if medical debt information 

is a critical indicator of a consumer’s 

ability to repay a debt in collections, 

debt collectors will continue to furnish 

medical debt information to consumer 

reporting agencies. Furthermore, debt 

collectors and health care providers may 

continue to furnish medical collections 

to consumer reporting agencies because 

consumer reporting agencies would still 

be able to include medical collections 

information on the reports that they 

provide for other non-credit eligibility 

determination purposes such as 

employment or insurance, or to 

consumers seeking a copy of their own 

consumer reports. 

6. Compliance Costs 

Under the rule, consumer reporting 

agencies will need to ensure that 

medical information is removed from 

consumer reports that are provided to 

creditors for credit eligibility 

determinations, which will require 

significant changes to existing consumer 

reporting systems and databases. 

Compliance costs will be low because 

furnishers have an obligation to notify 

consumer reporting agencies of their 

status,335 thus making their removal 

from certain consumer reports a simple 

coding adjustment, which the consumer 

reporting agencies will already have to 

do to comply with several states’ laws. 

The rule also has the potential to reduce 

consumer reporting agencies’ costs by 

reducing the number of consumer 

disputes. Creditors may incur 

compliance costs to update their 

underwriting systems. Creditors may 

also need to train and staff attorneys to 

ensure they continue to meet their 

obligations to assess a consumer’s 

ability to repay under the Truth in 

Lending Act and Regulation Z. 

Commenters noted that consumer 

reporting agencies may incur one-time 

costs to develop practices to comply 

with the rule. At least one credit union 

commenter and consumer reporting 

agency trade group commenter stated 

that removing medical debt from 

consumer reports would require 

significant changes to existing consumer 

reporting systems and practices. One 

consumer reporting agency commenter 

wrote that implementing the NCAP 

required working with furnishers and 

took two years to complete. The 

commenter stated they would require at 

least the same amount of time to 

implement the changes needed to 

comply with the proposed rule. 

The CFPB agrees that some consumer 

reporting agencies may need to add new 

code to computer systems and databases 

such that no medical debt information 

is contained in consumer reports 

provided to creditors for credit 

eligibility determinations. However, 

some operational and compliance costs 

that may have otherwise been caused by 

the rule may have already been incurred 

to some degree to comply with certain 

State laws as well as the NCAP changes, 

and the consumer reporting agencies 

should be able to scale those coding 

changes nationwide. The CFPB 

requested data that could be used to 

quantify costs that may be incurred or 

have already been incurred by consumer 

reporting agencies but did not receive 

relevant quantitative information. 

A SBREFA commenter, not 

representing the NCRAs, posited that 

making the necessary changes would be 

a significant undertaking in terms of 

time and cost and that the NCRAs 

would have to reconfigure, test, and 

validate their current compliance 

programs. The CFPB agrees that 

compliance costs may be different for 

the three NCRAs (Equifax, Experian, 

and TransUnion) and Innovis compared 

to other consumer reporting agencies. 

The NCRAs and Innovis are known to 

provide a standardized reporting format 

to be used by furnishers, called Metro 2, 

and have organized their databases to 

process and screen data furnished in 

this format.336 The Metro 2 format that 

the NCRAs and Innovis currently 

provide to furnishers may help facilitate 

compliance because tradeline 

information submitted by furnishers is 

already required to include codes that 

specify when a debt is a medical 

debt.337

Additionally, the three NCRAs 

currently do not include medical 

collections under $500, medical 

collections that are less than one year 

past due, or paid medical collections on 

any consumer report provided to third 

parties. The NCRAs also remove 

medical collections as required by State 

laws.338 It is likely that the NCRAs 

already have systems in place to screen 

out any furnished medical collections 

that may violate these conditions. These 

systems may be specific to removing 

furnished medical collections from all 

consumer reports, rather than only from 

consumer reports provided to creditors 

for the purposes of a credit eligibility 

determination as required under the 

rule. It is possible that the NCRAs’ and 

Innovis’s screening process may have to 

be expanded such that they only 

selectively remove medical collections 

information from consumer reports as 

required by the rule, or they may choose 

to remove medical collections from all 

consumer reports. The CFPB does not 

have information that would allow it to 

predict how the NCRAs and Innovis 

would choose to comply with the rule. 

Consumer reporting agencies that 

have different screening processes and 

databases that do not rely on the Metro 

2 format may incur different compliance 

costs associated with their own systems, 

though, as noted above, some 

compliance costs may already have been 

incurred to comply with State laws, and 

efforts to comply with those state laws 

are likely replicable or scalable for a 

nationwide change. Consumer reporting 

agencies may incur costs to screen 

medical information provided by such 

furnishers, or for which there is no 

medical information furnisher within 

the meaning of FCRA section 623(a)(9), 

from consumer reports provided to 

creditors for credit eligibility 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3341 

339Key Dimensions and Processes in the U.S. 

Credit Reporting System: A review of how the 

nation’s largest credit bureaus manage consumer 

data, at 21 (Dec. 2012), https://

files.consumerfinance.gov/f/201212_cfpb_creditreporting-white-paper.pdf. 

340 15 U.S.C. 1681i(a)(1)(A). 

341Consumer Fin. Prot. Bureau, Paid and LowBalance Medical Collections on Consumer Credit 

Reports (July 27, 2022), https://

www.consumerfinance.gov/data-research/researchreports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/. 

determinations. The CFPB requested 

comment and information on this 

potential compliance cost, general 

operational and compliance costs, and 

other possible one-time costs for 

consumer reporting agencies, but it did 

not receive relevant information. 

The U.S. Chamber of Commerce and 

an individual commenter stated that 

determining which debts are ‘‘medical’’ 

could be complex and that any 

broadening to include debts owed to 

third-party lenders would result in 

debts not connected to the provision of 

health care being removed from 

consumer reports. The CFPB is not 

broadening the rule to include debts 

owed to third-party lenders, however, 

and there is no indication that consumer 

reporting agencies currently have 

difficulty determining which debts are 

‘‘medical.’’ 

The removal of medical collections 

information from consumer reports 

provided to creditors for the purpose of 

credit eligibility determinations may 

reduce consumer reporting agencies’ 

costs by reducing the number of 

accounts that consumer reporting 

agencies must screen or conduct 

accuracy checks for, and the number of 

consumer disputes that they may need 

to resolve. Consumer reporting agencies 

regularly process significant amounts of 

data. For example, the NCRAs receive 

information on over 1 billion tradelines 

each month and must accurately 

compile this information for each 

consumer.339 Under the FCRA, 

consumers have the right to dispute 

inaccuracies on their consumer reports, 

and consumer reporting agencies are 

obligated to investigate and resolve 

disputes if necessary.340 This dispute 

resolution process imposes costs on 

consumer reporting agencies. A CFPB 

analysis shows that 5.7 percent of 

reported medical collections tradelines 

have had a dispute flag, much higher 

than the rate of dispute flags for credit 

cards and student loans.341 One NCRA 

commenter reported that their data 

shows that while consumers dispute 

medical collections tradelines more 

often than other collections tradelines, 

they do so at a similar rate to consumers 

disputing other delinquent noncollections tradelines. 

To the extent that medical collections 

tradelines contribute to the number of 

disputes that consumer reporting 

agencies must address and, if possible, 

resolve, removing medical collections 

information from consumer reports may 

reduce consumer reporting agencies’ 

costs associated with addressing 

disputes and dispute resolution. 

However, the CFPB does not have data 

to estimate the cost reduction arising 

from dispute management that 

consumer reporting agencies may 

experience if medical debt information 

is prohibited from appearing on most 

consumer reports provided to creditors. 

The CFPB requested data to quantify 

these potential cost-reducing benefits 

but did not receive relevant information. 

One credit union commenter wrote 

that consumer reporting agencies may 

provide medical debt information in 

violation of the rule, which puts the 

recipient creditors at legal risk if they 

then rely on that information for credit 

eligibility determinations. The CFPB, 

however, has no reason to believe that 

consumer reporting agencies will fail to 

comply with their obligations under 

§ 1022.38 to exclude medical debt

information from consumer reports

furnished to creditors, and assuming

such compliance on the part of

consumer reporting agencies, there will

generally be no costs to creditors arising

from litigation concerning medical

information when they rely on

consumer reports from consumer

reporting agencies.

One credit union trade association 

commented that, for creditors that use 

information beyond consumer reports, 

there will be costs associated with 

excluding medical information. At least 

one credit union commenter and one 

credit union trade association 

commenter stated that financial 

institutions would incur significant 

costs to update their underwriting 

systems, consumer reporting systems, 

and practices, and that there is a risk of 

errors during the removal process which 

could lead to further complications and 

disputes. The SBA Office of Advocacy 

commented that it may be challenging 

for creditors to prove whether medical 

debt information was disclosed by 

consumers themselves, and making 

these determinations would require 

training and staffing attorneys. 

The CFPB agrees that creditors may 

incur compliance costs from the rule. 

Creditors will need to ensure that they 

are not unintentionally using medical 

information in making lending 

determinations in circumstances that 

fall outside the exceptions to the 

creditor prohibition. The CFPB has 

determined that costs related to 

ensuring that no medical information is 

unintentionally used in lending 

determinations should be minor to the 

extent that creditors currently only 

utilize medical debt information 

provided through consumer reports. In 

such cases, so long as the consumer 

reporting agency providing the 

consumer report has complied with the 

rule, no medical debt information 

would be conveyed to the creditor, 

unless the consumer reporting agency 

has reason to believe the creditor 

intends to use the medical debt 

information in a manner not prohibited 

by the creditor prohibition. Creditors 

who use consumer reports may have 

additional costs if they utilize consumer 

reports from which the consumer 

reporting agency has not excluded 

medical debt information in compliance 

with § 1022.38. In such cases creditors 

would need to employ systems and staff 

time to identify and exclude that 

information. But as explained above, the 

CFPB has no reason to believe that 

consumer reporting agencies will fail to 

comply with their obligations under 

§ 1022.38.

In addition, creditors that rely on

information outside of consumer reports 

will face compliance costs related to 

identifying medical information from 

other sources and excluding it from 

their underwriting (except as permitted 

by an exception to the creditor 

prohibition). The CFPB does not have 

data available to quantify the extent or 

dollar amount of any of these 

compliance costs, and requested 

comment on this issue but did not 

receive relevant data or estimates. 

Commenters including health care 

providers, a researcher, debt collectors, 

credit unions, the U.S. Chamber of 

Commerce, and the SBA Office of 

Advocacy commented that the proposed 

rule would create conflicting obligations 

for creditors under the Truth in Lending 

Act (TILA) and Regulation Z, 

particularly with respect to the abilityto-repay provisions. They stated that it 

would be more difficult to respond to 

ability-to-repay laws under the 

proposed rule. 

The rule, however, allows creditors to 

obtain and use medical information to 

comply with applicable requirements of 

local, State, or Federal laws, including 

ability-to-repay laws, and provides an 

example of how a creditor can consider 

consumers’ self-reported medical debt 

information to comply with such laws. 

The CFPB thus concludes that creditors 

can comply with both the rule and the 

requirements of ability-to-repay laws. 


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3342 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

342Consumer Fin. Prot. Bureau, Complaint 

Bulletin: Medical billing and collection issues 

described in consumer complaints (Apr. 2022), 

https://files.consumerfinance.gov/f/documents/ 

cfpb_complaint-bulletin-medical-billing_report_

2022-04.pdf. 

343 Karen Pollitz & Kaye Pestaina, Kaiser Fam. 

Found., Could Consumer Assistance be Helpful to 

People Facing Medical Debt? (July 14, 2022), 

https://www.kff.org/policy-watch/could-consumerassistance-be-helpful-to-people-facing-medicaldebt/. 

344Consumer Fin. Prot. Bureau, Medical Credit 

Cards and Financing Plans (May 2023), https://

files.consumerfinance.gov/f/documents/cfpb_

medical-credit-cards-and-financing-plans_2023- 

05.pdf. 

One credit union commented that, by 

complying with the proposed rule, they 

would be at risk of losing a member 

with medical debt who receives credit 

from the credit union that they would 

not have received otherwise and who 

feels that they were not adequately 

educated or protected. The CFPB does 

not expect that consumers with medical 

debt would be provided credit they 

cannot afford under the rule. 

One bank trade association expressed 

confusion about including certain types 

of medical payments in underwriting. 

They stated that transaction data 

includes payments to medical 

providers, and they were unclear if this 

information could be used by creditors 

for the purpose of credit eligibility 

determinations under the proposed rule. 

The CFPB has permitted the use of 

medical information that is included in 

the transaction information of an 

account by creditors for the purpose of 

credit eligibility determinations in the 

final rule. 

7. Inaccurate Billing 

The CFPB understands that many 

medical collections included on 

consumer reports reflect incorrect 

billing, including debts that were 

already paid by either the consumer or 

by their insurance company, or debts 

that are not owed by the consumer. 

Nearly half of consumers who made 

formal complaints to the CFPB about 

medical debt collection in 2021 reported 

that they did not owe the debt, and 

many consumers did not know that they 

had outstanding medical debt until they 

discovered a collections tradeline on 

their consumer report.342

Numerous commenters, including 

individuals, debt collectors, health care 

providers, and health care trade 

associations, disputed the prevalence of 

inaccurate medical billing as described 

in the proposed rule. These commenters 

stated that most patient accounts are 

billed accurately and that the CFPB’s 

complaint database, which was cited as 

evidence of inaccurate medical billing 

in the proposed rule, does not reflect 

health care provider perspectives. 

Multiple individuals, debt collectors, 

health care providers, NCRAs, and debt 

collection trade associations commented 

that most medical bills are accurate and 

that there is no evidence that bills are 

inaccurate. One debt collection trade 

association commented that disputes are 

generally the result of conflicts between 

health insurers and consumers, so the 

fault for inaccurate medical billing lies 

with health insurers rather than with 

debt collectors. An NCRA commented 

that medical collections are disputed 

less frequently than other collections, 

and when disputed, are verified at 

higher rates. 

One debt collector commented that 

consumer reporting agencies already 

have methods for consumers to dispute 

and pursue legal remedies for inaccurate 

data. A financial trade association noted 

that the proposed rule referenced a 

study in which, of the 43 percent of 

consumers that reported receiving a 

medical bill that they believed 

contained an error, 79 percent took 

actions to dispute the mistake with their 

insurer or health care provider.343

Seventy percent of those disputes led to 

a successful resolution, which the 

commenter interpreted as evidence that 

there are already measures in place 

within the health care system to address 

erroneous billing. 

At least one consumer advocate stated 

that, citing public statements from 

medical billing advocate groups, 60 to 

80 percent of hospital medical bills have 

errors, with multiple individuals, 

research centers, consumer advocates, 

and law firms stating that inaccuracies 

in medical billing data are pervasive. At 

least one consumer advocate cited 

survey results that found most 

consumers have received a medical bill 

they believe to have errors. 

The CFPB acknowledges that its 

complaint database is centered around 

consumers’ negative experiences with 

medical debt, and the database cannot 

provide an estimate of the share of 

medical collections that result from 

inaccurate billing. However, even 

though there are existing mechanisms 

for consumers to dispute inaccurate 

medical bills with health care providers, 

debt collectors, and consumer reporting 

agencies, consumers will benefit from 

not needing to dispute these debts 

under the rule in order to avoid 

inaccurate negative information on their 

credit reports. 

At baseline, consumers may pay debts 

they do not owe to remove them from 

their consumer report. The CFPB does 

not have information available to 

estimate how many medical debts are 

paid despite containing inaccurate 

information but expects that fewer of 

these erroneous debts will be paid 

under the final rule. The CFPB 

requested comment and submissions of 

data, or any other relevant information, 

that may be helpful in estimating this 

reduction in erroneous debts paid but 

did not receive data or evidence. 

At least one debt collector commented 

that consumer privacy would be harmed 

under the proposal because many 

entities would need to handle sensitive 

information. The commenter did not 

explain why this would be the case. In 

fact, the CFPB expects that fewer 

entities would need to handle sensitive 

information under the rule because 

medical information would no longer be 

provided to creditors on consumer 

reports. 

A researcher commenter stated that 

consumer privacy would be harmed by 

increased use of litigation under the 

rule, because litigation can lead to the 

formation of public records, unlike 

consumer reporting. The CFPB agrees 

that this is a potential cost of the rule 

but expects that the rule will not greatly 

increase the number of consumers that 

are subject to litigation. 

8. Alternatives Considered 

Government officials and consumer 

advocate commenters recommended 

extending the rule to include medical 

credit cards, medical financing plans, 

and medical information on generalpurpose credit cards. Under this 

alternative construction of the rule, 

consumer reporting agencies would not 

be permitted to provide this information 

to creditors, and creditors could not use 

this information in their credit 

eligibility determinations. One 

consumer advocate commented that, in 

addition, the CFPB should prohibit 

common features of medical payment 

products that can lead to consumer 

harm, including deferred interest, 

charging for services before they are 

rendered, and issuing payment products 

to consumers whose insurance would 

otherwise pay or who qualify for 

financial assistance. One government 

official suggested that this alternative 

may be preferable in part because card 

issuers’ merchant category code system 

includes categories that would be 

similar to those needed to label medical 

information as such, simplifying the 

process by which creditors would be 

required to identify medical 

information. 

The CFPB’s own research has shown 

that medical payment products can pose 

financial risk to consumers.344 The 

CFPB is working with the U.S. 


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345Lorelei Salas, Consumer Fin. Prot. Bureau, 

Ensuring consumers aren’t pushed into medical 

payment products (June 18, 2024), https://

www.consumerfinance.gov/about-us/blog/ensuringconsumers-arent-pushed-into-medical-paymentproducts/. 

Departments of Health and Human 

Services and Treasury to monitor the 

relationships between financial 

institutions and health care providers 

and gather relevant information.345 The 

CFPB has also considered the use of 

medical transaction information in 

credit eligibility determinations but 

understands that most creditors do not 

use granular transaction data. The CFPB 

has determined that there is not yet 

substantial evidence that the inclusion 

of medical payment products 

information on consumer reports, or its 

use in underwriting, leads to consumer 

harm and has chosen not to include this 

information in the rule. 

Government officials and consumer 

advocates recommended extending the 

rule to consumer reports used for 

employment and tenant screening, 

rather than limiting the prohibition to 

medical information provided on 

consumer reports for the purpose of 

credit eligibility determinations as 

proposed. 

The CFPB does not have insight into 

the use of medical information by 

employers or landlords, but it did study 

its use by creditors to deny access to 

credit through its CCIP, as discussed in 

part VII.E.5. This evidence motivates the 

rule’s focus on consumer reports 

provided to creditors for the purpose of 

credit eligibility determinations. The 

CFPB has determined that while these 

proposals might have additional 

benefits for consumers, they are beyond 

the scope of this rulemaking. 

Commenters including a debt 

collector trade association and multiple 

credit union trade associations stated 

that the CFPB should provide guidance 

to, or increase its enforcement of, 

relevant entities instead of issuing the 

final rule. The SBA Office of Advocacy 

commented that CFPB should consider 

using enforcement actions with respect 

to businesses that furnish inaccurate 

medical debt information instead of the 

proposed rule. A debt collector trade 

association commented that the CFPB 

should provide guidance to medical 

debt collectors covering the inclusion of 

financial assistance policies in debt 

collection communications under the 

safe harbor provisions of Regulation F. 

The commenter also stated that the 

CFPB should better enforce the FCRA 

consumer dispute provisions to ensure 

the accuracy of medical debt reporting 

and should work with the U.S. 

Department of Health and Human 

Services to provide information about 

financial assistance to consumers who 

may qualify. One credit union trade 

association commented that the CFPB 

should provide a safe harbor provision 

for credit unions that unintentionally 

possess medical debt information. A 

second credit union trade association 

commented that the CFPB should issue 

guidance to financial institutions to 

help them better understand the 

predictive value of medical debt or 

permit lenders to use medical debt as 

long as it is assigned a lower weight in 

credit eligibility determinations. 

The CFPB has determined that these 

proposed alternatives may be marginal 

improvements toward the intended 

goals of the rulemaking but would not 

fully realize the full scope of the rule’s 

benefits for consumers. As such, it has 

decided not to implement these 

suggestions. 

Multiple commenters suggested 

alternatives that are beyond the 

jurisdiction of the CFPB. A debt 

collector trade association commented 

that it would be preferable to target 

health plan cost-sharing and policies 

that impact consumers’ ability to pay 

large bills from any source, not just from 

health care. A debt collector commented 

that the CFPB should provide financial 

assistance programs, improve health 

insurance coverage, and simplify billing 

processes. A different debt collector 

stated that the CFPB should encourage 

health insurers to improve their health 

care coverage, so consumers incur less 

medical debt in the first place. A credit 

union trade association stated that the 

CFPB should require health care 

providers to require transparency in 

medical pricing and billing. 

These alternatives may achieve some 

of the goals of the rulemaking, but the 

CFPB does not have the regulatory 

authority to implement them. 

Commenters suggested that the CFPB 

conduct additional research before 

finalizing the proposed rule to evaluate 

whether the rule is necessary. A debt 

collector trade association commented 

that the CFPB could evaluate the benefit 

of the No Surprises Act after it has been 

fully implemented. A debt collector 

stated that the CFPB should not finalize 

the rule before it studies the impacts of 

the voluntary NCRA reporting changes, 

while another debt collector stated that 

the CFPB should first study how the 

marketplace responds to credit scoring 

models that reduce the weight that 

medical collection information receives. 

The CFPB shares the commenters’ 

interest in ensuring the rule is 

supported by research. The evidence in 

the Technical Appendix shows that the 

inclusion of medical information on 

consumer reports reduces consumer 

access to credit without lowering 

creditors’ delinquency risk. As such, the 

CFPB does not believe that additional 

research is needed. 

Two debt collectors commented that 

the CFPB should differentiate between 

consumers who can and cannot pay 

under the rule. One debt collector 

recommended making this 

differentiation by consumers that are 

insured versus uninsured, while the 

other recommended finding alternative 

measures to differentiate between 

consumers that are unwilling to pay 

versus those that are unable to pay. 

Information about consumers’ insured 

status or that specifically addresses 

consumers’ ability to pay is not 

commonly available on consumer 

reports. Including insurance 

information on consumer reports would 

impose substantial costs on consumer 

reporting agencies and on health 

insurers that would presumably be 

responsible for furnishing health 

insurance information, and it would 

exacerbate the privacy concerns that 

this rule aims to address. Including 

information on consumer ability to pay 

may pose even more challenges as many 

consumers’ incomes and financial 

responsibilities are not included on 

consumer reports, and numerous 

entities that do not commonly furnish to 

consumer reporting agencies, such as 

landlords and employers, would be 

required to begin doing so. This would 

also not resolve the privacy concerns 

that this rule aims to address. As such, 

the CFPB has decided not to 

differentiate between groups of 

consumers in the rule. 

A debt collector commented that the 

CFPB should allow for positive 

consumer reporting of medical debts, 

such that consumers that make 

payments on medical bills would have 

those payments reported as positive 

information demonstrating an ability to 

pay debts. 

The CFPB understands that, at 

baseline, most medical debts are 

furnished to consumer reporting 

agencies by debt collectors rather than 

by health care providers. If consumers 

are more likely to make on-time 

payments to health care providers 

before the debt is placed with a debt 

collector, this would impose costly 

furnishing requirements on health care 

providers. It would also impose 

furnishing costs on debt collectors that, 

at baseline, often only furnish medical 

debts a few times, as discussed above. 

The CFPB does not have any evidence 

that paid medical collection items are 

treated positively in any lending 

models, and reporting positive medical 


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346Consumer Fin. Prot. Bureau, CFPB Takes Aim 

at Double Billing and Inflated Charges in Medical 

Debt Collection (Oct. 1, 2024), https://

www.consumerfinance.gov/about-us/newsroom/ 

cfpb-takes-aim-at-double-billing-and-inflatedcharges-in-medical-debt-collection/. 

347See, e.g., Matthew Liu et al., Consumer Fin. 

Prot. Bureau, Consumer Finances in Rural 

Appalachia (Sept. 2022), https://

www.consumerfinance.gov/data-research/researchreports/consumer-finances-in-rural-appalachia/. 348Molly Gamble, 703 hospitals at risk of closure, 

state by state, Becker’s Hosp. Rev. (Aug. 5, 2024), 

https://www.beckershospitalreview.com/finance/ 

703-hospitals-at-risk-of-closure-state-bystate.html?utm_medium=email&utm_

content=newsletter. 

payment information also would only 

add to the privacy concerns that this 

rule seeks to address. 

A commenter stated that the CFPB 

should allow medical debt to remain on 

consumer reports but require that it is 

given less weight than other debts. 

It would be impracticable for the 

CFPB to dictate a precise weight that 

creditors may or may not give to 

medical debts in their underwriting or 

how credit scoring companies weight 

their algorithms. In addition, it is 

unclear to what debts the medical debt 

weights should be compared. 

Furthermore, reducing the weight on 

medical debts would not resolve the 

privacy concerns that this rule aims to 

address. 

A commenter stated that the CFPB 

should prevent health care providers 

and debt collectors from reporting 

medical debts as long as the consumer 

makes minimum payments. 

The CFPB understands that, at 

baseline, most medical debt furnishers 

use consumer reporting as a mechanism 

to induce payment. Therefore, it is 

unlikely that consumers making 

minimum payments on their medical 

debt would have it furnished to a 

consumer reporting agency. This 

suggested alternative to the rule would 

not achieve the same benefit to 

consumers as would the rule. 

A debt collector commented that the 

CFPB should implement a waiting 

period before medical debt can be 

reported and remove paid medical debt 

from consumer reports instead of 

finalizing the proposed rule. 

The NCRAs have implemented these 

changes voluntarily, so limiting the rule 

to these changes would not benefit 

consumers relative to the current 

baseline. 

A credit union trade association 

commented that the CFPB should 

require medical debt furnishers to 

ensure the accuracy of the information 

they provide to consumer reporting 

agencies. 

The CFPB agrees with this comment 

and issued similar guidance to medical 

debt collectors in October 2024.346

F. Specific Impacts on Consumers in 

Rural Areas 

The costs and benefits to consumers 

of the rule will likely be the same, on 

average, for consumers regardless of 

where they reside. However, consumers 

who have outstanding medical debt may 

be more likely to be affected by the rule. 

Research by the CFPB and others shows 

that medical collections on consumer 

reports are more common for consumers 

who reside in rural areas, compared to 

those who reside in non-rural areas.347

Therefore, in the aggregate, the rule may 

have a disproportionate impact on 

consumers in rural areas. Additionally, 

to the extent that the rule will lead to 

consumers being denied services by a 

health care provider, that cost could be 

greater for consumers in rural areas, 

where there are often fewer options for 

medical care. 

Several commenters, including 

numerous debt collectors, multiple 

health care providers, at least one health 

care administration trade association, at 

least one debt collector trade 

association, and at least one individual, 

stated that the proposed rule may 

decrease access to health care in rural 

settings. At least one health care 

provider trade association commenter 

and at least one individual commenter 

stated that small rural health care 

providers are at a disadvantage at 

baseline and would face more 

challenges under the proposed rule. 

Commenters including multiple health 

care providers, at least one health care 

administration trade association, several 

debt collectors, at least one debt 

collector trade association, and at least 

one researcher, stated that the proposed 

rule may lead to increased closures 

among providers in rural areas and may 

result in patients needing to travel 

longer distances for treatment, or may 

force them to use emergency rooms for 

non-emergency care. At least one 

individual commenter, at least one debt 

collector trade association commenter, 

and at least one health care provider 

commenter cited that over 700 rural 

hospitals are already at risk of closure, 

and more than half of the 700 face an 

immediate risk of closure.348 More than 

one health care provider commenter 

stated that hospital closures in rural 

areas will lead to worse health outcomes 

or more deaths. At least one consumer 

advocate commenter stated that closures 

of health care facilities lead to longer 

travel distances for consumers in rural 

areas, and that for some consumers, 

longer travel times can increase unpaid 

time off from work and paying for 

childcare, in addition to the cost of 

health care received. 

The CFPB does not expect that the 

rule will result in increased closures of 

rural health care providers. The CFPB 

expects that rural health care providers 

would only close if their revenue 

decreases significantly. As discussed 

above, the rule is unlikely to 

substantially impact revenue for health 

care providers in the aggregate, as most 

health care revenue does not consist of 

consumers paying their bills after 

receiving treatment and the CFPB does 

not expect that there will be 

significantly reduced incentive to pay 

medical debts as a result of the rule. 

Additionally, the CFPB does not expect 

rural providers’ revenue to be 

differentially impacted by the rule. 

Therefore, the CFPB does not expect 

increased closures of rural health care 

providers and significant changes to 

access to health care in rural settings. 

G. Specific Impacts on Depository 

Institutions With $10 Billion or Less in 

Assets 

The CFPB does not expect that the 

rule will have significantly different 

impacts on depository institutions with 

$10 billion or less in assets, compared 

to larger institutions. The CFPB 

concludes that the costs to creditors, 

described above, would apply equally to 

these smaller institutions. 

Several commenters, including at 

least one credit union trade association 

and at least one bank trade association, 

highlighted that small institutions, 

including some credit unions, lack the 

same risk mitigation resources as larger 

institutions. These commenters stated 

that the proposed rule would have a 

disparate negative impact on smaller 

institutions in terms of risk mitigation. 

At least one credit union trade 

association commenter stated that the 

proposal would likely lead to a scenario 

where small lenders decide the risk is 

too great and leave the lending market. 

At least one bank trade association 

commenter predicted that community 

banks would need to reduce their 

lending the most, leading to competitive 

losses and operational and compliance 

costs under the proposed rule. The 

commenter did not provide evidence for 

why community banks would be 

disproportionately impacted by the 

proposed rule. 

The CFPB finds in the Technical 

Appendix that the use of medical 

collections information in underwriting 

does not reduce the delinquency risk of 

accounts originated to consumers with 

reported medical collections relative to 

consumers with unreported medical 

collections, and therefore expects that 


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349 5 U.S.C. 603, 609(b), (d)(2). 

350 5 U.S.C. 605(b). 

351 5 U.S.C. 603(a). 

352FCRA section 604(g)(2) (15 U.S.C. 1681b(g)(2)). 

353FCRA section 604(g)(5) (15 U.S.C. 1681b(g)(5)). 

354This background and the three-part test are 

discussed in part III.B. 

removing medical collection 

information from consumer reports will 

not reduce the ability of institutions to 

assess delinquency risk. The CFPB does 

not expect the impact to vary by the size 

of institution. Thus, the CFPB does not 

expect significantly different impacts on 

depository institutions with $10 billion 

or less in assets. 

H. Specific Impacts on Access to Credit 

The CFPB discusses impacts on 

access to credit in detail above. In brief, 

the CFPB expects that some consumers 

will lose their credit score, although it 

is unclear whether this will decrease 

these consumers’ access to credit 

relative to only having medical 

collections tradelines. Other consumers 

will likely see increased access to credit 

due in part to increased credit scores. 

VIII. Regulatory Flexibility Act 

Analysis 

The Regulatory Flexibility Act (RFA) 

generally requires the CFPB to conduct 

an initial regulatory flexibility analysis 

(IRFA) and a final regulatory flexibility 

analysis (FRFA) and convene a panel to 

consult with small entity 

representatives before proposing a rule 

subject to notice-and-comment 

requirements,349 unless it certifies that 

the rule will not have a significant 

economic impact on a substantial 

number of small entities.350 The CFPB 

provided its analysis to ‘‘describe the 

impact of the rule on small entities’’ in 

the NPRM and requested public 

comment.351

In the NPRM, the CFPB Director 

certified that the proposed rule would 

not have a significant economic impact 

on a substantial number of small entities 

within the meaning of the RFA. Thus, 

neither an IRFA nor a Small Business 

Advisory Review Panel (SBREFA Panel) 

was required. Nonetheless, the CFPB 

decided in an abundance of caution to 

include the proposed rule in the 

SBREFA Panel convened to address a 

number of topics under the FCRA on 

October 18 and 19, 2023, and to provide 

an analysis consistent with the 

requirements of an IRFA. In response to 

the NPRM, the CFPB received 

comments relevant to the IRFA, which 

are reflected in the FRFA set forth in 

part VIII.B. 

The Small Business Review Panel for 

this rule is discussed in part VIII.A. 

Among other things, the FRFA contains 

a statement of the significant issues 

raised by the public comments in 

response to the IRFA, a statement of the 

assessment of the agency of such issues, 

a statement of any changes made in the 

proposed rule as a result of such 

comments, the response of the CFPB to 

comments filed by the Chief Counsel for 

Advocacy of the Small Business 

Administration in response to the 

proposed rule, and estimates of the 

number of small entities that may be 

subject to the rule and descriptions of 

the impact on those entities. The FRFA 

for this rule is set forth in part VIII.B. 

A. Small Business Review Panel 

Under section 609(b) of the RFA, as 

amended by SBREFA and the CFPA, the 

CFPB must seek, prior to publishing the 

IRFA, information from representatives 

of small entities that may potentially be 

affected by its proposed rule to assess 

the potential impacts of that rule on 

such small entities. The CFPB complied 

with this requirement when it included 

the proposed rule in the Small Business 

Review Panel convened on October 18 

and 19, 2023. 

B. Final Regulatory Flexibility Analysis 

1. Statement of the Need for, and 

Objectives of, the Rule 

The creditor prohibition in section 

604(g)(2) of the FCRA reflects Congress’s 

intention to protect the privacy of 

sensitive medical information.352 The 

creditor prohibition generally prevents 

creditors from considering medical 

information pertaining to a consumer in 

determining the consumer’s eligibility, 

or continued eligibility, for credit. As 

described in more detail in part IV.B, 

Congress allowed certain Agencies, and 

later the CFPB, to make exceptions to 

this prohibition, consistent with the 

congressional intent ‘‘to restrict the use 

of medical information for inappropriate 

purposes.’’ 353 In 2005, the Federal 

financial agencies and the National 

Credit Union Administration 

promulgated the financial information 

exception, restated in the CFPB’s 

regulations at § 1022.30(d), which 

allows a creditor to consider certain 

medical information, including medical 

debt information and information 

relating to expenses, assets, and 

collateral, pertaining to a consumer in 

crediting decisions, provided the 

conditions of a three-part test are 

met.354 The CFPB has determined that 

an exception for creditors to consider 

this type of medical information for 

credit eligibility determinations is not 

‘‘necessary and appropriate’’ to protect 

legitimate operational, transactional, 

risk, consumer, or other needs, nor is an 

exception consistent with the intent of 

the creditor prohibition to restrict the 

use of medical information for 

inappropriate purposes as required for 

an exception under FCRA section 

604(g)(5). The CFPB has also 

determined that an exception for 

creditors to consider medical 

information relating to a consumer’s 

expenses, assets, and collateral would 

not meet the requirements for an 

exception under FCRA section 604(g)(5). 

As a result, the CFPB is removing the 

financial information exception and 

limiting the circumstances under which 

consumer reporting agencies can 

include medical collections information 

in consumer reports provided to 

creditors. Further details may be found 

in parts I.B and IV. 

The primary objectives of this rule are 

to enhance consumer privacy with 

respect to sensitive medical information 

and enable creditors to make 

appropriate credit decisions based on 

accurate information, in line with the 

purposes of the FCRA. The CFPB is 

authorized under section 604(g)(5) of 

the FCRA to promulgate exceptions to 

the creditor prohibition ‘‘that are 

determined to be necessary and 

appropriate to protect legitimate 

operational, transactional, risk, 

consumer, and other needs . . . 

consistent with the intent of [the 

prohibition] to restrict the use of 

medical information for inappropriate 

purposes.’’ The CFPB also has authority 

under section 621(e) of the FCRA to 

issue regulations to carry out the 

purposes and objectives of, and to 

prevent evasions of or to facilitate 

compliance with, the FCRA. A 

discussion of the background leading to 

the rule may be found in part I, and a 

discussion of the legal authority 

relevant to this rule may be found in 

part III. 

2. Significant Issues Raised by Public 

Comments in Response to the IRFA, a 

Statement of the Assessment of the 

Agency of Such Issues, and a Statement 

of Any Changes Made in the Proposed 

Rule as a Result of Such Comments 

The CFPB received few comments 

that were explicitly in response to the 

IRFA of the proposed rule. Commenters, 

including small entity representatives in 

the SBREFA process and debt collectors, 

stated that the SBREFA process was 

rushed and that they did not have 

enough information to provide input on 

the proposed rule. Commenters also 

stated that some types of entities that 

would be affected by the proposed rule 

were not considered in the IRFA, such 

as nonbank lenders, health care 


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355Advocacy also commented that the cost of 

credit for small entities will increase because of the 

‘‘written instructions’’ provision. The ‘‘written 

instructions’’ provision would specify what is 

needed to establish a permissible purpose for an 

entity to obtain a consumer report pursuant to the 

written instructions of the consumer. While the 

‘‘written instructions’’ provision was included in 

the topics under the FCRA that were discussed 

during at the SBREFA Panel convened, it is not 

included in this rulemaking. 

356By considering impacts on small entities not 

directly regulated by the rule, the CFPB has gone 

beyond the statutory requirements for a FRFA. See 

5 U.S.C. 604(a)(4)–(5) (calling for analysis focused 

on ‘‘small entities to which the rule will apply’’ and 

‘‘small entities which will be subject to the 

requirement[s]’’ of the rule) (emphasis added); see 

also Mid-Tex Elec. Coop., Inc. v. FERC, 773 F.2d 

327, 342 (D.C. Cir. 1985) (‘‘Congress envisioned that 

the relevant ‘economic impact’ [under the 

Regulatory Flexibility Act] was the impact of 

compliance with the proposed rule on regulated 

small entities.’’). 

providers, and payors. A debt collector 

trade organization stated that initial 

compliance costs would be about 

$100,000 for each of its member debt 

collectors, most of which, according to 

the commenter, are small entities. 

Several commenters, including debt 

collectors and a debt collector trade 

association, stated that the CFPB should 

consider some exemptions or longer 

implementation timelines. 

In response to these comments, the 

CFPB respectfully disagrees that the 

SBREFA process was rushed or that 

participants needed more information— 

the proposal relevant to this rulemaking 

was straightforward, the CFPB gave 

participants an outline summary of the 

proposal one month in advance of 

hosting the panel and gave participants 

an opportunity to provide written 

feedback three weeks after the panel. 

Additionally, with respect to the IRFA, 

the CFPB has revised its estimate of the 

number of small entities that may be 

affected by the rule to include debt 

collectors and health care providers in 

addition to the consumer reporting 

agencies and creditors listed in the 

IRFA. In its discussion of projected 

reporting, recordkeeping and 

compliance costs, the CFPB includes 

estimates provided by commenters. The 

CFPB also includes a discussion of the 

alternatives proposed by commenters in 

its description of significant alternatives 

to the rule. 

3. Response of the Agency to Any 

Comments Filed by the Chief Counsel 

for Advocacy of the Small Business 

Administration in Response to the 

Proposed Rule, and a Detailed 

Statement of Any Change Made to the 

Proposed Rule in the Final Rule as a 

Result of the Comments 

The Chief Counsel for Advocacy of 

the Small Business Association 

(Advocacy) provided comments on 

several aspects of the proposal, which 

generally echoed comments received 

from both small and large industry 

entities. Advocacy stated that the rule 

will significantly impact small entities 

involved in debt collection and that the 

CFPB has underestimated the number of 

small entities that may be impacted. 

Advocacy stated that the CFPB did not 

provide sufficient information to meet 

the requirements of a certification of no 

significant economic impact on a 

substantial number of small entities, 

and that the IRFA did not contain 

economic information on the projected 

reporting, recordkeeping, and other 

compliance costs. Advocacy also 

commented that the rule will increase 

litigation, causing harm to small entities 

and consumers because litigation is 

costly. Advocacy stated that the rule 

will lead to conflicts with other laws, 

including TILA and Regulation Z, as 

well as applicable State laws. 

Furthermore, Advocacy stated that the 

rule is redundant in light of changes to 

industry practices and State laws. In 

their comment, Advocacy stated that the 

CFPB should issue clarifications on 

which laws are controlling so as to 

mitigate litigation risks for small 

entities, including creditors who have 

ability-to-repay requirements under 

TILA and Regulation Z, and debt 

collectors who operate in states with 

their own medical debt collection laws. 

Advocacy also stated, based on feedback 

from small entity representatives during 

the SBREFA Panel, that the cost of 

credit for small entities may be affected 

by the rule because removing medical 

collections from consumer reports may 

increase credit scores and cause 

creditors to increase their underwriting 

standards.355 Finally, Advocacy 

suggests that the CFPB provide guidance 

to small entities for complying with the 

rule, and develop a mechanism to 

ensure that small entities are not 

penalized for not including medical 

debt in their ability-to-repay 

determinations. 

In this FRFA, the CFPB has 

considered indirect impacts to small 

entities that are health care providers 

and debt collectors, in addition to the 

direct impacts to consumer reporting 

agencies and creditors considered in the 

IRFA.356 By examining all credit 

inquiries made between July 2023 and 

December 2023 contained in the CCIP, 

the CFPB determined that most small 

creditors receive few applications from 

consumers with medical collections that 

appear on their consumer reports. In 

order for the rule to create a significant 

reduction in revenue, consumers with 

medical collections would have to 

experience unreasonably high default 

rates. Thus, the CFPB has determined 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities directly 

impacted by the rule, specifically, 

consumer reporting agencies and 

creditors. The rule will not directly 

impact the behavior of medical debt 

holders such as health care providers 

and debt collectors since the rule will 

not affect their ability to furnish medical 

debt information to consumer reporting 

agencies. However, to the extent that 

furnishing becomes a less effective 

means of inducing payment, health care 

providers and debt collectors may incur 

costs associated with their use of other 

collection mechanisms as well as 

potential reductions in revenue. For 

these reasons, the CFPB acknowledges 

the possibility of indirect economic 

impacts on small entities that are health 

care providers or debt collectors. In 

some parts of the FRFA, the CFPB 

references the impact analysis part of 

this rule and presents quantitative 

estimates when available, including 

estimates provided by commenters in 

response to the proposed rule. In 

addition, the CFPB has revised its 

estimates of the number of small entities 

that are creditors that will be affected by 

the rule. 

With regard to the harm to consumers 

and small entities from litigation, the 

CFPB has considered the extent to 

which litigation might increase as a 

means of inducing payment of medical 

debt under the rule. As discussed in 

part VII.E.4, debt collection litigation is 

already a collection mechanism used at 

baseline, and the rule might increase 

debt collection litigation. Increased debt 

collection litigation may be most likely 

to occur in States that have not already 

passed laws prohibiting medical 

collections from appearing in consumer 

reports, and also for small entities 

collecting on medical debts that are over 

$500. 

In the proposed rule, the CFPB 

included an example in proposed 

§ 1022.30(e)(6) to direct creditors and 

card issuers that are creditors regarding 

how they may use medical information 

provided by the consumer in 

compliance with TILA and Regulation 

Z, as set forth in § 1022.30(e)(1)(ii), for 

purposes of compliance with the abilityto-repay rule under § 1026.43(c) for 

closed-end mortgages, the repayment 

ability rule under § 1026.34(a)(4) for 

open-end, high-cost mortgages, and the 

ability-to-pay rule under § 1026.51(a) for 

open-end (not home-secured) credit 

card accounts. With respect to 

Advocacy’s comment that the rule is 

redundant in light of changes to State 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3347 

357Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point, 

at 3 (Mar. 2024), https://files.consumerfinance.gov/ 

f/documents/cfpb_recent-changes-medicalcollections-on-consumer-credit-reports_2024- 

03.pdf. 

358 5 U.S.C. 601(6) 359See U.S. Small Bus. Admin., Table of size 

standards, https://www.sba.gov/document/supporttable-size-standards (last visited May 13, 2024). 

360NAICS 561450 also includes mercantile credit 

reporting bureaus. There may also be a small 

number of consumer reporting agencies classified 

under Investigation and Personal Background 

Check Services (NAICS 561611). 

361An overview of the types of consumer 

reporting agencies may be found at: Consumer Fin. 

Prot. Bureau, List of consumer reporting companies, 

https://www.consumerfinance.gov/consumer-tools/ 

credit-reports-and-scores/consumer-reportingcompanies/ (last visited Apr. 15, 2024). This list is 

not intended to be all-inclusive and does not cover 

every company in the industry. 

laws and industry practices, the CFPB’s 

expectation is that the rule will provide 

clarity and uniformity in the treatment 

of medical collections on consumer 

reports across the US. The rule will also 

complement the voluntary NCRA 

changes that removed medical 

collections from consumer reports 

under $500 as well as paid medical 

collections, which are industry practices 

that apply only to medical collections 

furnished to the NCRAs and can be 

reversed at any time. 

The CFPB acknowledges that it is 

possible that underwriting standards 

might tighten if the rule causes credit 

scores to increase for a substantial 

fraction of the population. However, the 

CFPB’s recent research shows that only 

5 percent of consumers still have 

medical debt on their consumer reports 

at baseline.357 The CFPB expects that 

any increase in credit scores may 

represent a more accurate reflection of 

credit risk, and that it is unlikely that 

creditors will raise underwriting 

standards sufficiently to cause a 

significant impact on the cost of credit 

for small entities. 

4. Description and, Where Feasible, 

Provision of an Estimate of the Number 

of Small Entities to Which the Rule Will 

Apply 

The rule will directly affect small 

entities that participate as creditors as 

that term is defined in section 702 of the 

ECOA, except for small entities 

excluded from coverage by section 1029 

of the CFPA, because it will prohibit 

them from considering certain medical 

information in their underwriting 

decisions. This information has been 

available to creditors under the financial 

information exception. In limiting the 

circumstances under which medical 

debt information can be included on 

consumer reports, the rule will also 

directly affect some small consumer 

reporting agencies. Specifically, 

consumer reporting agencies that 

currently provide medical debt 

information to creditors for credit 

eligibility determinations will generally 

no longer be able to do so. 

For the purposes of assessing the 

impacts of the rule on small entities, 

‘‘small entities’’ are defined in the RFA 

to include small businesses, small 

nonprofit organizations, and small 

government jurisdictions.358 A ‘‘small 

business’’ is determined by application 

of Small Business Administration (SBA) 

regulations in reference to the North 

American Industry Classification 

System (NAICS) classification and size 

standards.359

There are several NAICS industries 

with small entities that may be subject 

to this rule. Consumer reporting 

agencies receive and assemble various 

types of consumer information and 

provide consumer reports to third 

parties for various purposes. Consumer 

reporting agencies are mostly contained 

within the NAICS industry ‘‘credit 

bureaus’’ (561450). However, not all 

entities within this NAICS code are 

consumer reporting agencies.360

Additionally, some consumer reporting 

agencies specialize in providing 

consumer reports to facilitate other 

operations, such as employment 

screening, check and bank account 

screening, and insurance, and not for 

credit purposes.361 Many small 

consumer reporting agencies will not be 

affected by the rule, either because they 

do not currently furnish consumer 

reports containing medical debt 

information or because, under the rule, 

consumer reports containing medical 

debt information may continue to be 

provided for purposes other than credit 

eligibility, such as employment 

screening or insurance. 

Creditors potentially directly affected 

by the rule are contained in multiple 

NAICS categories. These include 

depository institutions, such as 

commercial banks and credit unions, 

and non-depository institutions, such as 

mortgage and non-mortgage loan 

brokers, as well as firms that are 

primarily engaged in sales lending, 

consumer lending, or real estate credit. 

Creditors that currently use medical 

information related to debts, expenses, 

assets, and collateral in connection with 

a determination of a consumer’s 

eligibility, or continued eligibility, for 

credit will be directly affected by the 

rule. 

Medical debt holders, which include 

health care providers and debt buyers, 

may also be indirectly affected by the 

rule. The rule will not affect these 

entities’ ability to furnish information to 

consumer reporting agencies. However, 

because consumer reporting agencies 

will generally not be able to include 

medical debt on consumer reports 

provided to creditors for credit 

eligibility determinations, the rule may 

reduce the effectiveness of furnishing as 

a collection mechanism. Health care 

providers are broadly contained in the 

NAICS subsector 62. Debt collectors are 

contained in several NAICS categories, 

and include small entities such as debt 

buyers, collection agencies, and 

collection law firms. 

The SBA size standards use asset 

thresholds for depository institutions 

and revenue thresholds for nondepository institutions. Depository 

institutions are small if they have less 

than $850 million in assets. Consumer 

reporting agencies are small if they 

receive less than $47 million in annual 

revenues. Non-depository institutions in 

many industries are small if they receive 

less than $47 million in annual 

revenues, but the threshold is lower for 

some NAICS categories of nondepository institutions. The revenue 

thresholds for health care providers and 

debt collectors differ depending on the 

NAICS industry they belong to, ranging 

between $9 million in annual revenues 

and $47 million in annual revenues. 

Table 3 shows the number of small 

businesses within NAICS categories that 

may be subject to the rule according to 

the December 2023 NCUA and FFIEC 

Call Report data and the 2017 Economic 

Census data from the U.S. Census 

Bureau, which are the most recent 

sources of data available to the CFPB. 


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3348 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

362 Impacts to consumer reporting agencies are 

also described within part VII.E. 

TABLE 3—NUMBER OF ENTITIES WITHIN NAICS INDUSTRY CODES THAT MAY BE SUBJECT TO THE RULE

NAICS 

codes NAICS description 

Total 

number of 

entities 

Total 

number of 

small entities 

SBA size standard 

522110 ........ Commercial Banking ...................................................................................... 4,248 3,170 <$850M (assets). 

522130 ........ Credit Unions ................................................................................................. 4,702 4,202 <$850M (assets). 

522180 ........ Savings Institutions and Other Depository Credit Intermediation ................. 322 239 <$850M (assets). 

522210 ........ Credit Card Issuing ........................................................................................ 6 1 <$850M (assets). 

522220 ........ Sales Financing ............................................................................................. 2,367 2,124 <$47M. 

522291 ........ Consumer Lending ........................................................................................ 3,037 2,915 <$47M. 

522292 ........ Real Estate Credit ......................................................................................... 3,289 2,904 <$47M. 

522298 ........ International, Secondary Market, and All Other Non-depository Credit 

Intermediation.

5,422 128 <$47M. 

522310 ........ Mortgage and Nonmortgage Loan Brokers ................................................... 6,809 6,684 <$15M. 

522320 ........ Financial Transactions Processing, Reserve, and Clearinghouse Activities 3,068 2,928 <$47M. 

522390 ........ Other Activities Related to Credit Intermediation .......................................... 3,772 3,621 <$28.5M. 

541110 ........ Offices of Lawyers ......................................................................................... 163,725 833 <$15.5M. 

561440 ........ Collection Agencies ....................................................................................... 3,224 3,050 <$19.5M. 

561450 ........ Credit Bureaus ............................................................................................... 307 279 <$41M. 

621111 ........ Offices of Physicians (except Mental Health Specialists) ............................. 161,286 158,262 <$16M. 

621112 ........ Offices of Physicians, Mental Health Specialists .......................................... 10,561 10,407 <$13.5M. 

621210 ........ Offices of Dentists ......................................................................................... 125,329 124,787 <$9M. 

621310 ........ Offices of Chiropractors ................................................................................. 38,695 38,665 <$9M. 

621320 ........ Offices of Optometrists .................................................................................. 19,627 19,492 <$9M. 

621330 ........ Offices of Mental Health Practitioners (except Physicians) .......................... 24,236 23,958 <$9M. 

621340 ........ Offices of Physical, Occupational and Speech Therapists and Audiologists 26,722 26,217 <$12.5M. 

621391 ........ Offices of Podiatrists ...................................................................................... 7,304 7,241 <$9M. 

621399 ........ Offices of All Other Miscellaneous Health Practitioners ............................... 19,442 19,170 <$10M. 

621410 ........ Family Planning Centers ............................................................................... 1,472 1,398 <$19M. 

621420 ........ Outpatient Mental Health and Substance Abuse Centers ............................ 6,523 5,879 <$19M. 

621491 ........ HMO Medical Centers ................................................................................... 27 3 <$44.5M. 

621492 ........ Kidney Dialysis Centers ................................................................................. 431 374 <$47M. 

621493 ........ Freestanding Ambulatory Surgical and Emergency Centers ........................ 4,385 3,888 <$19M. 

621498 ........ All Other Outpatient Care Centers ................................................................ 6,630 5,845 <$25.5M. 

621511 ........ Medical Laboratories ..................................................................................... 3,365 3,106 <$41.5M. 

621512 ........ Diagnostic Imaging Centers .......................................................................... 4,272 3,898 <$19M. 

621610 ........ Home Health Care Services .......................................................................... 23,801 22,840 <$19M. 

621910 ........ Ambulance Services ...................................................................................... 3,071 2,940 <$22.5M. 

621999 ........ All Other Miscellaneous Ambulatory Health Care Services .......................... 3,557 3,332 <$20.5M. 

622110 ........ General Medical and Surgical Hospitals ....................................................... 2,560 1,130 <$47M. 

622210 ........ Psychiatric and Substance Abuse Hospitals ................................................. 396 213 <$47M. 

622310 ........ Specialty (except Psychiatric and Substance Abuse) Hospitals ................... 332 131 <$47M. 

623110 ........ Nursing Care Facilities (Skilled Nursing Facilities) ....................................... 9,137 8,374 <$34M. 

623210 ........ Residential Intellectual and Developmental Disability Facilities .................... 6,885 6,322 <$19M. 

623220 ........ Residential Mental Health and Substance Abuse Facilities .......................... 4,165 3,674 <$19M. 

623311 ........ Continuing Care Retirement Communities .................................................... 3,874 3,533 <$34M. 

623312 ........ Assisted Living Facilities for the Elderly ........................................................ 14,338 13,885 <$23.5M. 

623990 ........ Other Residential Care Facilities ................................................................... 3,194 2,931 <$16M. 

Total ..... ........................................................................................................................ 739,915 554,973 

Table 4 provides the estimated 

number of small entities within the 

categories of credit bureaus, depository 

institutions, and non-depository 

institutions, debt collectors (including 

debt buyers), and health care providers 

as well as the NAICS codes these 

entities may fall within. Under the rule, 

small consumer reporting agencies will 

no longer be able to provide to creditors 

consumer reports that contain medical 

debt information under the financial 

information exception. The CFPB is not 

able to precisely estimate the number of 

small consumer reporting agencies 

whose activities will be affected by the 

rule. As discussed above, many 

consumer reporting agencies currently 

specialize in providing consumer 

reports for purposes that will not be 

affected by the rule. Additionally, 

consumer credit markets currently rely 

heavily on consumer reports from 

consumer reporting agencies which are 

not small entities.362 For these reasons, 

the CFPB estimates that only a small 

fraction of the small consumer reporting 

agencies identified in Table 4 will be 

affected by the rule. The CFPB 

requested data to more precisely 

quantify the number of small consumer 

reporting agencies that will be affected 

by the rule, but did not receive relevant 

comments. 

Small creditors that will be directly 

affected by the rule are included in 

several NAICS categories that can be 

broadly divided into depository and 

non-depository institutions. Small 

creditors will be generally prohibited 

from considering medical information 

from consumer reports (and other 

sources) in credit eligibility 

determinations under the rule, unless a 

specific exception applies. However, 

some small creditors currently do not 

consider medical information that will 

be prohibited under the rule, and others 

only consider medical debt information 

if consumers disclose that they have 


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363Two small entity representatives provided this 

context in their comment letters. Written 

Submission of Evelyn Schroeder, Vice President, 

First Security Bank and Trust, to the CFPB, ‘‘Re: 

CFPB’s Outline of Proposals and Alternatives Under 

Consideration, Small Business Advisory Review 

Panel for Consumer Reporting Rulemaking’’ at 7 

(Nov. 6, 2023). Written Submission of Jeff Jacobson, 

Vice President, New Market Bank, to the CFPB, 

‘‘RE: SER response to SBREFA Outline for 

Consumer Reporting Rulemaking’’ at 5 (Nov. 6, 

2023). 

364The estimated number of small entities is 

calculated by taking the sum of the number of 

entities whose assets held or annual revenues fall 

below the relevant SBA thresholds for each NAICS 

code under the three categories, using the data 

presented in Table 3. When entity counts for a 

NAICS category in Table 3 are reported for two 

revenue limits (an upper and a lower bound), the 

average of the two entity counts is taken to estimate 

the number of small entities in that NAICS category. 

made monthly payment arrangements 

with medical debt holders.363

While all small creditors will be 

subject to the rule, the CFPB lacks the 

data to precisely quantify how many 

small creditors currently make credit 

decisions in ways that will be affected 

by the rule. Small creditors who are 

currently in compliance, whether in 

whole or in part, with the rule might not 

be impacted as much as small creditors 

who currently consider medical debt 

information (and certain other 

categories of medical information) from 

consumer reports or other sources. The 

CFPB requested data to precisely 

quantify the number of small creditors 

that may be directly affected by the rule, 

but did not receive relevant comments. 

TABLE 4—ESTIMATED NUMBER OF SMALL ENTITIES BY CATEGORY 364

NAICS code(s) 

Estimated 

number of 

small entities 

Consumer Reporting Agencies .............................. 561450 ............................................................................................................ 281 

Depository Institutions ............................................ 522110, 522130, 522180, 522210 ................................................................. 7,612 

Non-depository Institutions ..................................... 522220, 522291, 522292, 522310, 522320, 522390 ..................................... 14,454 

Debt Collectors ....................................................... 522298, 541110, 561440 ................................................................................ 4,011 

Healthcare Providers .............................................. 621111, 621112, 621210, 621310, 621320, 621330, 621340, 621391, 

621399, 621410, 621420, 621491, 621492, 621493, 621498, 621511, 

621512, 621610, 621910, 621999, 622110, 622210, 622310, 623110, 

623210, 623220, 623311, 623312, 623990.

521,895 

5. Projected Reporting, Recordkeeping, 

and Other Compliance Requirements of 

the Rule, Including an Estimate of the 

Classes of Small Entities Which Will Be 

Subject to the Requirement and the 

Type of Professional Skills Necessary 

for the Preparation of the Report 

The rule may impose reporting, 

recordkeeping, and other compliance 

requirements on small entities subject to 

the rule. These requirements generally 

differ for entities in two classes: credit 

bureaus that function as consumer 

reporting agencies, and depository or 

non-depository institutions that 

function as creditors. Based on Table 4, 

these requirements will be imposed on, 

at most, an estimated 281 small 

consumer reporting agencies and 22,006 

small creditors. The CFPB does not 

expect that debt collectors and health 

care providers listed in Table 4 will 

have reporting, record keeping and 

other compliance requirements. 

Requirements for Consumer Reporting 

Agencies 

Under the rule, consumer reporting 

agencies will only be able to provide to 

creditors (in connection with credit 

eligibility determinations) consumer 

reports that contain medical debt 

information if they have reason to 

believe that the creditor intends to use 

the medical debt information in a 

manner that is not prohibited. Thus, if 

consumer reporting agencies continue to 

receive and record medical debt 

information from furnishers, consumer 

reporting agencies may need to devise 

policies and procedures to ensure that 

they appropriately restrict the provision 

of medical debt information to creditors. 

However, these compliance costs may 

only apply to consumer reporting 

agencies who, at baseline, provide 

consumer reports containing medical 

debt information to creditors based on 

the existing financial information 

exception. It is the CFPB’s 

understanding that this task is mostly 

performed by the NCRAs (none of 

which are small entities), and the CFPB 

is not aware of any small consumer 

reporting agencies that provide 

consumer reports containing medical 

debt information to creditors at baseline. 

Compliance for affected small consumer 

reporting agencies will generally require 

professional skills related to software 

development, legal expertise, 

compliance, and customer support. The 

CFPB does not have the data to estimate 

the costs of reporting, recordkeeping, 

and other compliance requirements for 

small consumer reporting agencies, and 

requested but did not receive data to 

quantify these costs. 

Requirements for Creditors 

The rule will generally prohibit 

creditors from using information related 

to medical debt (among other categories 

of medical information) in credit 

eligibility decisions. The CFPB’s final 

rule prohibits CRAs from furnishing 

medical debt information to creditors 

pulling a general report in order to 

underwrite a loan, which means small 

creditors would not have to incur the 

compliance costs associated with 

updating their underwriting procedures 

to exclude medical debt information. 

However, creditors using their own 

proprietary credit score may choose to 

change their underwriting procedures in 

response. Currently, many creditors use 

medical debt information from 

consumer reporting agencies that will 

no longer be included in consumer 

reports under the rule. The rule will not 

change any existing law or guidance 

regarding the information that creditors 

must request from applicants. Creditors 

may use (or continue to use) certain 

information, including information 

relating to medical debt, that consumers 

provide in response to questions in 

credit applications that do not 

specifically request medical information 

to satisfy ability-to-repay requirements. 

The rule may cause creditors to modify 

their underwriting procedures to rely 

more heavily on consumer information 

that they obtain from credit 

applications. These changes will 

generally require professional skills 

related to compliance, underwriting, 

and legal expertise. The CFPB requested 

data and evidence to estimate these 

costs, but did not receive relevant 

comments. 


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3350 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

Requirements for Debt Collectors 

One debt collector trade association 

commented that initial compliance costs 

will be at least $100,000 per debt 

collector. This estimate included costs 

such as updating software, hiring 

attorneys to ensure compliance with the 

rule, renegotiating contracts with 

vendors, and updating their business 

practices. However, the rule will not 

prohibit debt collectors from furnishing 

medical debt information to consumer 

reporting agencies or directly impose 

any other reporting, recordkeeping, or 

other compliance burdens on them. As 

discussed in part VII.E.4, the rule may 

make furnishing a less effective means 

of inducing payment of medical debts. 

This may reduce debt collectors’ 

revenue; however, reductions in 

revenue will not be due to reporting, 

recordkeeping or compliance 

requirements that the rule imposes on 

debt collectors. 

Requirements for Health Care Providers 

The CFPB understands that at 

baseline, health care providers do not 

generally furnish medical debt 

information to consumer reporting 

agencies. But even if they do furnish 

debt collection information to consumer 

reporting agencies, as described above, 

the rule does not impose any 

requirements on furnishers, nor does the 

rule impose other requirements on 

health care providers. Accordingly, the 

CFPB has determined that the rule will 

not impose reporting, recordkeeping, 

and other compliance costs on health 

care providers. However, as discussed 

in part VII.E.4, the rule may make 

furnishing a less effective means of 

inducing payment of medical debts. 

This may impose costs on health care 

providers if they turn to other collection 

mechanisms that may be more costly or 

less effective than furnishing, such as 

debt collection litigation, or if the rule 

causes them to renegotiate contracts 

with medical debt buyers or debt 

collectors, but these costs will not be 

due to reporting, record keeping, or 

compliance requirements that the rule 

imposes on health care providers. 

6. Description of the Steps the Agency 

Has Taken To Minimize the Significant 

Economic Impact on Small Entities 

Consistent With the Stated Objectives of 

Applicable Statutes, Including a 

Statement of the Factual, Policy, and 

Legal Reasons for Selecting the 

Alternative Adopted in the Final Rule 

and Why Each One of the Other 

Significant Alternatives to the Rule 

Considered by the Agency Which Affect 

the Impact on Small Entities Was 

Rejected 

When developing the proposal, the 

CFPB decided to include a prohibition 

on consumer reporting agencies 

furnishing medical debt information to 

creditors who did not have a 

permissible purpose by virtue of the fact 

that this rule (or other laws) prohibit 

them from considering the information 

in credit underwriting. This provision 

was in large part proposed, and is now 

finalized, in order to minimize the 

economic impact on small entities. In 

the absence of such a prohibition, 

consumer reporting agencies might 

continue to include medical debt 

information on credit reports, in which 

case creditors would have to update 

underwriting models and credit scores 

to avoid giving it any weight. By 

prohibiting consumer reporting agencies 

from sending the data, creditors are able 

to forgo that substantial compliance 

cost. 

The CFPB considered exempting 

small entities from the rule, in whole or 

in part. Several commenters, including 

debt collectors, stated that the CFPB 

should consider limiting the scope of 

the rule to apply only to some forms of 

data, or to certain medical debts, such 

as those originating from emergency 

medical services. Another commenter 

stated that the CFPB should consider 

exempting small businesses below a 

certain size threshold. However, the 

CFPB has determined that such 

exemptions will not achieve the 

objective of FCRA section 604(g)(2) and 

the rule to protect consumer privacy 

with respect to sensitive medical 

information. 

The CFPB also considered several 

other alternatives to the rule that would 

possibly result in lower costs for small 

entities. These alternatives include: (1) 

alternative compliance timelines, (2) 

allowing creditors to consider specific 

types of medical information, (3) 

codifying and broadening the voluntary 

changes in medical collections reporting 

implemented by the NCRAs in 2022 and 

2023, (4) requiring consumer reporting 

agencies to independently investigate 

the accuracy of furnished medical debt 

collections, and (5) defining when a 

furnisher must investigate the accuracy 

of furnished medical collections 

information. 

The CFPB considered making the rule 

effective more than 60 days after the 

issuance of a final rule. During the 

SBREFA process, several small creditors 

stated that they would need time to 

comply with the proposals discussed at 

the panel. One small creditor stated that 

their compliance department is already 

working at full capacity to comply with 

recently issued rules, and that they and 

others in the financial industry would 

need additional time to comply with 

further rules. A debt collector trade 

association stated in a comment that an 

implementation period of 60 days is too 

short for small businesses to comply 

with the rule, while Advocacy stated 

that stakeholders believe it will take 18 

to 20 months to comply with the rule. 

The CFPB has determined that 

compliance with the rule would not 

impose significant compliance costs on 

small entities, and as a result the CFPB 

does not believe additional time for 

compliance is necessary. Further, 

allowing additional time for compliance 

would extend the period during which 

sensitive medical information may 

continue to be used for credit eligibility 

determinations. 

As described in the SBREFA Outline, 

the CFPB considered removing the 

financial information exception only 

with respect to medical information 

relating to debts, while continuing to 

allow creditors to consider medical 

information relating to expenses, assets, 

collateral, income, benefits, and the 

purpose of the loan. The CFPB has 

determined that a creditor’s 

consideration of medical information 

relating to expenses, assets, and 

collateral is not warranted, and is 

therefore removing the financial 

information exception with respect to 

these additional categories of medical 

information. 

The final three alternatives 

considered may not achieve some of the 

objectives of the rule. These alternatives 

were included in the discussions with 

small entity representatives and the 

SBREFA Panel. As discussed in part 

VII.B, the NCRAs voluntarily 

implemented changes in the consumer 

reporting of medical debt. Because their 

changes were voluntary, codifying and 

broadening the changes may protect 

consumers from the possibility that 

NCRAs might choose to reverse their 

policies in the future. The last two 

alternatives would serve to increase the 

accuracy of medical collections 

information on credit reports. The CFPB 

has determined that these three 

alternatives would not achieve the 

objective of protecting consumer 

privacy with respect to sensitive 

medical information. 

After considering these significant 

alternatives, the CFPB declines to adopt 

them because none of the alternatives 

would achieve the objective of FCRA 

section 604(g)(2) to protect consumer 

privacy with respect to sensitive 

medical information, and thus are not 

appropriate methods for reducing the 

economic impact on small entities in 

the context of this rule. 


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365 44 U.S.C. 3501. 

366Assurance of Voluntary Compliance/ 

Assurance of Voluntary Discontinuance (May 20, 

2015), In re Equifax Info. Servs., https://www.

ohioattorneygeneral.gov/Files/Briefing-Room/NewsReleases/Consumer-Protection/2015-05-20-CRAsAVC.aspx. 

367This practice continued through June 2022, 

when the 180-day period was extended to one year. 

PR Newswire, Equifax, Experian and TransUnion 

Remove Medical Collections Debt Under $500 From 

U.S. Credit Reports (Apr. 11, 2023), https://

www.prnewswire.com/news-releases/equifaxexperian-and-transunion-remove-medicalcollections-debt-under-500-from-us-credit-reports301793769.html. 

368Credit record data are described in detail by 

Christa Gibbs et al., Consumer Credit Reporting 

Data (forthcoming), J. Econ. Literature, https://

www.aeaweb.org/articles?id=10.1257/ 

jel.20241737&&from=f. 

369The CFPB considered two-year delinquency as 

an outcome because it is the standard used in credit 

scoring models. VantageScore, Credit Score Basics, 

Part 1: What’s Behind Credit Scores? (Nov. 2011), 

https://www.transunion.com/docs/rev/business/ 

financialservices/VantageScore_CreditScoreBasicsPart1.pdf. 

7. Description of the Steps the Agency 

Has Taken To Minimize Any Additional 

Cost of Credit for Small Entities 

Because the rule will only affect how 

small consumer reporting agencies 

report and small creditors obtain or use 

consumers’ medical information, the 

CFPB does not expect that the rule will 

affect the business lending market. The 

CFPB concludes that the costs of credit 

for small creditors and small consumer 

reporting agencies will not be impacted 

by the rule. Commenters, including the 

small entity representatives cited by 

Advocacy in its comment, stated the 

possibility of credit score creep 

increasing underwriting standards more 

broadly. To the extent that this happens, 

the cost of credit may rise for small 

business owners who rely on personal 

credit. However, because the share of 

consumers with medical collections on 

their consumer reports is only 5 percent 

at baseline, the CFPB views this 

possibility as unlikely. 

IX. Paperwork Reduction Act 

The CFPB has determined that the 

final rule would not impose any new 

information collections or revise any 

existing recordkeeping, reporting, or 

disclosure requirements on covered 

entities or members of the public that 

would be collections of information 

requiring approval by the Office of 

Management and Budget under the 

Paperwork Reduction Act.365 The 

existing information collections 

contained in Regulation V, which 

implements the FCRA, are approved by 

OMB under OMB Control Number 

3170–0002 which currently has an 

expiration date of October 31, 2025. 

X. Congressional Review Act 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), the CFPB will 

submit a report containing this rule and 

other required information to the U.S. 

Senate, the U.S. House of 

Representatives, and the Comptroller 

General of the United States at least 60 

days prior to the rule’s published 

effective date. The Office of Information 

and Regulatory Affairs has designated 

this rule as a ‘‘major rule’’ as defined by 

5 U.S.C. 804(2). 

XI. Severability 

The CFPB intends that, if the 

consumer reporting agency prohibition 

on furnishing medical debt information 

finalized in § 1022.38 (or any provision 

or application of that section) is stayed 

or determined to be invalid, the 

amendments to § 1022.30 are severable 

and shall continue in effect. The CFPB 

also intends that if the amendments to 

§ 1022.30 (or any provisions or 

applications of those amendments) were 

stayed or determined to be invalid, 

§ 1022.38(b)(1) would not take (or 

continue in) effect, because it relies on 

the amendments to § 1022.30, but 

§ 1022.38(b)(2) is severable and shall 

continue in effect. Furthermore, if the 

result of a stay or judicial determination 

is that creditors are generally able to 

obtain or use medical information in 

connection with determinations of 

consumers’ eligibility, or continued 

eligibility, for credit, the CFPB intends 

the prior version of § 1022.30(d) to 

continue in effect. 

XII. Technical Appendix 

This appendix describes the technical 

details of the CFPB’s analysis that aims 

to estimate how medical collection 

consumer reporting affects consumer 

access to credit, considering an 

‘‘equilibrium’’ in which all medical 

collection tradelines are removed from 

consumer reports, as under the rule. The 

analysis also compares the performance 

of new credit accounts that can be 

traced to creditors’ inquiries for 

consumers that have medical 

collections. The analysis exploits a 

change in consumer reporting practices 

that occurred in 2017 that has prevented 

medical collections that are less than 

180 days past their date of first 

delinquency from appearing on 

consumer reports obtained from the 

nationwide consumer reporting agencies 

(NCRAs).366 As a result of this change, 

when consumers applied for credit in 

the 180 days before a medical collection 

tradeline was added to their consumer 

report, they had an outstanding medical 

debt that was in collections, but 

creditors would not have seen evidence 

of those medical collections on 

consumer reports when making 

determinations about whether to extend 

credit to the consumers.367

1. Data Used 

The data for this analysis are derived 

from the CFPB’s Consumer Credit 

Information Panel (CCIP), a 1-in-50 deidentified nationally representative 

sample of credit records from one of the 

three NCRAs. The data include 

information on consumers’ credit 

accounts, collections, public records, 

credit scores, and inquiries, which are 

creditor requests for consumer reports. 

Each credit account is described by a 

‘‘tradeline,’’ which includes the 

account’s product type, balance amount, 

initial credit limit or loan principal, 

date of origination, anonymized firm 

identifier, and delinquency status.368

Collections are also described by 

tradelines, which include the 

collection’s balance amount, the original 

creditor’s industry classification, and 

the date that the collection was added 

to the consumer report. Each inquiry 

includes the product type for which the 

consumer applied and the date that the 

inquiry was made. The sample used in 

the analysis includes all inquiries made 

by creditors within 180 days of a 

medical collection tradeline’s addition 

to a consumer report. In other words, 

the sample includes inquiries made 

within 180 days of the time each 

medical collection became visible to 

creditors. 

The CFPB created two datasets to 

estimate the effect of medical collection 

reporting on access to credit and credit 

account performance. The first dataset 

includes all inquiries made in the 180 

days before and after each medical 

collection’s addition to a consumer 

report (inquiry dataset). The second 

dataset includes the two-year 

performance of all credit account 

tradelines that can be traced back to an 

inquiry in the inquiry dataset 

(performance dataset).369 Both datasets 

only include inquiries made and credit 

account tradelines opened in response 

to credit applications from consumers 

with medical collections. The analysis 

is limited to inquiries associated with 

medical collections first reported at 

least six months after the final 

implementation of the NCAP in 

September 2017, which ensured that all 

medical collections were identifiable as 

such and that all consumers with 

reported medical collections had a pastdue medical bill for at least 180 days 

prior to the medical collection’s 


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370Prior to NCAP, the field in credit record data 

indicating the original creditor type of a collections 

tradeline was optional and was left blank by the 

furnisher for around a quarter of all collections 

tradelines in the CCIP. Some of these tradelines 

with unreported original creditor type were likely 

medical collections tradelines. One component of 

the NCAP was to make the original creditor type a 

mandatory field, such that all medical collections 

reported after September 2017 can be identified as 

such. 

371The sample is limited to inquiries associated 

with medical collections added to consumer reports 

between March 2018 and July 2023 because the 

dataset needs to include all inquiries made within 

a 361-day window of each medical collection. A 

medical collection reported before March 2018 may 

have an associated inquiry that was made before the 

September 2017 reporting change, while a medical 

collection reported after July 2023 may have an 

associated inquiry that was made after the final date 

of the CFPB’s CCIP at the time of the research 

analysis, January 2024. The sample includes 

inquiries made in the 180 days before a medical 

collection is reported because all consumers have 

an outstanding medical collection during that 

period, and includes inquiries made in the 180 days 

after a medical collection is reported in order to 

have a balanced window. Additionally, note that 

the sample may omit some inquiries associated 

with medical collections. Some collections may not 

have been reported to all three NCRAs, so the CFPB 

may not observe all consumers’ medical collections. 

372The NCRAs removed medical collections with 

balances below $500 from consumer reports in 

April 2023. The datasets include inquiries made 

through January 2024, and so a small portion of the 

inquiries in the datasets were subject to this 

removal. All of these inquiries are included in the 

‘‘over-$500’’ sample of the results. See PR 

Newswire, Equifax, Experian and TransUnion 

Remove Medical Collections Debt Under $500 From 

U.S. Credit Reports (Apr. 11, 2023), https://

www.prnewswire.com/news-releases/equifaxexperian-and-transunion-remove-medicalcollections-debt-under-500-from-us-credit-reports301793769.html. 

373PR Newswire, Equifax, Experian and 

TransUnion Remove Medical Collections Debt 

Under $500 From U.S. Credit Reports (Apr. 11, 

2023), https://www.prnewswire.com/news-releases/ 

equifax-experian-and-transunion-remove-medicalcollections-debt-under-500-from-us-credit-reports301793769.html. 374Furthermore, the reporting changes may 

impact how creditors used medical collections in 

their credit eligibility determinations. For example, 

suppose creditors weighted medical collections 

more heavily in their determinations after the April 

2023 reporting change. Then inquiries made with 

reported medical collections after April 2023 may 

have a lower success rate than inquiries made prior 

to the change. The estimated coefficient provides an 

average impact of medical collection reporting on 

inquiry success and cannot identify these potential 

changes in creditor behavior. 

375Lucas Nathe & Ryan Sandler, Consumer Fin. 

Prot. Bureau, Paid and Low-Balance Medical 

Collections on Consumer Credit Reports (July 2022), 

https://www.consumerfinance.gov/data-research/ 

research-reports/paid-and-low-balance-medicalcollections-on-consumer-credit-reports/. 

376Ryan Sandler & Zachary Blizard, Consumer 

Fin. Prot. Bureau, Recent Changes in Medical 

Collections on Consumer Credit Records Data Point, 

at 3–4, 17 (Mar. 2024), https://

files.consumerfinance.gov/f/documents/cfpb_

recent-changes-medical-collections-on-consumercredit-reports_2024-03.pdf. 

appearance on their consumer report.370

Given these constraints, the dataset 

includes inquiries associated with 

medical collections that were furnished 

to the NCRA that provides the CFPB’s 

CCIP between March 2018 and July 

2023.371

Each dataset in the primary sample 

includes a subsample of inquiries and 

tradelines that were associated with 

medical collection tradelines having 

initial balances over $500 and that were 

made when any other medical 

collection tradelines on the consumer 

report had initial balances over $500. 

This specification is referred to as the 

‘‘over-$500’’ sample and mimics the 

current reporting environment in which 

medical collections under $500 are not 

included on consumer reports.372 The 

CFPB also created versions of the 

inquiry and performance datasets that 

do not make any restrictions on the 

dollar amount of medical collection 

tradelines and presents results for this 

‘‘full sample’’ in parallel with those for 

the ‘‘over-$500 sample.’’ 

Creditors only observe the consumer 

reports of consumers that apply for 

credit, so the analysis is inherently 

limited to consumers that actively seek 

credit. The CFPB found in the proposed 

rule, and included in part VII.E.5, that 

there was a near-zero change in 

consumers’ propensity to demand credit 

when medical collections under $500 

were removed from consumer reports. 

The CFPB expects that the composition 

of consumers actively seeking credit 

will not be affected by the rule. 

When a consumer has multiple 

medical collection tradelines, the data 

contain duplicates of the inquiries and 

credit account tradelines if they occur 

within 180 days of different medical 

collection tradelines. For example, 

suppose a consumer has two medical 

collection tradelines that are first 

reported on May 1 and on September 1. 

Suppose a creditor makes an inquiry on 

August 1. This inquiry will appear in 

the inquiry dataset twice: once for the 

May 1 collection, and once for the 

September 1 collection. Inquiries and 

credit account tradelines are also 

duplicated when consumers have 

multiple medical collection tradelines 

reported on the same day. 

Three reporting changes occurred 

during the sample period that removed 

certain types of medical collections 

from consumer reports.373 However, 

because the analysis exploits the date 

that a medical collection was added to 

a consumer report instead of the date it 

was removed from a consumer report, 

these changes do not undermine the 

general methodology of the analysis. 

The reporting changes do affect the 

types of medical collections that were 

on consumer reports when inquiries 

were made.374 The CFPB first describes 

each of these three changes and their 

impact, before addressing the 

consequences for the analysis. First, all 

paid medical collections were removed 

from consumer reports in June 2022. 

Fewer than 2.5 percent of medical 

collections reported between January 

2017 and March 2022 were ever marked 

as paid.375 Second, medical collections 

that were between 180 days and 365 

days past due were removed from 

consumer reports in June 2022, and the 

delay before medical collections could 

be added to consumer reports was 

permanently extended to one year. The 

CFPB does not have an estimate of how 

many medical collections were affected 

by this change, as the number of days 

that the medical debt is past due is not 

provided in the CCIP. Finally, all 

medical collections under $500 were 

removed from the NCRAs’ consumer 

reports in April 2023. Combined, these 

reporting changes contributed to a large 

decline in the number of consumers 

with medical collection tradelines on 

their consumer report, from 14 percent 

of consumers in March 2022 to 5 

percent of consumers in June 2023.376

Because of these reporting changes for 

some inquiries that were made after a 

medical collection tradeline was first 

reported, the medical collection may not 

have been present on the consumer 

report by the date of the inquiry. For 

example, if a consumer had a medical 

collection with an initial balance less 

than $500 first reported in February 

2023, and an inquiry in May 2023, the 

inquiry would be classified as occurring 

about three months after the collection 

but would not in fact have that 

collection tradeline included on the 

consumer report at the time of the 

inquiry. The CFPB expects this to 

attenuate the results, as inquiries made 

‘‘with medical collection reporting’’ 

would have outcomes more similar to 

inquiries with the medical collection 

not yet reported. Medical collections 

reported before January 2022 would not 

have associated inquiries affected by 

any of these reporting changes. 

The analysis of the performance 

dataset is not affected by the recent 

reporting changes. Because the focus is 

on two-year performance, the 

performance analysis only included 

tradelines opened before January 2022, 

as they require sufficient time to 

measure two-year performance. 

Therefore, the performance regressions 

are not impacted by these medical 

collection removals. 

Commenters including a bank trade 

association commenter and a researcher 

stated that the time period considered in 

the proposal was not reflective of the 


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377Mary-Alice Doyle & Laura Feeney, Quick 

Guide to Power Calculations, Abdul Latif Jameel 

Poverty Action Lab, https://www.poverty

actionlab.org/resource/quick-guide-powercalculations (last updated Mar. 2021). 

378 See NRDC v. Thomas, 805 F.2d 410, 418 n.13 

(D.C. Cir. 1986); see also Riverkeeper Inc. v. EPA, 

475 F.3d 83, 112 (2d Cir. 2007), rev’d on other 

grounds, 556 U.S. 208 (2009). 

379Consumer Fin. Prot. Bureau, Paid and LowBalance Medical Collections on Consumer Credit 

Reports (July 27, 2022), https://

www.consumerfinance.gov/data-research/researchreports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/. 

380A challenge in studying the impact of medical 

collections tradelines is that a shock to consumers’ 

health, such as an injury or illness that results in 

hospitalization, may affect credit outcomes 

independently. Given this challenge, one benefit of 

these collection debt transfers is that it means that 

the medical expense that resulted in the medical 

collections tradeline is relatively more likely to 

have occurred long before the medical collection 

appeared. 

current market because it was marked 

with instability in the medical debt 

collection environment, including 

pandemic-era changes and State policy 

changes. The CFPB acknowledges this 

limitation but finds it infeasible to study 

two-year delinquency risk without using 

accounts that were originated at least 

two years ago. Furthermore, because 

relatively few medical collections are 

included on consumer reports at 

baseline, the analysis needs to 

incorporate older data to have sufficient 

statistical power to identify statistically 

significant effects.377 The CFPB expects 

that any differences in consumer 

behavior as a result of these changes, 

compared to the current baseline, may 

affect the magnitude of the results but 

not the direction. For example, if 

mortgage forbearance caused fewer 

consumers with medical collections to 

become delinquent on their mortgages, 

the estimated difference in mortgage 

performance between consumers with 

reported medical collections and 

consumers with unreported medical 

collections may be smaller than at the 

current baseline. However, there should 

be no difference in the coefficient’s sign 

if consumers with unreported 

collections are more likely, in any time 

period, to be seriously delinquent than 

consumers with reported medical 

collections because creditors use 

medical collection information to avoid 

bad debt risks. 

Other commenters, including at least 

one researcher and at least one debt 

collector, stated that the analysis in the 

Technical Appendix to the proposed 

rule is subject to self-selection bias 

because only consumers actively 

seeking credit are included in the 

dataset. The inquiry and performance 

datasets are structured at the inquiry or 

credit account tradeline level, and not at 

the consumer or medical collection 

level. This means the analysis can be 

interpreted as modeling credit decisions 

and outcomes from creditors’ 

perspective, rather than modeling the 

decisions of consumers or debt 

collectors. 

Commenters, including at least one 

debt collector, health care provider, 

researcher, and individual, stated that 

the results of the Technical Appendix 

were skewed or too narrow because they 

were limited to medical collections with 

initial balances over $500. As described 

above, the CFPB also presents results for 

the full sample, regardless of medical 

collection balance amount. The results 

from this sample are similar to those in 

the primary sample, as described below. 

Multiple researcher commenters 

stated that the results of the CFPB’s 

analysis could not be validated or fully 

evaluated with the information included 

in the Notice of Proposed Rulemaking. 

Releasing the data would be a violation 

of the CFPB’s contract with the NCRA 

that provides its CCIP, however, and 

courts have held that an agency can rely 

on confidential information in its 

rulemaking so long as the agency 

discloses information to allow 

interested parties to comment on the 

methodology and general data.378 Here, 

the CFPB discussed its data set, 

provided information about its 

methodologies, and invited interested 

parties to comment. The CFPB 

considered the comments that 

addressed the analysis and has 

determined that the available evidence 

supports the choices made in the final 

rule. While some commenters also 

suggested that the CFPB erred in not 

obtaining peer review of its analysis, 

they did not articulate why peer review 

would be required in this rulemaking. 

2. Construction of the Inquiry Dataset 

Because inquiries in the dataset are 

made in the 180 days before and after 

a medical collection is reported, the 

inquiries in the dataset occurred 

between September 2017 and January 

2024. The dataset includes the number 

and type of medical and nonmedical 

collection tradelines that were included 

on the consumer report at the time each 

inquiry was made. 

Identifying unique medical 

collections over time in the CCIP may be 

imprecise; the CFPB assumes that 

unique medical collections are 

characterized by their dollar amounts, 

dates of medical collection account 

opening (usually the date the medical 

collection was assigned to the debt 

collector or other furnisher), and dates 

of the account’s addition to the 

consumer report. Medical collections 

are rarely consistently reported for the 

full seven-year period for reporting 

adverse information permitted by the 

Fair Credit Reporting Act.379 This poses 

challenges in tracking the same medical 

debt over time, as debts can disappear 

and reappear. Medical debts in 

collections are often transferred between 

debt collectors (e.g., reassigned to a 

different collector by the health care 

provider or sold to a debt buyer), and 

when this happens the dates and dollar 

amounts associated with the medical 

collection tradelines may change, 

making it difficult to link these records. 

While these may be experienced as 

unique collections by the consumer as 

a new debt collector attempts to make 

contact, they may not be representative 

of the number of unique medical debts 

that each consumer has, as many of the 

debts are reflected by multiple 

subsequent collections.380


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381See Charles Romeo & Ryan Sandler, Off. of 

Rsch., Consumer Fin. Prot. Bureau, The effect of 

debt collection laws on access to credit, 195 J. Econ. 

(2021), https://ssrn.com/abstract=3124954; 

Consumer Fin. Prot. Bureau, Credit Trends: Market 

dashboards (Dec. 10, 2019), https://

www.consumerfinance.gov/data-research/ 

consumer-credit-trends/. 382The inquiries are considered to be within a 

shopping window if they are within 14 days for 

credit cards and auto loans, 120 days for mortgages, 

and 30 days for all other loan types, following 

approaches used in academic research and the 

CFPB’s Consumer Credit Trends credit tightness 

series, both of which use data similar to the CCIP. 

See Charles Romeo & Ryan Sandler, Off. of Rsch., 

Consumer Fin. Prot. Bureau, The effect of debt 

collection laws on access to credit, 195 J. Econ. 

(2021), https://ssrn.com/abstract=3124954; 

Consumer Fin. Prot. Bureau, Credit Trends: Market 

dashboards (Dec. 10, 2019), https://

www.consumerfinance.gov/data-research/ 

consumer-credit-trends/. 383This follows approaches used in academic 

research and the CFPB’s Consumer Credit Trends 

credit tightness series, both of which use data 

similar to the CCIP. See Charles Romeo & Ryan 

Sandler, Off. of Rsch., Consumer Fin. Prot. Bureau, 

The effect of debt collection laws on access to 

credit, 195 J. Econ. (2021), https://ssrn.com/ 

abstract=3124954; Consumer Fin. Prot. Bureau, 

Credit Trends: Market dashboards (Dec. 10, 2019), 

https://www.consumerfinance.gov/data-research/ 

consumer-credit-trends/. 

384When multiple credit account tradelines 

within a time 14, 30, or 120 days of an inquiry (as 

appropriate for the type of credit) are observed, the 

tradeline with the earliest origination date is kept. 

385Credit account tradelines are matched over 

time either using the tradeline’s account number or 

the tradeline’s date of account opening and loan 

type. Tradelines are matched on origination date 

and loan type when there is no match on account 

number because account numbers can change when 

an account is lost or transferred, e.g., if a consumer 

loses their credit card and has a new card issued. 

The inquiry dataset is used to 

estimate the impact of medical 

collection reporting on consumers’ 

access to credit, as measured by inquiry 

success. The CFPB classifies an inquiry 

as ‘‘successful’’ if the inquiry leads to an 

open tradeline. This definition of 

‘‘success’’ does not necessarily mean 

that the specific credit application that 

generated the inquiry was being 

approved. The CFPB cannot directly 

observe whether the specific credit 

application that generated the inquiry in 

question was approved, and it is 

challenging to infer approval for a 

specific inquiry for several reasons. 

First, the CCIP does not include 

inquiries made to other NCRAs, and 

creditors do not always make inquiries 

to all three NCRAs. The CCIP therefore 

includes credit account tradelines that 

cannot be matched to an inquiry. These 

tradelines cannot be included in the 

CFPB’s analysis because the empirical 

strategy requires that one know the date 

of each tradeline’s associated inquiry. 

Second, the CCIP does not include 

creditor names, but instead has an 

anonymized company identifier; 

however, a particular creditor often has 

a different identifier for inquiries and 

for opened credit account tradelines. 

Thus, even if the consumer opened a 

tradeline with the same creditor that 

pulled their consumer report, it may not 

be identifiable as such in the data. 

Therefore, the CFPB cannot be certain 

that the observed inquiry is associated 

with a specific opened tradeline. The 

CFPB instead follows approaches used 

in academic research and the CFPB’s 

Consumer Credit Trends credit tightness 

series and assumes that a credit account 

is associated with an inquiry if it is 

opened within a certain number of days 

after the observed inquiry and is of the 

same credit account type.381 The 

number of days varies for different 

account types because of differences in 

the typical length of time between an 

account application and origination.382

Finally, when consumers shop for 

credit, multiple inquiries may be made 

in a narrow window of time, even 

though the consumer only intends to 

open one account. The CFPB assumes 

that multiple inquiries for one consumer 

within a certain shopping window 

indicate the consumer’s shopping 

behavior, and therefore only the last of 

these inquiries is included in the 

datasets, where each credit account 

type’s window length is equivalent to its 

maximum time-to-origination.383 For 

example, if a consumer had inquiries 

from mortgage lenders on April 1 and 

May 1, these would be treated as one 

observation, dated May 1, and it would 

be counted as a successful inquiry if a 

mortgage account was opened by 

August 29. 

A researcher commenter restated the 

limitations described above, which were 

also described in the proposal, but 

characterized this discussion as 

indicating that the CFPB did not have a 

‘‘clean standard’’ to identify inquiry 

success in the Technical Appendix to 

the proposed rule. As described above 

and in the rule, the CFPB’s construction 

of inquiry success is the best available 

measure and has been used in academic 

research and the CFPB’s policy research. 

3. Construction of the Performance 

Dataset 

The performance dataset includes all 

originated credit account tradelines that 

are associated with successful inquiries 

in the inquiry dataset. The match 

between credit account tradelines and 

inquiries is one-to-one: each tradeline is 

matched to one inquiry, and each 

inquiry is matched to, at most, one 

tradeline.384 The CFPB calculated the 

two-year performance for each 

originated credit account tradeline, with 

performance success measured by 

whether the tradeline was ever 90 or 

more days delinquent (seriously 

delinquent) within the first two years of 

its origination date.385 Because the 

CFPB focuses on two-year performance, 

credit account tradelines opened after 

January 2022 are not included in the 

analysis as the CFPB cannot observe a 

full two years after origination. The 

CFPB was able to identify the two-year 

performance of over 94 percent of the 

credit account tradelines opened before 

January 2022. The exceptions are 

accounts that stopped being reported by 

the furnisher before the end of two 

years. 

4. Inquiry Summary Statistics 

TABLE 5—INQUIRY SUMMARY STATISTICS 386

(1) 

Credit cards 

(2) 

Mortgages 

(3) 

Other inq. type 

Panel A: Unsuccessful, Over $500 Sample: 

Shopping window (days) .............................................................................................. 0.47 16.87 0.89 

No. open mortgages ..................................................................................................... 0.03 0.11 0.04 

No. open credit cards ................................................................................................... 0.73 1.18 0.68 

No. open other trades .................................................................................................. 0.61 0.82 0.64 

Any D90+ trades ........................................................................................................... 0.30 0.29 0.29 

Credit score .................................................................................................................. 563.89 613.81 566.76 

Obs. (Unique Inquiries) ................................................................................................ 259,532 44,524 218,127 

Panel B: Successful, Over $500 Sample: 

Shopping window (days) .............................................................................................. 1.00 42.74 1.11 

No. open mortgages ..................................................................................................... 0.07 0.23 0.07 

No. open credit cards ................................................................................................... 1.36 1.85 1.11 


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386Each panel in the table includes one 

observation per inquiry. All values are means. 

Panels A and B limit the sample to consumers with 

at least one inquiry that is associated with a 

medical collection over $500 and includes no 

medical collections on the consumer report under 

$500 when the inquiry is made. Panels C and D 

include the full sample. Panels A and C includes 

all inquiries that do not correspond to a tradeline 

opened within the inquiry type’s origination 

window. Panels B and D includes all inquiries that 

can be matched to an originated tradeline. 

‘‘Shopping window (days)’’ provides the length of 

the shopping window for each inquiry, where the 

shopping window is equal to zero if all inquiries 

are made on the same day. Variables providing the 

number of open accounts for a given credit account 

type, ‘‘No. open’’, describe the number of accounts 

of a given type that appeared on the consumer 

report in the month before the inquiry. ‘‘Any D90+ 

trades’’ is equal to one if the consumer had at least 

one tradeline (open or closed) that had been at least 

90+ days delinquent in the last seven years 

included on their consumer report in the month 

before the inquiry. ‘‘Credit score’’ is equal to the 

credit score in the month before the inquiry. ‘‘Credit 

amount’’, ‘‘Two-year D90+’’, and ‘‘Past due 

amount’’ describe tradelines that opened in 

response to the inquiry, where ‘‘Credit amount’’ 

provides the credit limit of revolving accounts or 

credit account principal of installment accounts, 

‘‘Two-year D90+’’ is equal to one if the account is 

at least 90 days delinquent within two years of its 

origination date, and ‘‘Past due amount’’ is the 

dollar amount past due on the account after two 

years. These variables cannot be included in Panels 

A and C because no account was opened in 

response to unsuccessful inquiries. 

387These characteristics are considered as of the 

month or quarter before the inquiry because they 

can be affected by the outcome of the inquiry. The 

month before the inquiry is used when data is 

available, but only quarterly data are available prior 

to 2020 for some variables. 

TABLE 5—INQUIRY SUMMARY STATISTICS 386—Continued 

(1) 

Credit cards 

(2) 

Mortgages 

(3) 

Other inq. type 

No. open other trades .................................................................................................. 0.71 0.99 1.08 

Any D90+ delinquent trades ......................................................................................... 0.26 0.20 0.29 

Credit score .................................................................................................................. 624.44 673.12 602.45 

Credit amount ............................................................................................................... 1,645.96 244,846.31 5,374.88 

Two-year D90+ ............................................................................................................. 0.21 0.03 0.25 

Past due amount .......................................................................................................... 145.19 304.43 661.84 

Obs. (Unique Inquiries) ................................................................................................ 117,147 11,188 13,160 

Panel C: Unsuccessful, Full Sample: 

Shopping window (days) .............................................................................................. 0.46 16.09 0.86 

No. open mortgages ..................................................................................................... 0.03 0.12 0.04 

No. open credit cards ................................................................................................... 0.69 1.15 0.64 

No. open other trades .................................................................................................. 0.56 0.80 0.60 

Any D90+ trades ........................................................................................................... 0.30 0.30 0.30 

Credit score .................................................................................................................. 562.12 607.76 563.39 

Obs. (Unique Inquiries) ................................................................................................ 892,295 171,704 761,275 

Panel D: Successful, Full Sample: 

Shopping window (days) .............................................................................................. 0.97 40.69 1.06 

No. open mortgages ..................................................................................................... 0.08 0.26 0.06 

No. open credit cards ................................................................................................... 1.32 1.84 0.98 

No. open other trades .................................................................................................. 0.70 0.96 1.04 

Any D90+ trades ........................................................................................................... 0.27 0.20 0.30 

Credit score .................................................................................................................. 621.08 670.13 597.12 

Credit amount ............................................................................................................... 1,582.59 238,199.13 5,597.18 

Two-year D90+ ............................................................................................................. 0.20 0.03 0.23 

Past due amount .......................................................................................................... 125.17 201.84 598.32 

Obs. (Unique Inquiries) ................................................................................................ 409,209 42,138 52,669 

Table 5 provides summary statistics 

for the unique inquiries in the data. The 

summary statistics are provided 

separately for ‘‘unsuccessful’’ inquiries 

that do not result in originated credit 

account tradelines, which are provided 

in Panels A and C, and for ‘‘successful’’ 

inquiries that can be associated to 

originated tradelines, which are 

provided in Panels B and D. Panels A 

and B are limited to the over-$500 

sample, while Panels C and D provide 

summary statistics for the full sample. 

Table 5 shows that successful inquiries 

are associated with stronger credit 

profiles for every inquiry type and for 

both considered samples. The average 

successful credit applicant has more 

open pre-existing credit account 

tradelines, fewer seriously delinquent 

pre-existing credit account tradelines, 

and a higher credit score in the month 

or quarter before inquiry was made than 

the average unsuccessful credit 

applicant.387 The table also shows that 

successful credit applicants shop for 

longer than unsuccessful credit 

applicants in the sample. Panels B and 

D further include the average 

characteristics of credit accounts 

opened in response to successful 

inquiries, measuring the credit limit at 

time of origination, the past due 

amount, and serious delinquency status 

two years after origination, showing that 

credit cards are much more likely than 

mortgages to be seriously delinquent 

within two years from opening, perhaps 

in part because credit cards are 

unsecured. However, the average past 

due amount is lower for credit cards, 

perhaps because average credit card 

monthly minimum payments are much 

lower than mortgage monthly payment 

amounts. 

5. Consumer Summary Statistics 


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388Each panel in the table includes one 

observation per consumer. All values are means. 

Panel A limits the sample to consumers with at 

least one inquiry that is associated with a medical 

collection over $500 and includes no medical 

collections under $500 on the consumer report 

when the inquiry is made. Panel B includes the full 

sample. ‘‘No. medical collections’’ provides the 

number of unique medical collections in the sample 

for each consumer. Because each observation in the 

analysis dataset corresponds to an inquiry, 

consumers may have additional medical collections 

that are not represented in the sample if there were 

no inquiries made in the 180 days before or after 

those medical collections were first reported. 

‘‘Months between date of last med. coll. and date 

of first med. coll.’’ provides the number of months 

between each consumer’s medical collections, for 

those medical collections that are represented in the 

sample. The ‘‘No. inquiries’’ variables only include 

inquiries made in the 180 days before or after a 

medical collection was first reported; consumers 

may have other inquiries that are not included in 

the data if they did not fall within these 361-day 

windows. Variables ‘‘at first inquiry’’ are provided 

for each consumer’s earliest inclusion in the 

sample, as they may change within consumers over 

time. There are fewer consumer observations 

corresponding to average credit scores than for the 

other statistics in both panels because average 

credit score is only calculated using data from 

consumers whose credit scores are non-missing. 

There are also some consumers with missing birth 

year that are not included in the calculation of 

average age. State regional shares were calculated 

using Census Regions; see U.S. Census Bureau, 

Geographic Levels, https://www.census.gov/ 

programs-surveys/economic-census/guidancegeographies/levels.html (last revised Oct. 8, 2021). 

389Consumer Fin. Prot. Bureau, Borrower risk 

profiles, https://www.consumerfinance.gov/dataresearch/consumer-credit-trends/student-loans/ 

borrower-risk-profiles/ (last visited May 9, 2024). 

390U.S. Census Bureau, 19% of U.S. Households 

Could Not Afford to Pay for Medical Care Right 

Away (Apr. 7, 2021), https://www.census.gov/ 

library/stories/2021/04/who-had-medical-debt-inunited-states.html. 

391Consumer Fin. Prot. Bureau, Paid and LowBalance Medical Collections on Consumer Credit 

Reports (July 27, 2022), https://

www.consumerfinance.gov/data-research/researchreports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/. 

TABLE 6—CONSUMER SUMMARY STATISTICS 388

(1) 

Mean 

(2) 

Median 

(3) 

Obs. 

(unique consumers) 

Panel A: Over $500 Sample: 

No. medical collections ................................................................................................. 2.24 1.00 266,147 

Months between date of last med. coll. and date of first med. coll ............................. 20.47 0.00 266,147 

No. credit card inquiries ............................................................................................... 1.42 1.00 266,147 

No. mortgage inquiries ................................................................................................. 0.21 0.00 266,147 

No. other inquiries ........................................................................................................ 1.11 1.00 266,147 

Credit score at first inquiry ........................................................................................... 594.52 588.00 214,485 

Missing credit score at first inquiry ............................................................................... 0.19 0.00 266,147 

Consumer age at first inquiry ....................................................................................... 40.29 38.00 261,488 

Northeastern share at first inquiry ................................................................................ 0.08 0.00 266,147 

Midwestern share at first inquiry .................................................................................. 0.15 0.00 266,147 

Southern share at first inquiry ...................................................................................... 0.61 1.00 266,147 

Western share at first inquiry ....................................................................................... 0.14 0.00 266,147 

Panel B: Full sample: 

No. medical collections ................................................................................................. 4.08 2.00 688,682 

Months between date of last med. coll. and date of first med. coll ............................. 35.77 10.92 688,682 

No. credit card inquiries ............................................................................................... 1.89 1.00 688,682 

No. mortgage inquiries ................................................................................................. 0.31 0.00 688,682 

No. other inquiries ........................................................................................................ 1.52 1.00 688,682 

Credit score at first inquiry ........................................................................................... 596.10 590.00 558,362 

Missing credit score at first inquiry ............................................................................... 0.19 0.00 688,682 

Consumer age at first inquiry ....................................................................................... 41.89 40.00 676,075 

Northeastern share at first inquiry ................................................................................ 0.10 0.00 688,682 

Midwestern share at first inquiry .................................................................................. 0.19 0.00 688,682 

Southern share at first inquiry ...................................................................................... 0.54 1.00 688,682 

Western share at first inquiry ....................................................................................... 0.16 0.00 688,682 

Table 6 provides summary statistics at 

the consumer level, using the first 

observation for each consumer observed 

in the inquiry dataset. On average, a 

consumer in the over-$500 sample 

experiences 2.24 medical collections 

that appear within 180 days of an 

inquiry. These medical collections are, 

on average, approximately 20 months 

apart from the earliest to the latest 

reported. Nineteen percent of the 

consumers in the sample do not have a 

credit score in the month before their 

first inclusion in the sample; for 

consumers who do have a credit score, 

it is most often subprime.389 More than 

60 percent of consumers in the sample 

are located in Southern States, reflecting 

the disproportionate share of consumers 

with medical debt in the South 

documented in prior research.390 These 

summary statistics support the 

generalizability of the results, as the 

sample of consumers is generally 

similar to the overall population of 

consumers with medical collections 

during this time period.391

One debt collector commenter stated 

that the CFPB should have instead 

considered all inquiries associated with 

medical collections over $500 instead of 

making the restriction, in the proposed 

rule, that these inquiries are not made 

when a medical collection under $500 

is included on the consumer report. The 

CFPB chose not to change its 

construction of the over-$500 subsample 

because the relevant question is how 

inquiries would be evaluated under the 

rule, relative to the baseline, in which 

no medical collections under $500 are 

included on consumer reports. The 

over-$500 sample, as initially 

constructed, is the closest 

approximation for estimating the effects 

of the rule. Results are included for the 

full sample to show that the estimated 

effects are broadly similar for all 

inquiries associated with medical 

collections of any size. Furthermore, the 

summary statistics for consumers in the 

full sample are similar to those for the 

over-$500 sample, but consumers in the 

over-$500 have nearly two fewer 

medical collections reported within 180 

days of an inquiry in the sample. 

Though this at first may seem 

counterintuitive, this is because 

consumers with several medical 

collections often have at least one 

medical collection under $500 which 

removes them from the over-$500 

subsample. 


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392 Guido W. Imbens & Thomas Lemieux, 

Regression discontinuity designs: A guide to 

practice, 142(2) J. Econometrics, at 615–35 (Feb. 

2008), https://www.sciencedirect.com/science/ 

article/abs/pii/S0304407607001091. 

393See Yoav Benjamini & Yosef Hochberg, 

Controlling the False Discovery Rate: A Practical 

and Powerful Approach to Multiple Testing, 57(1) 

J. of the Royal Stat. Soc’y Series B (Methodological), 

at 289–300 (1995), http://www.jstor.org/stable/ 

2346101. 

394Catherine Hausman & David S. Rapson, 

Regression Discontinuity in Time: Considerations 

for Empirical Applications, 10 Ann. Rev. of Res. 

Econ. (2018), https://www.annualreviews.org/ 

content/journals/10.1146/annurev-resource-121517- 

033306. 

395Specifically, the regressions are estimated 

using the Stata package rdrobust, implemented with 

a triangular kernel, a common mean-square-erroroptimal bandwidth selector, and adjustments for 

mass points. Sebastian Calonico et al., rdrobust: 

Software for regression-discontinuity designs, 17:2 

Stata J. (2017), https://rdpackages.github.io/ 

Continued 

6. Empirical Strategy

The CFPB used a regression

discontinuity in time (RDiT) design to 

estimate the effect of reported medical 

collections on consumers’ access to 

credit and the performance of credit 

account tradelines resulting from 

creditors’ inquiries. Regression 

discontinuity is a quasi-experimental 

design that, under certain assumptions, 

allows estimation of the causal effect of 

a treatment or intervention where a 

treatment is assigned by a threshold 

value of that variable.392 In the present 

context, inquiries are ‘‘treated’’ when a 

medical collection tradeline is added to 

the NCRA’s database. The date that a 

medical collection is added to a 

consumer report is the ‘‘threshold’’ that 

potentially creates a discontinuous 

effect on the studied dependent 

variables: inquiry success and two-year 

serious delinquency. Before this date, 

creditors cannot observe the medical 

collection on the consumer report at the 

time an inquiry is made, but the CFPB 

can observe using the CCIP that the 

consumer did have a medical debt in 

collections that would eventually be 

reported. The proximity of each inquiry 

to the threshold, referred to as the 

‘‘running variable’’ in regression 

discontinuity terminology, is equal to 

the number of days between the date 

that the collection was first included on 

the consumer report and the date that 

the inquiry was made. When the inquiry 

date occurred after the medical 

collection reported date (or in other 

words, the medical collection was 

included on the consumer report before 

the inquiry was made), this running 

variable is greater than or equal to the 

‘‘threshold’’ zero; for values less than or 

equal to zero, the medical collection 

was not included on the consumer 

report when the inquiry was made. The 

key assumption of a regression 

discontinuity analysis is that nothing is 

changing discontinuously across the 

threshold besides the treatment. 

To analyze inquiry success, the CFPB 

estimated Equation 1 using the inquiry 

dataset: 

Yijk = a + gDijk + bZijk + dDijk × Zijk + 

eijk (1) 

Where i is a consumer, j is an inquiry, 

and k is the medical collection 

associated with the inquiry. Yijk is a 

binary variable equal to one if the 

inquiry is successful, i.e., if a tradeline 

is originated within 14 days for a credit 

card or auto loan, 120 days for a 

mortgage, or 30 days for other loans. Dijk

is the running variable, i.e., the number 

of days after medical collection k was 

added to the consumer report that 

inquiry j was made. Dijk is negative if the 

inquiry was made before the medical 

collection was added, and positive if the 

inquiry was made after. Zijk is a binary 

variable equal to one if the inquiry j was 

made after the date when collection k 

was reported. The coefficient of interest, 

b, represents the difference in the 

likelihood that an inquiry is successful 

for inquiries made after a medical 

collection is added, relative to inquiries 

made before. The intercept a allows 

estimation of a more flexible linear 

form. 

The CFPB also estimated Equation 1 

for the performance dataset, using the 

two-year performance of tradelines that 

can be traced to an inquiry included in 

the inquiry dataset as the dependent 

variable. The estimating equation is 

largely unchanged, though j is 

interpreted as a tradeline associated 

with an inquiry in the inquiry dataset 

(rather than the inquiry itself), and Yijk

is a binary variable equal to one if the 

account is at least 90 days delinquent on 

the tradeline at any point within the 

first two years after the tradeline is 

originated (rather than if the inquiry is 

associated with a tradeline origination, 

as in the inquiry dataset regression). 

In the results described below, the 

CFPB estimated six specifications to 

estimate impacts on inquiry success and 

account performance. The first 

specification is limited to the over-$500 

sample, as defined above. The second 

and third specifications separate the 

over-$500 sample into two groups: 

inquiries that were made when the 

consumer had no nonmedical 

collections on their consumer report, 

and inquiries made when consumers 

had nonmedical collections on their 

consumer report. These specifications 

test whether reported medical 

collections affect inquiry success and 

better predict account performance for 

consumers with fewer other signals of 

negative information. The hypothesis is 

that the effects of a reported medical 

collection should be larger for inquiries 

made without nonmedical collections 

on the consumer report. If a consumer 

already has nonmedical collections, the 

appearance of a medical collection 

likely implies a smaller marginal change 

in expected delinquency risk. Finally, 

the CFPB then estimated each of these 

three specifications for all inquiries in 

the sample. 

The CFPB only reports its estimates of 

the parameter β, which provides the 

effect of medical collection furnishing 

on inquiry success and account 

performance. Combined across the main 

results and balance tests described later, 

the CFPB estimated a total of 192 β

coefficients, so the reported standard 

errors were adjusted using the 

Benjamini-Hochberg procedure, a 

method for accounting for multiple 

comparisons (under which it is more 

likely to find a statistically significant 

result by chance than in a one-off 

analysis).393

To justify the robustness of the main 

specification, the CFPB considers the 

potential threats to identification that 

can arise from RDiT specifications. 

RDiT varies from a standard regression 

discontinuity design because the 

running variable is not generally 

continuous. As summarized by an 

academic paper, RDiT designs can be 

biased if observations far from the 

threshold time period are used for 

identification, as there may be 

autoregressive properties or 

unobservable confounders.394 This is 

often required in RDiT designs that have 

little cross-sectional variation, as the 

sample size can only grow by adding 

observations further from the threshold, 

rather than by adding additional crosssectional units. A researcher commenter 

cited this concern in their critique of the 

CFPB’s analysis. However, the data 

underlying the analysis discussed in 

this document contains ample crosssectional variation, with 663,678 unique 

inquiries in the inquiry dataset and 

401,027 unique tradelines in the 

performance dataset for the over-$500 

sample. Furthermore, the analysis 

considers observations that are no more 

than 180 days from the threshold, 

minimizing the extent of possible 

autoregression. 

In addition to these features of the 

datasets that limit the potential for bias 

arising from the RDiT design, the CFPB 

estimates the regressions using 

econometric best practices as 

implemented by a practitioner software 

package.395 Standard errors are 


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references/Calonico-Cattaneo-Farrell-Titiunik_

2017_Stata.pdf. 

clustered by consumer to account for 

correlation within consumer 

observations over time. Additionally, 

the CFPB conducted several robustness 

checks to support the validity of the 

main design, described in detail after 

the discussion of the main results. 

A researcher commenter stated that a 

consumer may take steps to improve 

their credit profile near the threshold 

time period, introducing bias into the 

model if the effects of these changes are 

erroneously attributed to the medical 

collection report. The CFPB finds it 

implausible that a consumer would 

choose to improve markers of their 

financial wellbeing over the short 

amount of time near the appearance of 

a medical collection on their consumer 

report. It estimates balance tests to test 

for this phenomenon in Tables 9 and 10 

and finds no supporting evidence. Even 

if a consumer did improve their credit 

profile near the date that the medical 

collection is added to their consumer 

report, this would only attenuate 

results, as consumers with reported 

medical collections would look like 

better risks than they would absent this 

behavior. This would shrink the 

difference, from a creditor’s perspective, 

between consumers with reported and 

unreported medical collections. 

One researcher commenter stated that 

the CFPB should not have included the 

Dijk × Zijk term in its regression equation 

because it is highly correlated with 

other variables in the regression 

equation, leading to multicollinearity 

bias. In fact this term, which is standard 

in RDiT equations, does not lead to 

multicollinearity bias and instead 

increases the precision of the estimated 

parameters. The term allows the 

relationship between the running 

variable and the outcome variable to 

change across the reporting threshold. 

Because some medical collections 

appear on a consumer report for fewer 

than 180 days, the slope between the 

running variable Dijk and inquiry 

success Yijk may be positive for positive 

values of Dijk because inquiries made 

farther from the medical collection 

report date are less likely to occur when 

the medical collection appears on the 

consumer report, likely leading to a 

greater likelihood of inquiry success. 

There is no similar expectation of a 

positive relationship in the 180 days 

before the medical collection is 

reported, i.e., for negative values of Dijk. 

The estimated parameter g would 

conflate these two relationships if the 

interaction term is omitted from the 

regression equation. 

A researcher commenter stated that 

the CFPB should have considered more 

heterogeneity between groups in the 

Technical Appendix of the proposed 

rule, such as a consumer’s age, their 

number of medical collections, and 

whether their medical collection has 

been disputed. While specific effects on 

these groups may be of general interest, 

the rule is not limited to certain 

subpopulations or types of medical 

collections, so the parameter of primary 

interest to the CFPB is the average effect 

taken over the entire population that has 

medical collections over $500, which 

mimics the current reporting 

environment. 

One researcher commenter stated that 

the CFPB did not provide measures that 

can be used to assess model quality, 

primarily concerning a hypothetical in 

which consumers far from the 

regression discontinuity threshold 

receive too much weight in the analysis. 

The CFPB included just 180 days before 

and after the threshold to mitigate this 

concern, as well as using econometric 

best practices in its regression equation 

as described above. The commenter did 

not describe specific, actionable 

examples of the measures that would 

assuage their concern. 

One NCRA commenter stated that the 

CFPB should have studied differences 

between consumers with medical 

collections and consumers without 

medical collections in the Technical 

Appendix of the proposed rule instead 

of limiting its focus to consumers with 

reported and unreported medical 

collections. The commenter stated that 

it was important to distinguish between 

consumers with and without medical 

collections because these groups have 

different payment performance. 

The CFPB does not agree that a 

comparison between all consumers with 

medical collections and all consumers 

without medical collections is relevant 

to understanding the impacts of the 

rule. Although consumers with medical 

collections may have a different 

delinquency risk than consumers 

without medical collections, the rule 

will not change which consumers have 

outstanding medical collections. The 

rule instead changes whether medical 

collections appear on a consumer report 

that a creditor receives for the purpose 

of a credit eligibility determination. The 

analysis discussed in this part considers 

whether creditors use medical 

collection information that appears on a 

consumer report to deny consumers 

with medical collections access to credit 

and limit their delinquency risk. This 

provides the closest understanding of 

the environment that would be created 

by the rule: consumers with reported 

medical collections are like the baseline 

while consumers with unreported 

medical collections are like the postrule environment, and the CFPB’s 

analysis compares them. 

A researcher commenter stated that 

the CFPB should have used propensity 

score matching instead of a RDiT 

approach in the Technical Appendix of 

the proposed rule. The commenter 

suggested a design that would compare 

consumers with ‘‘hidden’’ medical 

debts, or consumers in the 180 days 

before their medical collection is added 

to their consumer report, to similar 

consumers without medical debt on 

their consumer reports. 

The CFPB does not agree that a 

propensity score matching approach as 

suggested by the commenter would be 

appropriate. The CFPB could control for 

information included on consumer 

reports, but not unobservable variables 

like outstanding medical debt, as most 

medical debt is not included on 

consumer reports. Therefore, the 

consumers with hidden medical debt 

would be compared to consumers who, 

for the most part, do not have medical 

debt. Differences between these groups 

would not be related to the inclusion of 

a medical collection on consumer 

reports but would instead be driven by 

the presence of medical debt. This 

analysis would not be as relevant to the 

rule as the CFPB’s analysis. 

7. Results on Inquiry Success

The CFPB first uses the inquiry

dataset to consider how medical 

collection reporting affects inquiry 

success. Importantly, an unsuccessful 

inquiry does not necessarily imply that 

the lender denied the credit application. 

Consumers may be approved for credit 

with worse terms than they would have 

received absent medical collection 

reporting and decline the offer of credit 

as a result, or consumers may choose 

not to take up approved credit for 

idiosyncratic reasons. The CCIP does 

not include data on the terms of 

originated accounts or on credit 

approvals that do not lead to originated 

accounts. However, this is less likely to 

be an issue with credit cards because 

the CFPB understands that credit card 

accounts are generally issued 

automatically if the creditor approves an 

application, with little opportunity for a 

consumer to decline. The CFPB assumes 

that consumers’ underlying demand for 

credit is unaffected by medical 

collection reporting, so changes in 

inquiry success across the reporting 

threshold can be attributed to creditors’ 

denial of credit account applications or 

provision of worse terms, rather than 


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396The table provides the regression 

discontinuity estimates for the inquiry dataset, 

separately by credit account type. Each coefficient 

(RD Estimate) estimates a percentage point effect of 

having an additional medical collection reported on 

inquiry success. These effects can be represented as 

percent changes by comparing to the baseline ‘‘Avg. 

success’’, which is calculated as the success rate of 

all inquiries made to the left of the regression 

discontinuity threshold (or without medical 

collection reporting). Column 1 limits the sample to 

inquiries associated with medical collection 

tradelines over $500 made when the consumer had 

no medical collection tradelines under $500 on 

their consumer report, which is then subset into 

Columns 2 and 3. Column 2 limits the sample to 

inquiries made when the consumer did not have a 

nonmedical collection tradeline (NMC) on their 

consumer report; Column 3, when consumers did 

have a nonmedical collection tradeline on their 

consumer report. Column 4 includes the full 

sample. Columns 5 and 6 are defined equivalently 

to Columns 2 and 3 for the full sample. Standard 

errors are clustered by consumer and adjusted using 

the Benjamini-Hochberg procedure. 

397A thin credit file is a consumer report that 

contains fewer than five credit accounts. Jennifer 

White, Experian, What is a Thin Credit File? (May 

25, 2022), https://www.experian.com/blogs/askexperian/what-is-a-thin-credit-file-and-how-will-itimpact-your-life/. 

398Consumers with credit scores below 500 may 

not be approved for a mortgage but can usually 

access secured credit cards. Louis DeNicola, 

Experian, How to Buy a House with Bad Credit (Oct. 

7, 2023), https://www.experian.com/blogs/askexperian/how-to-get-a-home-loan-with-bad-credit/; 

Consumer Fin. Prot. Bureau, How to rebuild your 

credit (July 2020), https://

files.consumerfinance.gov/f/documents/cfpb_howto-rebuild-your-credit.pdf. 

changes in who applies. The CFPB 

justifies this assumption below. 

TABLE 7—THE EFFECT OF MEDICAL COLLECTION REPORTING ON INQUIRY SUCCESS 396

(1) 

Over $500 

(2) 

Over $500, 

no NMC 

(3) 

Over $500, 

NMC 

(4) 

All 

(5) 

No NMC 

(6) 

NMC 

Panel A: Credit cards: 

RD Estimate ....................... ***¥0.047 ***¥0.072 ***¥0.029 ***¥0.033 ***¥0.049 ***¥0.022 

(0.006) (0.009) (0.006) (0.003) (0.005) (0.003) 

[¥0.059, ¥0.036] [¥0.090, ¥0.055] [¥0.041, ¥0.018] [¥0.038, ¥0.027] [¥0.059, ¥0.040] [¥0.028, ¥0.017] 

Avg. success ...................... 0.294 0.381 0.222 0.275 0.364 0.214 

Observations ...................... 601,230 267,276 333,954 3,026,355 1,233,571 1,792,784 

Panel B: Mortgages: 

RD Estimate ....................... *¥0.026 *¥0.040 ¥0.003 ¥0.014 ¥0.013 ¥0.005 

(0.012) (0.018) (0.012) (0.009) (0.015) (0.006) 

[¥0.049, ¥0.004] [¥0.074, ¥0.006] [¥0.027, 0.022] [¥0.031, 0.004] [¥0.043, 0.017] [¥0.016, 0.006] 

Avg. success ...................... 0.186 0.248 0.098 0.167 0.235 0.089 

Observations ...................... 79,372 46,003 33,369 439,685 237,413 202,272 

Panel C: Other credit accounts: 

RD Estimate ....................... *¥0.014 *¥0.020 ¥0.010 ***¥0.015 ***¥0.024 **¥0.010 

(0.006) (0.009) (0.007) (0.003) (0.005) (0.004) 

[¥0.026, ¥0.003] [¥0.038, ¥0.002] [¥0.024, 0.004] [¥0.021, ¥0.009] [¥0.033, ¥0.015] [¥0.017, ¥0.003] 

Avg. success ...................... 0.242 0.307 0.197 0.246 0.316 0.205 

Observations ...................... 469,290 190,942 278,348 2,484,030 908,849 1,575,181 

Standard errors in parentheses, 95 percent confidence intervals in brackets. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 

Table 7 provides the results of the 

main regression discontinuity analysis 

on inquiry success. Each panel 

represents a different loan type, as 

products generally have different 

underwriting procedures. At a high 

level, several summary observations can 

be made. First, just over half of the 

inquiries in the full sample of the 

inquiry dataset are for credit cards. Only 

7.4 percent of the inquiries in this 

sample are for mortgages, compared to 

almost 17 percent of all inquiries in the 

CCIP. This likely reflects the fact that 

most consumers in the sample have thin 

credit files 397 and subprime credit 

scores, and therefore may be less likely 

to apply for mortgages than for other 

types of credit, given the higher 

underwriting standards of mortgages.398

Inquiry success rates are higher for all 

loan types when inquiries are made 

without nonmedical collection 

tradelines on the consumer report than 

when nonmedical collection tradelines 

are present, with differences as large as 

15.9 percentage points. This is expected 

because consumers with less negative 

information on their consumer reports 

are more likely to be approved for credit 

or receive favorable terms. Perhaps less 

intuitively, average success rates for 

credit cards and mortgages are also 

generally higher for the subsample of 

inquiries made by consumers who only 

have medical collection tradelines over 

$500, if they have any. As discussed 

above, inquiries made by consumers 

with many medical collection tradelines 

are often excluded from the over-$500 

sample because at least one of those 

medical collection tradelines is under 

$500. The average number of medical 

collection tradelines on a consumer 

report when an inquiry is made in the 

full sample, in Column 4, across all loan 

types, is 5.03. Conversely, the average 

number of medical collection tradelines 

on a consumer report when an inquiry 

is made, for inquiries made with all 

medical collection tradelines greater 

than $500, in Column 1 is 1.08. Thus, 

the over-$500 sample is positively 

selected, i.e., consumers in this sample 

have less negative information than 

consumers in the full sample, at least as 

measured by the number of medical 

collection tradelines present on their 

consumer reports. Despite the positive 

selection into the over-$500 sample, the 

CFPB expects these results to most 

closely represent the effects of removing 

all medical collection tradelines from 

consumer reports given the parallel with 

the NCRAs’ current practice for under- 

$500 medical collection tradelines. 

Turning to the regression estimates in 

Table 7, Column 1 of Panel A (credit 

cards) shows that a medical collection 

being reported causes a 4.7 percentage 

point decline in the likelihood of 

inquiry success for the over-$500 

sample. This represents a 16.0 percent 

decline from relative to the average 

success rate for inquiries to the left of 

the regression discontinuity threshold 

(i.e., inquiries made before the medical 

collection was reported). The effect is 

larger in absolute value for inquiries 

made when the consumer had no 

nonmedical collection tradelines on 

their consumer report, shown in 

Column 2, than when consumers had 

nonmedical collection tradelines on 

their consumer report, shown in 

Column 3. This supports the hypothesis 

that medical collection reporting has a 

larger effect on consumers without 

outstanding nonmedical collections. 

Columns 4 through 6 repeat the groups 

from Columns 1 through 3 but include 

the full sample. The regression result 

shown in Column 4 of Panel A describes 

a 3.3 percentage point, or 12.0 percent, 


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399That is, given the variability in the data, if 

medical collections had no effect on inquiry 

success, one would expect an estimate as large as 

those show in Columns 1 and 2 less than 10 percent 

of the time, but more than 5 percent of the time, 

through chance alone. 

400The confidence intervals provided in brackets 

in the tables contain the true value of the parameter 

being estimated with 95 percent confidence, i.e., if 

the CFPB had sufficient data to run this regression 

with 100 different samples, and estimated 100 

different confidence intervals, one would expect 95 

of these confidence intervals would contain the true 

value of the parameter. Therefore, the CFPB can 

reject coefficients outside of the bounds of its 

estimated confidence intervals as unlikely to be 

consistent with the true effect of medical 

collections reporting on inquiry success with 95 

percent confidence. 

401The table provides the regression 

discontinuity estimates for the performance dataset, 

separately by credit account type. The results 

estimate effects on two-year 90-day delinquency 

rate for all accounts originated from a successful 

inquiry in the inquiry dataset. Each coefficient (RD 

Estimate) estimates a percentage point effect of 

having an additional medical collection reported on 

inquiry success. These effects can be represented as 

percent changes using the baseline ‘‘Avg. D90+’’, 

which is calculated as the 90-day delinquency rate 

of all inquiries made to the left of the regression 

discontinuity threshold (or without medical 

collection reporting). Column 1 limits the sample to 

inquiries associated with medical collection 

tradelines over $500 made when the consumer had 

no medical collection tradelines under $500 on 

their consumer report, which is then subset into 

Columns 2 and 3. Column 2 limits the sample to 

inquiries made when the consumer did not have a 

nonmedical collection tradeline (NMC) on their 

consumer report; Column 3, when consumers did 

have a nonmedical collection tradeline on their 

consumer report. Column 4 includes the full 

sample. Columns 5 and 6 are defined equivalently 

to Columns 2 and 3 for the full sample. 

decline in inquiry success for inquiries 

made with these larger medical 

collections reported relative to inquiries 

made without these medical collections 

reported. Again, effects are larger in 

absolute value for inquiries made when 

consumers did not have nonmedical 

collection tradelines on their consumer 

report than when nonmedical collection 

tradelines were present. 

The first three Columns of Panel B 

(mortgages) find relatively small and no 

more than marginally significant effects 

of medical collection reporting on 

mortgage inquiry success. Medical 

collection reporting reduces mortgage 

inquiry success by 2.6 percentage 

points, or 14.0 percent of its baseline 

level. The effect appears to be driven by 

inquiries made when there were no 

nonmedical collection tradelines on the 

consumer report, as the coefficient in 

Column 3 is statistically insignificant 

and small. However, the estimates in 

Columns 1 and 2 are only statistically 

significant at the 10 percent level.399 All 

estimates for the full sample in Columns 

4 through 6 are statistically 

insignificant. Using the 95 percent 

confidence interval for the coefficient in 

Column 4 of Panel B, it is possible to 

reject effects larger than a 3.1 percentage 

point, or 18.6 percent, decline in 

inquiry success for the full sample.400

Panel C provides results for all other 

types of credit accounts. The estimated 

effects are all smaller in magnitude than 

the results for credit cards and vary in 

statistical significance. The coefficients 

imply that medical collection reporting 

causes a 1.4 percentage point decline in 

the likelihood of inquiry success for 

non-mortgage and non-credit-card credit 

accounts for the over-$500 sample, or a 

5.8 percent decline from the baseline 

inquiry success rate. Estimated effects 

are similar for the full sample. As with 

the effects on credit cards and mortgage 

inquiries, effects for both samples are 

larger for consumers without 

nonmedical collection tradelines. 

8. Results on Account Performance 

The estimated effects on inquiry 

success show that the underwriting 

procedures for many credit types 

penalize consumers for having medical 

collection tradelines on their consumer 

reports, with generally larger effects for 

consumers with medical collection 

tradelines over $500. The CFPB next 

considered whether this use of medical 

collection tradelines protects creditors 

from delinquency risk. If creditors use 

medical collection information to 

accurately predict whether consumers 

have high delinquency risk and deny 

their applications, then originated 

accounts resulting from a successful 

inquiry for a consumer with an 

unreported medical collection at the 

time of the inquiry would be more likely 

to be seriously delinquent than those 

resulting from a successful inquiry for a 

consumer with a reported medical 

collection. However, to the extent that 

creditors provide worse credit terms to 

consumers with reported medical 

collections and such worse credit terms 

increase the likelihood of serious 

delinquency, one might expect the 

opposite: Originated accounts resulting 

from an inquiry for a consumer with an 

unreported medical collection could be 

less likely to be seriously delinquent 

(because they received more affordable 

credit terms) than those resulting from 

an inquiry for a consumer with a 

reported medical collection (because 

they received worse credit terms). These 

opposing effects make it impossible to 

determine how the underlying 

delinquency risk of consumers with and 

without unreported medical collections 

varies. However, the results of this 

analysis are still informative as to how 

two-year delinquency rates are affected 

by medical collection reporting, net of 

the effects of application denials and the 

provision of worse terms. 

TABLE 8—THE EFFECT OF MEDICAL COLLECTION REPORTING ON TWO-YEAR CREDIT ACCOUNT PERFORMANCE 401

(1) 

Over $500 

(2) 

Over $500, 

no NMC 

(3) 

Over $500, 

NMC 

(4) 

All 

(5) 

No NMC 

(6) 

NMC 

Panel A: Credit cards: 

RD Estimate ....................... ¥0.000 0.002 ¥0.003 0.002 0.004 ¥0.005 

(0.012) (0.014) (0.021) (0.006) (0.007) (0.008) 

[¥0.023, 0.023] [¥0.026, 0.031] [¥0.045, 0.038] [¥0.009, 0.013] [¥0.010, 0.018] [¥0.021, 0.011] 

Avg. D90+ .......................... 0.231 0.190 0.293 0.223 0.171 0.284 

Observations ...................... 96,297 56,423 39,874 565,680 305,980 259,700 

Panel B: Mortgages: 

RD Estimate ....................... ¥0.011 ¥0.021 0.033 0.004 ¥0.006 0.034 

(0.014) (0.014) (0.034) (0.007) (0.006) (0.019) 

[¥0.039, 0.017] [¥0.049, 0.007] [¥0.033, 0.100] [¥0.009, 0.017] [¥0.018, 0.007] [¥0.003, 0.071] 

Avg. D90+ .......................... 0.035 0.025 0.069 0.038 0.029 0.065 

Observations ...................... 10,177 7,944 2,233 56,976 43,106 13,870 

Panel C: Other credit accounts: 

RD Estimate ....................... ¥0.012 ¥0.011 ¥0.009 ¥0.001 ¥0.002 ¥0.002 

(0.014) (0.015) (0.021) (0.006) (0.006) (0.009) 

[¥0.040, 0.015] [¥0.041, 0.019] [¥0.050, 0.033] [¥0.012, 0.011] [¥0.014, 0.011] [¥0.019, 0.016] 

Avg. D90+ .......................... 0.182 0.135 0.235 0.171 0.120 0.216 

Observations ...................... 71,760 36,951 34,809 459,094 213,481 245,613 

Standard errors in parentheses, 95 percent confidence intervals in brackets. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 


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Table 8 shows the results of the main 

regression discontinuity analysis in the 

performance dataset. Across all loan 

types and subsamples, the estimated 

effects of medical collection reporting 

on serious delinquency are small and 

statistically insignificant. Column 1 of 

Panel A shows that, in the over-$500 

sample, the CFPB can reject effects 

larger in absolute value than 2.3 

percentage points, or 10.0 percent of the 

baseline delinquency rate, with 95 

percent confidence. That is, it would be 

highly unlikely to find an estimate as 

small as what is reported in Table 8 

through chance alone if having an 

unreported medical collection was 

associated with an increase in the rate 

of serious delinquency by 10 percent or 

more. The confidence interval is tighter 

and the central estimate more positive 

(i.e., unreported medical collections 

associated with less delinquency) for 

inquiries made when consumers did not 

have nonmedical collection tradelines 

on their consumer report than when 

these collection tradelines were present. 

This means that the true effects for 

inquiries made without nonmedical 

collection tradelines are more likely to 

be positive. Further, if there is a 

difference in delinquency rate for 

consumers with unreported medical 

collections, these consumers are less 

likely to be delinquent than consumers 

with reported medical collections. This 

also holds for the full subsample in 

Columns 4 through 6. 

These results broadly find that credit 

card lenders use medical collection 

information in underwriting, but do not 

reduce their two-year serious 

delinquency risk for originated credit 

account tradelines by doing so. Fewer 

accounts are originated to consumers 

with reported medical collections, but 

those that are originated are no less 

likely to be delinquent than accounts 

originated to consumers with 

unreported medical collections. This 

suggests that removing medical 

collections information from credit card 

underwriting would increase access to 

credit without negatively impacting the 

likelihood of serious delinquency for 

consumers with medical collections, all 

else equal. 

The results in Panel B show 

qualitatively similar estimates for 

mortgages, but with less precisely 

estimated effects. The effects are less 

precise because the average serious 

delinquency rate is much lower for 

mortgages than for credit cards: only 3.5 

percent of mortgages in the over-$500 

sample are seriously delinquent within 

two years, compared to 23.1 percent of 

credit cards. The lower frequency in the 

dependent variable as well as the 

smaller sample size will naturally lead 

to wider confidence intervals. Column 1 

shows that the CFPB can only reject 

marginal reductions in mortgage 

delinquency rates with reported medical 

collections that are larger in absolute 

value than 3.9 percentage points, or 

111.4 percent of the baseline 

delinquency rate, with 95 percent 

confidence. For the full sample, the 

CFPB can reject marginal reductions 

larger in absolute value than 0.9 

percentage points, or 23.7 percent of 

baseline delinquency rate. Though these 

results are too imprecise to allow the 

rejection of large effects, their statistical 

insignificance can be interpreted as 

suggestive that removing larger medical 

collection tradelines from mortgage 

underwriting would not cause increases 

in serious delinquency risk. 

As for credit cards, the results for 

non-mortgage and non-credit-card 

accounts, shown in Table 8, are mostly 

statistically insignificant and small in 

magnitude. Again, the CFPB concludes 

that the use of medical collections 

information in underwriting does not 

reduce the delinquency risk of accounts 

originated to people with reported 

medical collections. 

These results suggest that, absent 

consumer reporting of medical 

collections, the additional credit 

accounts that creditors provide to 

consumers whose medical collections 

would no longer be reported would be 

no more likely to be delinquent than the 

credit accounts creditors provide at 

baseline. In line with economic theory, 

the CFPB expects that creditors only 

provide credit if the account’s expected 

profit is positive. Under this 

expectation, creditors would not 

provide accounts to consumers with 

unreported medical collections at 

baseline if they were not profitable. 

However, it is possible that creditors 

currently provide those accounts not 

because they are profitable, but because 

they have no other mechanism for 

identifying and either denying the credit 

applications of, or changing the terms 

provided to, applicants with unreported 

medical collections. In this case, the 

rule would reduce profit for creditors by 

increasing the number of unprofitable 

loans in their portfolio. 

The CFPB illustrates this concern 

with a simple example. Suppose that a 

creditor’s applicant pool is equally 

divided across three nonoverlapping 

groups of consumers, which are 

identical in all attributes except for the 

presence of collections and delinquency 

risk. Assume that applicants with no 

collections have a delinquency risk of 1 

percent and applicants with medical 

collections have a delinquency risk of 

1.25 percent. Suppose for simplicity 

that a lender seeks to minimize their 

delinquency risk and is unwilling to 

provide loans if the expected 

delinquency rate is 1.2 percent or 

higher. If half of consumers with 

medical collections (or one-sixth of the 

total population) have those medical 

collections included on their consumer 

report at baseline, the lender provides 

loans to consumers with no collections 

and those with unreported medical 

collections, for an overall delinquency 

risk of 1.08 percent. If no medical 

collections were included on consumer 

reports, creditors would provide 

accounts to all consumers with no 

collections and with medical 

collections, for an overall delinquency 

risk of 1.13 percent. 

Under this line of reasoning, the 

above results related to account 

performance would be unrelated to the 

consequences of the rule. It would be 

unsurprising that consumers with 

reported medical collections have the 

same underlying delinquency risk as 

consumers with unreported medical 

collections, because in the example 

delinquency risk is determined by the 

medical collection itself, and not as a 

consequence of consumer reporting. 

Instead, the relevant question would be 

whether consumers with medical 

collections have a higher delinquency 

risk than consumers without medical 

collections, holding all else equal. 

However, this example presupposes 

that delinquency risk is an inherent 

quality of consumers, rather than in part 

determined by the terms of credit 

extended to consumers. The dollar 

amounts and interest rates impact the 

likelihood of delinquency, as well as 

creditor revenue. These levers remain 

available to creditors under the rule and 

can be used to attenuate reductions in 

revenue that result from any increases 

in delinquency risk. Indeed, unlike in 

this simple example, the performance 

results in Table 8 show that creditors 

willingly provide accounts to people 

with reported medical collections at 

baseline. This requires that there exist 

terms for which credit accounts can be 

profitably, on expectation, provided to 

consumers with medical collections. 

Because creditors will not be able to 

differentiate between consumers with 

and without medical collections using 

information provided on consumer 

reports under the rule, any changes in 

terms of credit under the rule may 

impact all consumers, not just those 

with medical collections. 

Furthermore, if the credit extended to 

consumers with unreported medical 

collections were unprofitable at the prerule baseline, the CFPB expects that 


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402E.g., Fannie Mae, Uniform Residential Loan 

Application (Form 1003), https://

singlefamily.fanniemae.com/delivering/uniformmortgage-data-program/uniform-residential-loanapplication (last visited Nov. 25, 2024). 

creditors could request this information 

on credit applications to ensure they do 

not provide loans to these applicants or 

provide different terms. Credit 

applications commonly request 

information from consumers that may 

not be available on their consumer 

reports, such as their employment status 

or income. Given the relatively small 

share of medical debt that is included 

on consumer reports, creditors could 

request this information from 

consumers directly if it were a key 

determinant of account profitability. At 

baseline, however, mortgage creditor 

applications, for example, ordinarily do 

not specifically request medical 

information. 

A researcher commenter described 

these results in the proposed rule, 

equivalent to Table 8, as showing that 

not having nonmedical debt, including 

products like student loans and auto 

loans, leads to higher rates of 

delinquency than having a product like 

a credit card. The commenter stated that 

these results suggested a problem with 

the CFPB’s methodology for the 

Technical Appendix overall, as one 

would expect nonmedical debt to be 

associated with a greater rate of 

delinquency. 

While the CFPB agrees with the 

general principle that counterintuitive 

results of any statistical analysis may 

warrant additional scrutiny, the 

commenter does not accurately 

characterize the analysis above, and the 

results are not counterintuitive in the 

way the commenter suggests, much less 

indicating a problem with the CFPB’s 

methodology. The CFPB’s analysis does 

not compare delinquency rates between 

consumers with and without 

nonmedical debt in general. Rather, as 

discussed above, the results in Table 8 

include versions with the sample split 

by the presence or absence of 

nonmedical collections tradelines. 

Nonmedical collections are not 

equivalent to nonmedical forms of debt 

such as student loans or auto loans, as 

a debt only goes to collections after it is 

seriously delinquent. Further, 

comparing Columns 2 and 3 or Columns 

5 and 6 shows that credit products 

originated to people with nonmedical 

collections have higher delinquency 

rates, on average, than credit products 

originated to people without 

nonmedical collections, as would be 

expected. 

The researcher commenter also stated 

that the results in the proposed rule 

equivalent to Table 8 showed that there 

was a near-significant impact of 

nonmedical debt on mortgage 

delinquency. Again, this is an 

inaccurate characterization of the 

analysis presented above. The CFPB did 

not estimate the effect of nonmedical 

debt on delinquency at all. Instead, the 

CFPB found one subsample—consumers 

with non-medical collections tradelines 

and medical collections of any dollar 

amount—for which the effect of having 

a medical collections tradeline reported 

on mortgage delinquency is positive and 

close to being statistically significant at 

95 percent. This is shown in Column 6 

of Panel B of Table 8. If the effect were 

estimated with statistical significance, it 

would suggest that consumers with 

reported medical collections in this 

subsample are more likely to become 

seriously delinquent on mortgages. 

Differences in the terms provided to 

consumers with reported and 

unreported medical collections could 

lead to these higher delinquency rates, 

but the CFPB expects that this result is 

more likely attributed to statistical 

noise, given the inconsistency with the 

results from the other subsamples 

studied. 

The CFPB also considered whether to 

compare different credit scoring models, 

constructed with and without medical 

information, as a way to determine how 

well such models predict account 

performance. Such an approach, 

however, would call on the CFPB to 

design its own credit scoring models 

and determine what types and 

magnitude of differences between the 

results of the models were meaningful, 

and may depend more on the 

specifications of the models constructed 

than the actual rate of default in any 

studied population. The CFPB finds its 

regression discontinuity design and 

balance tests a more appropriate and 

reliable measure for how medical 

information improves creditors’ ability 

to minimize their risk of default. The 

results of the CFPB’s analysis of the 

performance of actual accounts indicate 

that creditors who use medical 

information do not reduce risk by doing 

so.402

9. Results Related to Credit Demand and 

Selection 

The results described in the previous 

two subsections suggest that creditors 

use medical collections information in 

their underwriting procedures, but this 

information does not enable them to 

originate accounts that are less likely to 

become seriously delinquent. This 

interpretation of the regression 

discontinuity results relies on the 

identifying assumption discussed above: 

the only difference between the 

inquiries made before and after a 

medical collection tradeline is added to 

a consumer report is the medical 

collection reporting itself, rather than 

that the application delinquency risk 

(quality) is lower for consumers with 

reported medical collections. This 

section discusses evidence supporting 

this identifying assumption. 

Though the analysis benefits from 

ample observations near the threshold, 

as discussed above, RDiT specifications 

may still be affected by anticipation or 

selection effects if cross-sectional 

observations can sort themselves on 

either side of the threshold. In this 

setting, consumers may be less likely to 

apply for credit after a medical 

collection tradeline is added to their 

consumer report. If consumers with 

lower delinquency risk have more 

knowledge about when a medical 

collection tradeline will be added to 

their consumer report, they may be 

more likely to apply for credit 

immediately to the left of the threshold 

(i.e., just before the medical collection 

tradeline is added to the consumer 

report). The CFPB first considered how 

the magnitude of credit demand changes 

across the reporting threshold by 

plotting the number of inquiries made 

in each week relative to the week of the 

medical collection tradeline’s addition 

to the consumer report. 


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403This figure plots the number of inquiries made 

in each week within 180 days of the medical 

collection’s first reported date. The number of 

inquiries is provided as a ratio, relative to the 

number of inquiries made in the week before the 

associated medical collection’s first reported date. 

The first and last week of the 180-day window 

include only six days and are not plotted. 

404See, e.g., Equifax, Equifax Complete TM, 

https://www.equifax.com/personal/products/credit/ 

monitoring-and-reports/ (last visited May 15, 2024). 

405See, e.g., Experian, Collection Triggers SM: 

Monitoring your collections accounts, https://

www.experian.com/business/products/collectiontriggers (last visited May 15, 2024). 406The table includes balance tests for the inquiry 

sample. Panel A limits the sample to inquiries 

associated with a medical collection tradeline over 

$500 and no medical collection tradelines under 

$500 on the consumer report when the inquiry is 

made. Panel B includes the full sample. These 

balance tests estimate Equation 1 using 

characteristics from the consumer’s consumer 

report in the month before the creditor makes an 

inquiry. ‘‘RD Estimate’’ provides the estimate for b 

when the dependent variable is the variable whose 

average is provided. Each column limits the sample 

by inquiry type. ‘‘Any D90+’’ describes whether any 

open or closed account on the consumer report is 

at least 90 days delinquent, and ‘‘tot. past due am.’’ 

describes the total amount past due or charged off 

across all accounts. Standard errors are clustered by 

consumer and adjusted using the BenjaminiHochberg procedure. 

Figure 1: Inquiry Distribution Across 

Weeks 403

Figure 1 plots the number of inquiries 

made in each week relative to the week 

before the date a medical collection 

tradeline was added to a consumer 

report, represented as week zero. For all 

credit account products, credit demand 

is largely stable through the 25 weeks 

before the medical collection is 

reported, but there is an immediate 

reduction in the week that the medical 

collection is reported. Credit demand 

rebounds quickly from this initial drop 

but remains persistently lower for the 25 

weeks after the medical collection is 

reported, only approaching its prereport level by the final considered 

week for credit cards and mortgages. 

Though the reduction in credit demand 

is sharp around the week of the medical 

collection’s first report, it is not large; at 

most, credit demand falls by 8 percent 

of the baseline (for mortgages). 

Any reduction in credit demand 

corresponding to medical collection 

reporting may appear to threaten the 

identifying assumption, which requires 

that applications for credit made by 

consumers with reported medical 

collections only differ from those made 

by consumers whose medical 

collections were not yet reported 

because of the medical collection 

reporting itself, and not because 

application quality differs. However, 

credit demand may fall for reasons that 

do not simultaneously affect credit 

application quality. For example, many 

NCRAs provide credit monitoring 

services that alert a consumer when a 

collection is added to their consumer 

report.404 A consumer who planned to 

apply for credit may no longer do so if 

they are aware of a medical collection 

tradeline’s negative effect on their credit 

score, which would affect their access to 

credit. The causality may also flow in 

the other direction if debt collectors 

track consumer reports and use 

‘‘collection triggers’’ to focus their 

medical collection reporting after 

consumers apply for or open new credit 

accounts.405 These mechanisms cannot 

be observed in the data but could 

explain the observed discontinuous 

decline in credit demand around 

medical collection reporting. 

To estimate if credit application 

quality changes across the threshold, the 

CFPB estimated balance tests using 

Equation 1, where Yijk is equal to one of 

several variables that describe the 

consumer report at the time of the 

inquiry j. This estimates how inquiries 

made with reported medical collections 

differ from inquiries made with 

unreported medical collections. If such 

differences are large in absolute value 

and statistically significant, one might 

be concerned that there are underlying 

differences in the types of credit 

applications made when medical 

collections are reported that could be 

driving the regression discontinuity 

results, instead of the medical collection 

reporting itself. Finding small or 

imprecise coefficients would support 

the identifying assumption that the only 

difference in inquiries across the 

regression discontinuity threshold is the 

addition of a medical collection 

tradeline to the consumer report. 

TABLE 9—INQUIRY BALANCE TESTS 406

(1) 

Credit card 

(2) 

Mortgage 

(3) 

Other credit 

accounts 

Panel A: Over $500 sample: 

RD Estimate ................................................................................................................... 0.117 0.257 0.118 

(0.172) (0.464) (0.172) 

Avg. consumer age ........................................................................................................ 39.295 41.430 38.637 

RD Estimate ................................................................................................................... **¥3.208 4.034 ¥0.540 


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TABLE 9—INQUIRY BALANCE TESTS 406—Continued 

(1) 

Credit card 

(2) 

Mortgage 

(3) 

Other credit 

accounts 

(1.192) (3.572) (1.255) 

Avg. credit score ............................................................................................................. 576.254 617.565 569.366 

RD Estimate ................................................................................................................... ** 0.012 ¥0.001 0.008 

(0.005) (0.009) (0.005) 

Avg. missing credit score ............................................................................................... 0.197 0.074 0.151 

RD Estimate ................................................................................................................... 0.032 0.050 0.026 

(0.035) (0.115) (0.039) 

Avg. num. open loans .................................................................................................... 1.328 1.997 1.275 

RD Estimate ................................................................................................................... ¥0.001 ¥0.010 ¥0.008 

(0.005) (0.012) (0.006) 

Avg. any D90+ ................................................................................................................ 0.265 0.256 0.268 

RD Estimate ................................................................................................................... 49.549 *¥259.894 29.122 

(63.234) (149.575) (72.823) 

Avg. tot. past due am ..................................................................................................... 1,131.626 1,155.664 1,276.969 

Panel B: Full sample: 

RD Estimate ................................................................................................................... 0.072 ¥0.111 ¥0.077 

(0.077) (0.235) (0.087) 

Avg. age ......................................................................................................................... 41.092 43.078 40.784 

RD Estimate ................................................................................................................... *¥1.472 1.868 ¥0.817 

(0.590) (1.990) (0.642) 

Avg. credit score ............................................................................................................. 569.811 606.276 561.472 

RD Estimate ................................................................................................................... ** 0.007 0.002 * 0.005 

(0.003) (0.004) (0.003) 

Avg. missing credit score ............................................................................................... 0.171 0.073 0.134 

RD Estimate ................................................................................................................... ¥0.010 ¥0.092 ¥0.010 

(0.020) (0.047) (0.018) 

Avg. num. open loans .................................................................................................... 1.122 1.749 1.065 

RD Estimate ................................................................................................................... 0.001 ¥0.000 0.000 

(0.003) (0.006) (0.004) 

Avg. any D90+ ................................................................................................................ 0.262 0.260 0.267 

RD Estimate ................................................................................................................... ¥33.152 ¥72.382 70.836 

(42.478) (76.899) (40.274) 

Avg. tot. past due am ..................................................................................................... 1,073.628 1,135.919 1,190.611 

Standard errors in parentheses. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 

TABLE 10—PERFORMANCE BALANCE TESTS 407

(1) 

Credit card 

(2) 

Mortgage 

(3) 

Other credit 

accounts 

Panel A: Over $500 sample: 

RD Estimate ................................................................................................................... 0.261 0.294 0.200 

(0.296) (0.894) (0.366) 

Avg. consumer age ........................................................................................................ 41.404 42.692 40.184 

RD Estimate ................................................................................................................... ¥3.694 7.807 0.502 

(2.012) (7.099) (2.608) 

Avg. credit score ............................................................................................................. 618.329 668.427 601.025 

RD Estimate ................................................................................................................... ¥0.005 0.005 0.002 

(0.006) (0.010) (0.007) 

Avg. missing credit score ............................................................................................... 0.078 0.014 0.099 

RD Estimate ................................................................................................................... *** 0.286 * 0.564 0.089 

(0.092) (0.340) (0.092) 

Avg. num. open loans .................................................................................................... 1.884 2.834 1.804 

RD Estimate ................................................................................................................... 0.017 ¥0.019 ¥0.002 

(0.009) (0.027) (0.013) 

Avg. any D90+ ................................................................................................................ 0.248 0.191 0.268 

RD Estimate ................................................................................................................... 175.228 ¥332.580 16.765 

(112.690) (302.978) (180.777) 

Avg. tot. past due am ..................................................................................................... 1,034.492 673.171 1,220.532 

Panel B: Full sample: 

RD Estimate ................................................................................................................... ** 0.411 0.871 0.068 

(0.154) (0.630) (0.200) 

Avg. consumer age ........................................................................................................ 43.264 44.083 42.246 

RD Estimate ................................................................................................................... ¥1.670 ¥0.602 ¥1.194 

(0.921) (3.340) (1.197) 

Avg. credit score ............................................................................................................. 611.625 660.599 590.484 

RD Estimate ................................................................................................................... ¥0.001 0.002 ¥0.000 

(0.003) (0.005) (0.004) 


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407The table includes balance tests for the 

performance sample. Panel A limits the sample to 

inquiries associated with a medical collection 

tradeline over $500 and no medical collection 

tradelines under $500 on the consumer report when 

the inquiry is made. Panel B includes the full 

sample. These balance tests estimate Equation 1 

using characteristics from the consumer’s consumer 

report in the month before the creditor makes an 

inquiry. ‘‘RD Estimate’’ provides the estimate for b 

when the dependent variable is the variable whose 

average is provided. Each column limits the sample 

by inquiry type. ‘‘Any D90+’’ describes whether any 

open or closed account on the consumer report is 

at least 90 days delinquent, and ‘‘tot. past due am.’’ 

describes the total amount past due or charged off 

across all accounts. Standard errors are clustered by 

consumer and adjusted using the BenjaminiHochberg procedure. 

408 In this example, the average delinquency rate 

for credit recipients with unreported medical 

collections is 5.5 percent, compared to 5 percent for 

credit recipients with reported medical collections. 

409 In this example, consumers with reported 

medical collections that originate an account have 

a delinquency rate between 1 and 10 percent, and 

consumers with unreported medical collections that 

originate an account have a delinquency rate 

between 0 and 11 percent. The average delinquency 

rate for both groups is 5.5 percent. 

TABLE 10—PERFORMANCE BALANCE TESTS 407—Continued 

(1) 

Credit card 

(2) 

Mortgage 

(3) 

Other credit 

accounts 

Avg. missing credit score ............................................................................................... 0.057 0.016 0.087 

RD Estimate ................................................................................................................... ¥0.027 ¥0.162 0.029 

(0.042) (0.157) (0.045) 

Avg. num. open loans .................................................................................................... 1.671 2.588 1.530 

RD Estimate ................................................................................................................... 0.003 ¥0.028 0.007 

(0.005) (0.016) (0.007) 

Avg. any D90+ ................................................................................................................ 0.256 0.189 0.274 

RD Estimate ................................................................................................................... 82.685 ¥135.890 35.141 

(88.985) (138.828) (76.515) 

Avg. tot. past due am ..................................................................................................... 1,005.487 609.676 1,191.860 

Standard errors in parentheses. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 

Table 9 provides results for the 

inquiry dataset and Table 10 provides 

results for the performance dataset. 

Nearly all coefficients are not 

statistically significant, and where there 

is statistical significance, the magnitude 

of the coefficient is never larger than 20 

percent of the mean value. This implies 

that credit applications submitted by 

consumers with reported medical 

collections are similar to those 

submitted by consumers whose medical 

collections are not yet on their 

consumer reports at the time of 

application, and differences in inquiry 

success and account performance can be 

attributed to the medical collection 

reporting itself. 

If all credit accounts were equivalent 

in their terms, and delinquency risk was 

an immutable characteristic of 

consumers, one may instead expect 

creditors to require applicants with 

reported medical collections to have 

credit profiles that reflect lower risk 

than those without reported medical 

collections, because consumers with 

reported medical collections have an 

additional, potentially negative, signal 

on their consumer report. Consider, 

under these assumptions, a simple 

example in which a creditor only 

provides credit to applicants whose 

expected delinquency risk is less than 

10 percent. Suppose also that the 

presence of at least one medical 

collection increases an applicant’s true 

delinquency risk by 1 percentage point. 

In this case, creditors will provide 

accounts to consumers whose true 

delinquency risk is between 0 and 11 

percent for applicants with unreported 

medical collections, and between 0 and 

10 percent for applicants with reported 

medical collections. If risk is equally 

distributed across the population, on 

average, a consumer offered credit with 

unreported medical collections would 

be 0.5 percentage points more likely to 

be delinquent than a consumer offered 

credit with reported medical 

collections.408

To the contrary, the balance tests 

estimated in Table 10 show that there 

are no sizable and statistically 

significant differences between the 

credit profiles of consumers with 

reported or unreported medical 

collections that open credit accounts, 

for the considered possible 

differentiating variables. These balance 

tests suggest two possible explanations: 

First, some creditors could use 

medical collection information to deny 

all applicants with such information, 

while other creditors could disregard 

this information. In this case, creditors 

that ignore medical collections 

information would provide credit to the 

same types of consumers on either side 

of the regression discontinuity 

threshold, thus not causing a 

discontinuous change in the 

delinquency risk of approved 

consumers. The findings in Table 7 

would be explained by creditors that 

deny all consumers with reported 

medical collections, but these creditors 

would not contribute to estimating the 

delinquency risk of consumers with 

reported medical collections; there is no 

delinquency rate to measure because 

these consumers did not open an 

account. These differences in creditors’ 

understanding of the usefulness of 

medical collection information could 

explain the statistically insignificant 

differences in delinquency rates across 

the regression discontinuity threshold 

shown in Table 8. 

Second, creditors could provide 

different terms to consumers with 

reported medical collections, which 

may impact their delinquency risk. 

Consumers with reported medical 

collections may appear to be better 

credit risks than consumers with 

unreported medical collections (on a 

differentiating variable for which the 

balance tests were not estimated 

because the CFPB does not have the 

relevant data), but if they are provided 

worse terms, those terms may increase 

their delinquency risk above what it 

would have been had they received the 

terms provided to consumers with 

unreported medical collections. 

Additionally, consumers with lower 

delinquency risk may be less likely to 

take up an offered loan with worse 

terms. If, in the example above, 

consumers with a delinquency risk 

between 0 and 1 percent choose not to 

take up an offered credit account when 

their medical collection is reported and 

they are provided worse terms, the 

average delinquency rate would be 5.5 

percent for consumers with reported 

medical collections, as in the sample of 

consumers with unreported medical 

collections.409

The CFPB does not have information 

about the terms of credit provided to 


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3366 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

410Catherine Hausman & David S. Rapson, 

Regression Discontinuity in Time: Considerations 

for Empirical Applications, 10 Ann. Rev. of Res. 

Econ. (2018), https://www.annualreviews.org/ 

content/journals/10.1146/annurev-resource-121517- 

033306. 411 Id. 

412The table provides regression discontinuity 

estimates for the inquiry and performance datasets, 

separately by credit account type, and omitting all 

inquiries made within seven days of the associated 

medical collection’s reporting date, making a 14- 

day ‘‘donut hole’’ of omitted inquiries. Each 

coefficient (RD Estimate) estimates a percentage 

point effect of having an additional medical 

collection reported on inquiry success (in Columns 

1 and 3) using the inquiry dataset or 90-day 

delinquency (in Columns 2 and 4) using the 

performance dataset. These effects can be 

represented as percent changes by comparing to a 

baseline ‘‘Avg. dep. var.’’, which is calculated as the 

success rate or 90-day delinquency rate of all 

inquiries made to the left of the regression 

discontinuity threshold (or without medical 

collection reporting). Columns 1 and 2 limit the 

sample to inquiries associated with medical 

collection tradelines over $500 made when the 

consumer had no medical collection tradelines 

under $500 on their consumer report. Columns 3 

and 4 include the full sample. Standard errors are 

clustered by consumer and adjusted using the 

Benjamini-Hochberg procedure. 

consumers with reported or unreported 

medical collections, or information 

about credit application approvals that 

are not taken up by consumers, and 

therefore cannot estimate the extent to 

which the delinquency results are 

driven by either possible explanation. 

Regardless of the underlying 

mechanism, the CFPB concludes that 

even when creditors, at baseline, use 

medical collection information, they do 

not reduce their underlying delinquency 

risk by doing so. This suggests that 

differences in inquiry success and 

account performance can be attributed 

to the medical collection reporting 

itself, rather than a change in the 

consumer’s risk of default arising from 

the underlying medical debt. Therefore, 

removing this information under the 

rule will lead creditors to provide more 

credit accounts to consumers that are 

similar in delinquency risk to the credit 

accounts they already provide. 

Two researcher commenters stated 

that the CFPB needed to include control 

variables in its regressions, specifically 

suggesting State of residence, credit 

score, or credit balances. One of these 

commenters stated these variables may 

need to be controlled for if they are 

correlated with either inquiry success or 

account performance and change 

discontinuously around the medical 

collection reporting threshold date, 

citing academic literature.410

The CFPB does not agree that 

including controls for State of residence, 

credit score, or credit balances is 

necessary or appropriate. If these 

control variables were correlated with 

inquiry success or account performance 

and changed discontinuously across the 

threshold date, estimating balance tests 

on these control variables would lead to 

statistically significant and large effects, 

but Tables 9 and 10 find no evidence in 

support of this hypothesis. The CFPB 

did not estimate balance tests for State 

of residence but finds it implausible that 

sufficiently many consumers would 

change States in response to a medical 

collection (so that a consumer’s State 

correlated with the time between the 

inquiry and the medical collection 

report) that the move would 

discontinuously impact either inquiry 

success or account performance. 

Instead, the CFPB interprets its 

coefficients as an average of effects 

across all states, weighted by the 

number of inquiries included in the 

sample from each State. Additionally, 

the CFPB included in the Notice of 

Proposed Rulemaking, and reproduced 

below, a version of its results including 

control variables for day-of-week effects. 

These are the only effects mentioned as 

likely needed control variables in the 

academic literature cited by a 

commenter, but they do not 

meaningfully change the results.411

To further test for the presence of 

anticipation or selection effects, the 

CFPB estimated a ‘‘donut’’ regression 

that removes from the sample all 

inquiries made within seven days of 

their associated medical collection’s 

addition to the consumer report. If the 

regression estimates are driven by 

anticipation or selection, the effects 

would be much smaller when estimated 

without observations near the reporting 

threshold, as application quality would 

be less selected from the threshold. In 

addition, medical collections may not 

be reported to all three NCRAs on 

precisely the same date. The creditors 

that make inquiries to the NCRA that 

provides the CFPB’s CCIP may observe 

a medical collection on an inquiry they 

make to a different NCRA and use this 

information, even though it appears in 

the CCIP that the medical collection was 

not reported. Additionally, the 

construction of inquiry shopping 

windows and inherent imprecision in 

connecting inquiries to opened 

tradelines may further limit the 

accuracy of calculating the running 

variable to a precise day. This is 

especially important near the reporting 

threshold because a one-day error in 

assigning the date a medical collection 

was reported or an inquiry was made 

could be sufficient to erroneously 

categorize the medical collection 

reporting status of an inquiry. The CFPB 

further considered variation in dates 

within inquiry shopping windows 

below. 

TABLE 11—THE EFFECT OF MEDICAL COLLECTION REPORTING ON INQUIRY SUCCESS AND CREDIT ACCOUNT

PERFORMANCE, USING A 14-DAY DONUT 412

(1) 

Over $500, success 

(2) 

Over $500, D90+ 

(3) 

All, success 

(4) 

All, D90+ 

Panel A: Credit cards: 

RD Estimate ............................................................. ***¥0.060 

(0.0080) 

[¥0.075, ¥0.045] 

¥0.006 

(0.015) 

[¥0.036, 0.024] 

***¥0.041 

(0.005) 

[¥0.050, ¥0.032] 

0.008 

(0.008) 

[¥0.009, 0.024] 

Avg. dep. var ............................................................ 0.294 0.232 0.275 0.223 

Observations ............................................................. 578,088 92,708 2,908,047 543,865 

Panel B: Mortgages: 

RD Estimate ............................................................. **¥0.037 

(0.017) 

[¥0.071, ¥0.004] 

¥0.022 

(0.025) 

[¥0.071] 

***¥0.043 

(0.008) 

[¥0.060, ¥0.027] 

¥0.003 

(0.011) 

[¥0.026, 0.019] 

Avg. dep. var ............................................................ 0.186 0.035 0.167 0.038 

Observations ............................................................. 76,358 9,797 422,584 54,818 

Panel C: Other Credit Accounts: 

RD Estimate ............................................................. ¥0.009 

(0.009) 

[¥0.027, 0.009] 

¥0.038 

(0.025) 

[¥0.087, 0.012] 

*¥0.010 

(0.004) 

[¥0.018, ¥0.002] 

0.008 

(0.010) 

[¥0.012, 0.027] 


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413The table provides regression discontinuity 

estimates for the inquiry and performance datasets, 

separately by credit account type, and including 

binary control variables for the day of the week that 

the inquiry was made (or the inquiry shopping 

window’s last date) and the day of the week of the 

associated medical collection tradeline’s addition to 

the consumer report. Each coefficient (RD Estimate) 

estimates a percentage point effect of having an 

additional medical collection reported on inquiry 

success (in Columns 1 and 3) in the inquiry dataset 

or 90-day delinquency (in Columns 2 and 4) in the 

performance dataset. These effects can be 

represented as percent changes by comparing to a 

baseline ‘‘Avg. dep. var.’’, which is calculated as the 

success rate or 90-day delinquency rate of all 

inquiries made to the left of the regression 

discontinuity threshold (or without medical 

collection reporting). Columns 1 and 2 limit the 

sample to inquiries associated with medical 

collections over $500 made when the consumer had 

no medical collection tradelines under $500 on 

their consumer report. Columns 3 and 4 include the 

full sample. Standard errors are clustered by 

consumer and adjusted using the BenjaminiHochberg procedure. 

TABLE 11—THE EFFECT OF MEDICAL COLLECTION REPORTING ON INQUIRY SUCCESS AND CREDIT ACCOUNT

PERFORMANCE, USING A 14-DAY DONUT 412—Continued 

(1) 

Over $500, success 

(2) 

Over $500, D90+ 

(3) 

All, success 

(4) 

All, D90+ 

Avg. dep. var ............................................................ 0.242 0.182 0.245 0.171 

Observations ............................................................. 451,474 69,159 2,387,333 441,523 

Standard errors in parentheses, 95 percent confidence intervals in brackets. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 

Table 11 provides the ‘‘donut’’ 

specification regression results. By 

comparing Column 1 of Table 7 to 

Column 1 of Table 11 and comparing 

Column 4 of Table 7 to Column 3 of 

Table 11, one can observe that effects on 

inquiry success are larger in absolute 

magnitude and more statistically 

significant for credit cards and 

mortgages in the donut specification 

than in the main specification. This 

shows that the main results using the 

inquiry data are not driven by selection 

or anticipation effects. Instead, the 

results in the main specification may be 

attenuated by fuzziness in the date that 

the medical collection was reported or 

that the inquiry was made, as discussed 

above. 

Despite the modest differences 

between Table 11 and Table 7 for the 

inquiry dataset, there are no meaningful 

differences in the magnitude or 

statistical significance of effects for the 

performance datasets, as shown by 

comparing Column 1 of Table 8 to 

Column 2 of Table 11 and comparing 

Column 4 of Table 8 to Column 4 of 

Table 11. This provides further evidence 

that the use of medical collection 

reporting in underwriting does not 

improve account performance. 

A final concern is that it could be 

problematic if there is bunching at 

certain values of the running variable 

because the likelihood of a medical 

collection being reported, or an inquiry 

being made, differs across days of the 

week. For example, fewer than 4 percent 

of the medical collection tradelines 

associated with inquiries in the inquiry 

dataset were reported on a Sunday, 

compared to nearly 28 percent reported 

on a Tuesday. The distribution of 

inquiries in the inquiry dataset (across 

all inquiry product types) is more even, 

with a low of 8.5 percent on Sunday, 

just over 15 percent on Monday through 

Friday, and nearly 14 percent on 

Saturday. Combining these two features, 

an inquiry made on a Monday is more 

likely to correspond to a medical 

collection tradeline on the subsequent 

day than an inquiry made on a 

Saturday. If the types of inquiries made 

on Mondays differ from those made on 

Saturdays, there may be 

disproportionately more inquiries made 

on Monday for the running variable 

value immediately before the threshold 

(equal to –1), which could cause 

selection bias in the estimated effect. To 

test whether this selection biases the 

regression results, the CFPB estimated 

an additional specification that adds 

binary indicator variables to the main 

specification for the day of the week of 

each observation’s inquiry date and date 

of the medical collection report. 

TABLE 12—THE EFFECT OF MEDICAL COLLECTION REPORTING ON INQUIRY SUCCESS AND CREDIT ACCOUNT

PERFORMANCE, CONTROLLING FOR DAY-OF-WEEK EFFECTS 413

(1) 

Over $500, success 

(2) 

Over $500, D90+ 

(3) 

All, success 

(4) 

All, D90+ 

Panel A: Credit cards: 

RD Estimate ............................................................. ***¥0.048 ¥0.002 ***¥0.034 0.001 

(0.006) (0.012) (0.003) (0.006) 

[¥0.059, ¥0.038] [¥0.024, 0.021] [¥0.039, ¥0.028] [¥0.010, 0.012] 

Avg. dep. var ............................................................ 0.294 0.231 0.275 0.223 

Observations ............................................................. 601,230 96,297 3,026,355 565,680 

Panel B: Mortgages: 

RD Estimate ............................................................. *¥0.027 ¥0.017 ¥0.014 0.005 

(0.011) (0.015) (0.009) (0.007) 

[¥0.049, ¥0.004] [¥0.045, 0.012] [¥0.032, 0.003] [¥0.008, 0.018] 

Avg. dep. var ............................................................ 0.186 0.035 0.167 0.038 

Observations ............................................................. 79,372 10,177 439,685 56,976 

Panel C: Other credit accounts: 

RD Estimate ............................................................. *¥0.014 ¥0.015 ***¥0.015 ¥0.002 

(0.006) (0.014) (0.003) (0.006) 

[¥0.026, ¥0.003] [¥0.042, 0.013] [¥0.021, ¥0.010] [¥0.013, 0.010] 

Avg. dep. var ............................................................ 0.242 0.182 0.246 0.171 

Observations ............................................................. 469,290 71,760 2,484,030 459,094 

Standard errors in parentheses, 95 percent confidence intervals in brackets. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 


khammond on DSK9W7S144PROD with RULES2
3368 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

414Note that there may be imprecision in 

assignment of inquiry date for all inquiries, even 

those associated with no other inquiries within a 

shopping window, because the CFPB’s CCIP only 

contains inquiries made to one NCRA. 

415The table provides regression discontinuity 

estimates for the inquiry and performance datasets, 

separately by credit account type, and separately by 

shopping behavior. Each coefficient (RD Estimate) 

estimates a percentage point effect of having an 

additional medical collection reported on inquiry 

success (in Columns 1 and 3) in the inquiry dataset 

or 90-day delinquency (in Columns 2 and 4) in the 

performance dataset. These effects can be 

represented as percent changes by comparing to a 

baseline ‘‘Avg. dep. var.’’, which is calculated as the 

success rate or 90-day delinquency rate of all 

inquiries made to the left of the regression 

discontinuity threshold (or without medical 

collection reporting). Columns 1 and 2 limit the 

sample to inquiries associated with medical 

collection tradelines over $500 made when the 

consumer had no medical collections under $500 

on their consumer report. Columns 3 and 4 include 

the full sample. Columns 1 and 3 include only 

inquiries with shopping windows that contained 

inquiries made on different dates. Columns 2 and 

4 include only inquiries with sole-inquiry shopping 

windows or inquiry shopping windows where all 

inquiries were made on the same date. Standard 

errors are clustered by consumer and adjusted using 

the Benjamini-Hochberg procedure. 

Table 12 provides the regression 

results for a version of Equation 1 that 

includes day-of-the-week controls. 

Results are very similar to the main 

specification, as can be seen by 

comparing Column 1 of Table 7 to 

Column 1 of Table 12, Column 4 of 

Table 7 to Column 3 of Table 12, 

Column 1 of Table 8 to Column 2 of 

Table 12 and comparing Column 4 of 

Table 8 to Column 4 of Table 12. The 

CFPB concluded that the main results 

are not caused by bias in the 

distribution of inquiry or medical 

collection timing across days of the 

week. 

10. Results Related to Credit Shopping 

As described above, the main 

specification defines the running 

variable using the date of the last 

inquiry observed within the inquiry 

shopping window. This creates 

imprecision in the measurement of the 

inquiry date for inquiry observations 

that reflect shopping windows with 

multiple inquiries if they were not made 

on the same date.414 Because this 

imprecision could attenuate results, the 

CFPB estimated Equation 1 separately 

for inquiry observations that reflect 

multi-inquiry-date shopping windows 

(Shopping) and for inquiry observations 

that reflect shopping windows that only 

contain one inquiry date (No Shopping). 

The CFPB estimated this robustness 

check for the inquiry dataset first, and 

then for the performance dataset. 

TABLE 13—THE EFFECT OF MEDICAL COLLECTION REPORTING ON INQUIRY SUCCESS, SEPARATED BY SHOPPING

BEHAVIOR 415

(1) 

Over $500, 

shopping 

(2) 

Over $500, 

no shopping 

(3) 

All, shopping 

(4) 

All, no shopping 

Panel A: Credit cards: 

RD Estimate ............................................................. ¥0.043 

(0.020) 

[¥0.082, ¥0.003] 

***¥0.050 

(0.005) 

[¥0.060, ¥0.039] 

0.000 

(0.013) 

[¥0.025, 0.026] 

***¥0.035 

(0.003) 

[¥0.040, ¥0.030] 

Avg. success ............................................................ 0.445 0.279 0.422 0.262 

Observations ............................................................. 51,481 549,749 250,319 2,776,036 

Panel B: Mortgages: 

RD Estimate ............................................................. ¥0.019 

(0.028) 

[¥0.074, 0.037] 

¥0.022 

(0.011) 

[¥0.043, ¥0.001] 

***¥0.041 

(0.014) 

[¥0.068, ¥0.014] 

¥0.002 

(0.011) 

[¥0.024, 0.020] 

Avg. success ............................................................ 0.329 0.123 0.308 0.111 

Observations ............................................................. 24,266 55,106 126,393 313,292 

Panel C: Other credit accounts: 

RD Estimate ............................................................. 0.002 

(0.015) 

[¥0.030, 0.027] 

¥0.016 

(0.006) 

[¥0.029, ¥0.004] 

¥0.015 

(0.007) 

[¥0.029, ¥0.001] 

***¥0.015 

(0.003) 

[¥0.021, ¥0.008] 

Avg. success ............................................................ 0.391 0.213 0.394 0.217 

Observations ............................................................. 77,603 391,687 400,620 2,083,410 

Standard errors in parentheses, 95 percent confidence intervals in brackets. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 

Table 13 shows results for inquiry 

success for inquiries associated with 

multi-date versus single-date shopping 

windows. For credit cards and other 

non-mortgage accounts, the results are 

only statistically significant for singledate shopping windows and are also 

larger in absolute magnitude. Fewer 

than 10 percent of credit card inquiries 

are associated with multi-date shopping 

windows, which is expected given the 

small average shopping windows for 

credit cards shown in Table 5. 

Alternatively, the only statistically 

significant result for mortgages appears 

for inquiries associated with multi-date 

shopping windows in the full sample. 

This limited ability to identify a precise 

effect is reflected in the main 

specification as well, as shown in Table 

7. The CFPB concluded that, for nonmortgage products, the inability to 

observe the exact date that an inquiry 

was made may attenuate the results in 

the main specification, and the true 

effect of having a medical collection 

reported may be a larger decrease in 

inquiry success than what is reported in 

Table 7. 


khammond on DSK9W7S144PROD with RULES2
Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 3369 

416The table provides regression discontinuity 

estimates for the performance dataset, separately by 

credit account type, and separating the sample by 

shopping behavior. Each coefficient (RD Estimate) 

estimates a percentage point effect of having an 

additional medical collection reported on inquiry 

success. These effects can be represented as percent 

changes by comparing to a baseline ‘‘Avg. D90+’’, 

which is calculated as the 90-day delinquency rate 

of all inquiries made to the left of the regression 

discontinuity threshold (or without medical 

collection reporting). Columns 1 and 2 limit the 

sample to inquiries associated with medical 

collection tradelines over $500 made when the 

consumer had no medical collections under $500 

on their consumer report. Columns 3 and 4 include 

the full sample. Columns 1 and 3 include only 

inquiries with shopping windows that contained 

inquiries made on different dates. Columns 2 and 

4 include only inquiries with sole-inquiry shopping 

windows or inquiry shopping windows where all 

inquiries were made on the same date. Standard 

errors are clustered by consumer and adjusted using 

the Benjamini-Hochberg procedure. 

417The table provides regression discontinuity 

estimates for the inquiry and performance datasets, 

separately by credit account type, and using the 

date of the first inquiry observed within an inquiry 

shopping window instead of the date of the last 

inquiry observed, as in the primary specification. 

The sample is limited to inquiries whose first date 

of the inquiry shopping window was within 180 

days of the medical collection’s inclusion on the 

consumer report. Each coefficient (RD Estimate) 

estimates a percentage point effect having an 

additional medical collection reported on inquiry 

success (in Columns 1 and 3) in the inquiry dataset 

or 90-day delinquency (in Columns 2 and 4) in the 

performance dataset. These effects can be 

represented as percent changes by comparing to a 

baseline ‘‘Avg. dep. var.’’, which is calculated as the 

success rate or 90-day delinquency rate of all 

inquiries made to the left of the regression 

discontinuity threshold (or without medical 

collection reporting). Columns 1 and 2 limit the 

sample to inquiries associated with medical 

collection tradelines over $500 made when the 

consumer had no medical collection tradelines 

under $500 on their consumer report. Columns 3 

and 4 include the full sample. Standard errors are 

clustered by consumer and adjusted using the 

Benjamini-Hochberg procedure. 

TABLE 14—THE EFFECT OF MEDICAL COLLECTION REPORTING ON TWO-YEAR CREDIT ACCOUNT PERFORMANCE, 

SEPARATED BY SHOPPING BEHAVIOR 416

(1) 

Over $500, 

shopping 

(2) 

Over $500, 

no shopping 

(3) 

All, shopping 

(4) 

All, no shopping 

Panel A: Credit cards: 

RD Estimate ............................................................. ¥0.010 ¥0.000 0.023 ¥0.001 

(0.035) (0.013) (0.018) (0.006) 

[¥0.079, 0.059] [¥0.025, 0.025] [¥0.013, 0.059] [¥0.013, 0.011] 

Avg. D90+ ................................................................. 0.320 0.218 0.313 0.210 

Observations ............................................................. 12,288 84,009 70,222 495,458 

Panel B: Mortgages: 

RD Estimate ............................................................. ¥0.005 ¥0.025 0.009 0.001 

(0.020) (0.020) (0.011) (0.008) 

[¥0.045, 0.036] [¥0.063, 0.014] [¥0.012, 0.030] [¥0.015, 0.018] 

Avg. D90+ ................................................................. 0.041 0.027 0.046 0.030 

Observations ............................................................. 5,673 4,504 30,756 26,220 

Panel C: Other credit Accounts: 

RD Estimate ............................................................. ¥0.013 ¥0.003 ¥0.000 ¥0.001 

(0.026) (0.014) (0.012) (0.007) 

[¥0.065, 0.039] [¥0.030, 0.025] [¥0.023, 0.023] [¥0.014, 0.012] 

Avg. D90+ ................................................................. 0.216 0.170 0.207 0.158 

Observations ............................................................. 19,879 51,881 122,953 336,141 

Standard errors in parentheses, 95 percent confidence intervals in brackets. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 

Table 14 provides the same 

robustness check as Table 13 but 

estimates effects on serious delinquency 

using the performance dataset. As in 

previous robustness checks, the 

estimated results on account 

performance are all statistically 

insignificant, and nearly all are small in 

comparison to the baseline average 

delinquency rate. The CFPB considers 

these results as evidence that 

imprecision in assigning inquiry dates 

does not drive the lack of statistical 

significance in the main specification. 

Finally, the CFPB tested whether 

classifying the timing of an inquiry 

shopping window using the last inquiry 

makes a difference to the results. 

Although it makes intuitive sense to 

focus on the last inquiry—a consumer 

finishes shopping, then either gets a 

new account or does not—this could 

impact whether a consumer is 

considered treated or not by having a 

medical collection reported or not. For 

example, if a consumer applied for 

accounts that created inquiries on 

March 5 and March 17, had an account 

opened on March 19, and had a medical 

collections tradeline reported on March 

15, in the main specification described 

above, they would be considered to 

have a medical collection at the time of 

the inquiry. This may be accurate, if the 

March 17 inquiry (or another inquiry 

after March 15 that was made with a 

different NCRA) resulted in the open 

account, but it also may be inaccurate, 

and influence the results reported 

above. To further test how the definition 

of shopping windows may affect the 

main results, the CFPB estimated a 

version of the analysis using the first 

date of the shopping window instead of 

its last date to define the running 

variable. 

TABLE 15—THE EFFECT OF MEDICAL COLLECTION REPORTING ON INQUIRY SUCCESS AND CREDIT ACCOUNT

PERFORMANCE, CLASSIFYING SHOPPING WINDOWS BY FIRST INQUIRY DATE 417

(1) 

Over $500, 

success 

(2) 

Over $500, D90+ 

(3) 

All, success 

(4) 

All, D90+ 

Panel A: Credit cards: 

RD Estimate ............................................................. ***¥0.049 0.002 ***¥0.035 0.004 

(0.004) (0.012) (0.003) (0.006) 


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418The table provides regression discontinuity 

estimates for the performance dataset, separately by 

credit account type, and using the credit limit or 

loan principal at time of origination as the 

dependent variable. Each coefficient (RD Estimate) 

estimates a percentage point effect of having an 

additional medical collection reported on the 

account’s credit limit or loan principal. These 

effects can be represented as percent changes by 

comparing to a baseline ‘‘Avg. credit am.’’, which 

is calculated as the average of the credit limit or 

loan principal for all inquiries made to the left of 

the regression discontinuity threshold (or without 

medical collection reporting). Column 1 limits the 

sample to inquiries associated with medical 

collection tradelines over $500 made when the 

consumer had no medical collection tradelines 

under $500 on their consumer report. Column 2 

includes the full sample. The dependent variable is 

equal to the credit limit at the time of account 

origination for credit cards and other revolving 

accounts. The dependent variable is equal to the 

loan principal at the time of account origination for 

mortgages and other installment products. Standard 

errors are clustered by consumer and adjusted using 

the Benjamini-Hochberg procedure. 

TABLE 15—THE EFFECT OF MEDICAL COLLECTION REPORTING ON INQUIRY SUCCESS AND CREDIT ACCOUNT

PERFORMANCE, CLASSIFYING SHOPPING WINDOWS BY FIRST INQUIRY DATE 417—Continued 

(1) 

Over $500, 

success 

(2) 

Over $500, D90+ 

(3) 

All, success 

(4) 

All, D90+ 

[¥0.058, ¥0.041] [¥0.021, 0.025] [¥0.040, ¥0.030] [¥0.008, 0.016] 

Avg. dep. var ............................................................ 0.294 0.231 0.275 0.222 

Observations ............................................................. 600,209 95,973 3,021,234 563,942 

Panel B: Mortgages: 

RD Estimate ............................................................. ¥0.010 0.003 ¥0.010 0.003 

(0.012) (0.013) (0.008) (0.006) 

[¥0.033, 0.014] [¥0.022, 0.028] [¥0.026, 0.006] [¥0.009, 0.015] 

Avg. dep. var ............................................................ 0.182 0.033 0.163 0.035 

Observations ............................................................. 74674 8836 415412 49986 

Panel C: Other credit Accounts: 

RD Estimate ............................................................. ¥0.010 ¥0.020 ***¥0.012 ¥0.003 

(0.006) (0.014) (0.003) (0.006) 

[¥0.021, 0.002] [¥0.048, 0.008] [¥0.018, ¥0.006] [¥0.015, 0.008] 

Avg. dep. var ............................................................ 0.242 0.182 0.246 0.171 

Observations ............................................................. 467,949 71,401 2,476,494 456,828 

Standard errors in parentheses, 95 percent confidence intervals in brackets. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 

The results in Table 15 are very 

similar in size to those in the main 

specification, as seen by comparing 

Column 1 of Table 7 to Column 1 of 

Table 15, Column 4 of Table 7 to 

Column 3 of Table 15, Column 1 of 

Table 8 to Column 2 of Table 15 and 

comparing Column 4 of Table 8 to 

Column 4 of Table 15. The coefficients 

in Column 1 of Table 15, estimating the 

impact of medical collection reporting 

on inquiry success, are no longer 

marginally significant for mortgages and 

other credit accounts. This may be 

because the last inquiry observed within 

an inquiry shopping window is a better 

proxy for the date that the creditor 

observed the consumer report for these 

products, which is sensible if 

consumers continue to shop when they 

reject an earlier credit offer, or their 

application is rejected. The CFPB 

considers these results as evidence that, 

given the inherent challenges in 

assigning inquiry dates, the method of 

using the last date that an inquiry was 

observed within a shopping window is 

the best available classification. 

11. Results Related to Alternative 

Measures of Account Performance and 

Inquiry Success 

Moving on from statistical and data 

construction considerations, the CFPB 

returns to the applicability of the results 

to the considered equilibrium in which 

all medical collection tradelines are 

removed from consumer reports. 

Creditors may respond to reported 

medical collections by providing lower 

amounts of credit, especially for 

products whose applications do not 

typically request a certain amount of 

credit, such as credit cards (and unlike 

mortgages). The CCIP does not contain 

data on the dollar amount of credit that 

consumers were offered if consumers 

decided not to open an account, but it 

can observe credit limits and loan 

principals for originated accounts. 

Moreover, the CFPB understands that 

credit card accounts are typically 

opened automatically if approved by the 

creditor, such that consumers do not 

have an opportunity to decline an offer 

of credit with a lower limit than they 

prefer. The CFPB estimated Equation 1 

using the account’s credit limit (for 

revolving accounts) or loan principal 

(for installment accounts) as the 

dependent variable. This regression can 

only be run for the performance dataset 

because credit limits and loan 

principals cannot be observed for 

unsuccessful inquiries. 

TABLE 16—THE EFFECT OF MEDICAL COLLECTION REPORTING ON CREDIT ACCOUNT LIMITS AND LOAN PRINCIPALS 418

(1) 

Over 500 

(2) 

All 

Panel A: Credit cards: 

RD Estimate ............................................................................................................. ***¥384.312 ***¥247.492 

(80.367) (33.855) 

[¥541.829, ¥226.795] [¥313.848, ¥181.137] 

Avg. credit am .......................................................................................................... 1,481.169 1,312.252 

Observations ............................................................................................................. 96,208 565,222 

Panel B: Mortgages: 

RD Estimate ............................................................................................................. ¥12,746.532 ¥15,734.984 

(11,952.690) ............................................

[¥36173.374, 10680.309] [¥33208.174, 1738.206] 


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419The table provides regression discontinuity 

estimates for the performance dataset, separately by 

credit account type, and using alternative 

classifications of account performance. Each 

coefficient (RD Estimate) estimates a percentage 

point effect of having an additional medical 

collection reported on the account’s credit limit or 

loan principal. These effects can be represented as 

percent changes by comparing to a baseline ‘‘Avg. 

credit am.’’, which is calculated as the average of 

the credit limit or loan principal for all inquiries 

made to the left of the regression discontinuity 

threshold (or without medical collection reporting). 

Columns 1 through 3 limit the sample to inquiries 

associated with medical collection tradelines over 

$500 made when the consumer had no medical 

collection tradelines under $500 on their consumer 

report. Columns 4 through 6 includes the full 

sample. The dependent variable in Columns 1 and 

4, ‘‘D30+’’, is whether the account was ever at least 

30 days delinquent within two years of its 

origination. The dependent variable in Columns 2 

and 5, ‘‘D90+ alt.’’, is whether the account was at 

least 90 days delinquent exactly two years after the 

origination date, in contrast to the primary 

classification which considers whether the account 

was ever at least 90 days delinquent within two 

years of the origination date. The dependent 

variable in Columns 3 and 6 is the total amount past 

due or charged off on the account exactly two years 

after the account’s origination date if either value 

is positive and non-missing. If accounts have 

positive and non-missing past-due amounts and 

charged-off amounts, the classification uses the 

charged-off amount. Standard errors are clustered 

by consumer and adjusted using the BenjaminiHochberg procedure. 

TABLE 16—THE EFFECT OF MEDICAL COLLECTION REPORTING ON CREDIT ACCOUNT LIMITS AND LOAN PRINCIPALS 418— 

Continued 

(1) 

Over 500 

(2) 

All 

Avg. credit am .......................................................................................................... 232,565.905 225,877.236 

Observations ............................................................................................................. 10,163 56,918 

Panel C: Other credit accounts: 

RD Estimate ............................................................................................................. 254.621 ¥195.017 

(398.877) (220.971) 

[¥527.164, 1036.407] [¥628.113, 238.078] 

Avg. credit am .......................................................................................................... 20,994.097 20,380.048 

Observations ............................................................................................................. 71,739 458,968 

Standard error in parentheses, 95 percent confidence intervals in brackets. 

* p < 0.1, ** p < 0.05, *** p < 0.01. 

Table 16 provides estimates for the 

effect of medical collection reporting on 

credit limits and loan principals. The 

results in Panel A show that medical 

collection reporting leads to lower 

credit limits for originated credit cards, 

with an average reduction in provided 

credit limits of $384 for the over-$500 

sample and $247 for the full sample. 

This represents a meaningful reduction 

in consumer access to credit, as baseline 

average credit limits are lower than 

$1,500 for both samples. As expected, 

the CFPB does not find statistically 

significant effects for mortgages or other 

non-credit-card account types. 

Consumers generally apply for a specific 

dollar amount of credit for installment 

products, and the dollar amount of 

credit provided is not a margin that 

would generally be affected by medical 

collection reporting. 

The CFPB understands that the 

classification of serious delinquency is 

not the sole determinant of account 

performance. Three other measures of 

performance are considered in this final 

set of regressions, estimated on the 

performance dataset: whether the 

account is ever 30 days or more 

delinquent within two years of its 

origination, whether the account is 90 

days or more delinquent at the end of 

its first two years after origination 

(instead of whether it was ever 90 days 

or more delinquent within that two-year 

period), and the dollar amount past due 

or charged off for accounts with nonzero 

past due or charged off amounts at the 

end of its first two years after 

origination. If the primary classification 

of serious delinquency is a good proxy 

for account performance, then results 

for the first two alternative measures 

should be similar to their counterparts 

in the main performance results in 

direction and statistical significance. 

The results for past due amounts may be 

more nuanced, as Table 16 above shows 

that medical collection reporting lowers 

the credit limits of credit cards. This 

may cause lower past due amounts in 

response to medical collection reporting 

because consumers cannot borrow as 

much as they can absent medical 

collection reporting. 

TABLE 17—THE EFFECT OF MEDICAL COLLECTION REPORTING ON TWO-YEAR CREDIT ACCOUNT PERFORMANCE, 

ALTERNATIVE CLASSIFICATIONS 419

(1) 

Over $500, 

D30+ 

(2) 

Over $500, 

D90+ alt. 

(3) 

Over $500, 

past due am. 

(4) 

All, D30+ 

(5) 

All, D90+ alt. 

(6) 

All, past due am. 

Panel A: Credit cards: 

RD Estimate ....................... 0.008 ¥0.006 **¥215.199 0.002 ¥0.003 **¥62.830 

(0.013) (0.011) (86.597) (0.006) (0.005) (29.197) 

[¥0.017, 0.032] [¥0.027, 0.015] [¥384.926, ¥45.472] [¥0.010, 0.015] [¥0.013, 0.008] [¥120.055, ¥5.604] 

Avg. dep. var ...................... 0.321 0.164 713.724 0.316 0.153 643.677 

Observations ...................... 96,297 96,297 19,945 565,680 565,680 111,342 

Panel B: Mortgages: 

RD Estimate ....................... ¥0.034 0.002 4,477.430 0.012 0.001 261.686 

(0.027) (0.010) (2,894.862) (0.012) (0.005) (1,682.921) 

[¥0.087, 0.018] [¥0.018, 0.022] [¥1196.394, 10151.255] [¥0.012, 0.036] [¥0.009, 0012] [¥3036.779, 3560.152] 

Avg. dep. var ...................... 0.125 0.021 7,511.005 0.118 0.019 6,018.840 

Observations ...................... 10,177 10,177 409 56,976 56,976 1,954 

Panel C: Other credit Accounts: 

RD Estimate ....................... ¥0.006 ¥0.002 ¥803.533 ¥0.000 0.000 ¥562.913 

(0.016) (0.013) (732.117) (0.008) (0.005) (301.400) 

[¥0.037, 0.025] [¥0.027, 0.023] [¥2238.455, 631390] [¥0.016. 0.015] [¥0.009, 0.010] [¥1153.647, 27.821] 

Avg. dep. var ...................... 0.322 0.156 7,012.189 0.316 0.145 6,510.499 


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420The commenter incorrectly interprets LossGiven Default as Exposure at Default in his 

interpretation of the formula. Loss-Given Default is 

the percent of Exposure at Default that the creditor 

would lose if the consumer defaulted on the loan. 

The CFPB does not have any data that would allow 

it to estimate Loss-Given Default. 

421The commenter describes Loss-Given Default 

as the average dollar amount of loss given default, 

which is not generally how Loss-Given Default is 

calculated, per the equation provided by the 

commenter and described above. The CFPB 

interprets the comment as being about Loss-Given 

Default conceptually, regardless of the exact 

calculation. 

TABLE 17—THE EFFECT OF MEDICAL COLLECTION REPORTING ON TWO-YEAR CREDIT ACCOUNT PERFORMANCE, 

ALTERNATIVE CLASSIFICATIONS 419—Continued 

(1) 

Over $500, 

D30+ 

(2) 

Over $500, 

D90+ alt. 

(3) 

Over $500, 

past due am. 

(4) 

All, D30+ 

(5) 

All, D90+ alt. 

(6) 

All, past due am. 

Observations ...................... 71,760 71,760 13,777 459,094 459,094 81,546 

Standard errors in parentheses, 95 percent confidence intervals in brackets. 

** p < 0.1, ** p < 0.05, *** p < 0.01. 

Table 17 estimates Equation 1 on the 

performance dataset using alternative 

measures of account performance. 

Columns 1, 2, 4, and 5 show small and 

statistically significant effects of 

medical collection reporting on account 

performance, as in Columns 1 and 4 of 

Table 8. In Panel A, Columns 3 and 6 

provide relatively small but at least 

marginally significant effects, suggesting 

that medical collection reporting may 

lead to lower past-due or charged-off 

amounts for credit cards, when those 

amounts are nonzero. This may be 

caused by the lower credit limits 

provided to consumers with reported 

medical collections, as shown in Table 

16. Though credit cards originated to 

consumers with unreported medical 

collections may be no more likely to 

become seriously delinquent within two 

years, the dollar amount past due when 

the account is delinquent may be higher 

because consumers with unreported 

medical collections receive higher credit 

limits. The results in Panels B and C 

show no statistically significant effects 

on past-due or charged-off amounts for 

mortgages, as expected because there 

were no differences in serious 

delinquency or in the dollar amount of 

credit provided. 

A researcher commenter suggested 

that the CFPB incorporate a risk 

management framework in its 

interpretation of the results in Tables 16 

and 17, where a creditor’s expected loss 

is modeled as: 

Expected Loss = Probability of Default × 

Exposure at Default × Loss-Given 

Default 

The commenter notes that the 

analysis in the Technical Appendix 

focuses on the Probability of Default, 

finding that this would be unchanged 

under the proposed rule. For credit 

cards, the commenter stated that the 

Exposure at Default, generally the entire 

credit limit for consumers defaulting on 

credit cards, may be higher under the 

proposed rule because credit limits and 

amounts past due are higher for 

accounts originated by consumers with 

unreported medical collections, as 

shown in Tables 16 and 17. 

The CFPB agrees that may be an 

appropriate theoretical framework to 

consider expected losses. However, the 

CFPB does not have the information 

needed to evaluate this formula.420

Additionally, the CFPB notes that what 

is ultimately important to creditors is 

profit, which includes both expected 

losses and expected revenue. Creditors 

can earn higher revenues when 

providing higher credit limits to 

consumers who revolve their balance 

from month-to-month and pay interest 

fees. Therefore, although expected loss 

for credit card lenders may be higher 

under the rule because the Exposure at 

Default is higher, the expected revenue 

may be higher, too. 

The researcher commenter further 

stated that the Loss-Given Default, or 

the percent of the loss that could not be 

recouped by the creditor in the case of 

default, might be higher under the 

proposed rule because recoverable debt 

values would fall under the proposed 

rule.421 The commenter did not explain 

why recoverable debt values would fall, 

but the comment seemed to be based on 

an assumption that medical debt will 

become more challenging to collect 

under the rule. While the CFPB does not 

agree with this assumption, as discussed 

above in part VII.E.1, this is not relevant 

to the analysis here, which pertains to 

potential losses for credit cards. The 

CFPB is not aware of evidence 

indicating that recoverable debt values 

would fall for types of debt other than 

medical debt, and the commenter did 

not provide any evidence suggesting as 

much. As such, the CFPB does not 

expect that Loss-Given Default will 

change due the rule. 

List of Subjects in 12 CFR Part 1022 

Banks, banking, Consumer protection, 

Credit unions, Holding companies, 

National banks, Privacy, Reporting and 

recordkeeping requirements, Savings 

associations. 

Authority and Issuance 

For the reasons set forth in the 

preamble, the CFPB amends Regulation 

V, 12 CFR part 1022, as set forth below: 

PART 1022—FAIR CREDIT 

REPORTING (REGULATION V) 

■ 1. The authority citation for part 1022 

continues to read as follows: 

Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 

1681a, 1681b, 1681c, 1681c–1, 1681c–3, 

1681e, 1681g, 1681i, 1681j, 1681m, 1681s, 

1681s–2, 1681s–3, and 1681t; Sec. 214, Pub. 

L. 108–159, 117 Stat. 1952. 

Subpart A—General Provisions 

■ 2. Amend § 1022.3 by adding 

paragraph (j) to read as follows: 

§ 1022.3 Definitions. 

* * * * * 

(j) Medical debt information means 

medical information that pertains to a 

debt owed by a consumer to a person 

whose primary business is providing 

medical services, products, or devices, 

or to such person’s agent or assignee, for 

the provision of such medical services, 

products, or devices. Medical debt 

information includes but is not limited 

to medical bills that are not past due or 

that have been paid. 

* * * * * 

Subpart D—Medical Information 

■ 3. Amend § 1022.30 by: 

■ a. Revising paragraph (c); 

■ b. Removing and reserving paragraph 

(d); 

■ c. Revising paragraphs (e)(1)(viii) and 

(ix); and 

■ d. Adding paragraphs (e)(1)(x) and 

(e)(6) and (7). 

The revisions and additions read as 

follows: 

§ 1022.30 Obtaining or using medical 

information in connection with a 

determination of eligibility for credit. 

* * * * * 

(c) Rule of construction for obtaining 

and using unsolicited medical 

information—(1) In general. A creditor 


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does not obtain medical information in 

violation of the prohibition if it receives 

medical information pertaining to a 

consumer in connection with any 

determination of the consumer’s 

eligibility, or continued eligibility, for 

credit without specifically requesting 

medical information. 

(2) Use of unsolicited medical 

information. A creditor that receives 

unsolicited medical information in the 

manner described in paragraph (c)(1) of 

this section may use that information in 

connection with any determination of 

the consumer’s eligibility, or continued 

eligibility, for credit to the extent the 

creditor can rely on at least one of the 

exceptions in paragraph (e) of this 

section. 

(3) Examples. A creditor does not 

obtain medical information in violation 

of the prohibition if, for example: 

(i) In response to a general question 

regarding a consumer’s debts or 

expenses, the creditor receives 

information that the consumer owes a 

debt to a hospital. 

(ii) In a conversation with the 

creditor’s loan officer, the consumer 

informs the creditor that the consumer 

has a particular medical condition. 

* * * * * 

(e) * * * 

(1) * * * 

(viii) To determine the consumer’s 

eligibility for, the triggering of, or the 

reactivation of a debt cancellation 

contract or debt suspension agreement if 

a medical condition or event is a 

triggering event for the provision of 

benefits under the contract or 

agreement; 

(ix) To determine the consumer’s 

eligibility for, the triggering of, or the 

reactivation of a credit insurance 

product if a medical condition or event 

is a triggering event for the provision of 

benefits under the product; or 

(x) So long as the conditions in 

paragraphs (e)(1)(x)(A) through (C) of 

this section are met: 

(A)(1) The medical information is 

included in the transaction information 

of an account for a consumer financial 

product or service described in 12 CFR 

1033.111(b)(1) through (3), and accessed 

with the consumer’s authorization; or 

(2) The medical information relates to 

income, benefits, or the purpose of the 

loan, including the use of proceeds. 

Medical information relating to income 

and benefits includes, for example, the 

dollar amount and continued eligibility 

for disability income, workers’ 

compensation income, or other benefits 

related to health or a medical condition 

that is relied on as a source of 

repayment. 

(B) The creditor uses the medical 

information in a manner and to an 

extent that is no less favorable than it 

would use comparable information that 

is not medical information in a credit 

transaction. 

(C) The creditor does not take the 

consumer’s physical, mental, or 

behavioral health, condition or history, 

type of treatment, or prognosis into 

account as part of the determination of 

the consumer’s eligibility, or continued 

eligibility, for credit. 

* * * * * 

(6) Example to comply with 

applicable requirements of local, State, 

or Federal laws. A consumer applies for 

a mortgage loan subject to § 1026.43(c) 

or § 1026.34(a)(4) of this chapter, or an 

open-end (not home-secured) credit 

card account subject to § 1026.51(a) of 

this chapter. The application does not 

specifically request medical 

information, but the consumer provides 

unsolicited medical information on the 

application. The creditor or the card 

issuer is permitted under paragraph 

(e)(1)(ii) of this section to use such 

medical information in connection with 

any determination of the consumer’s 

eligibility, or continued eligibility, for 

credit only to the extent required by the 

applicable Federal law and 

implementing regulation. For example, 

assume a consumer applies for a 

mortgage loan subject to § 1026.43(c) of 

this chapter. Assume further that the 

creditor has not specifically requested 

medical information on the application, 

but the consumer provides information 

on a current debt obligation, such as a 

monthly medical payment plan, that is 

medical information. The creditor is 

permitted under paragraph (e)(1)(ii) of 

this section to consider the existence 

and the amount of the medical payment 

plan as required in considering factors 

under § 1026.43(c)(2) of this chapter, 

such as the current debt obligations, 

consumer’s monthly debt-to-income 

ratio, and residual income, in making 

the repayment ability determination 

required under § 1026.43(c)(1) of this 

chapter. In this circumstance, the 

creditor would not be required to 

independently verify the existence and 

amount of the monthly medical 

payment plan, as provided for under 

§ 1026.43(c)(3)(iii) of this chapter. See 

also Regulation Z (12 CFR 1026.43(c)(3), 

comment 43(c)(3)–6), describing a 

situation in which a consumer provides 

a creditor with information on a debt 

obligation that is not listed on a 

consumer report. Further, a creditor or 

card issuer is not permitted under 

paragraph (e)(1)(ii) of this section to 

obtain or use any medical information 

from a consumer reporting agency to 

comply with the ability-to-repay rule 

under § 1026.43(c) of this chapter for 

closed-end mortgages, the repayment 

ability rule under § 1026.34(a)(4) of this 

chapter for open-end, high-cost 

mortgages, or the ability-to-pay rule 

under § 1026.51(a) of this chapter for 

open-end (not home-secured) credit 

card accounts, because the creditor or 

card issuer can comply with those rules 

using information provided by the 

consumer. This example only relates to 

the exception under paragraph (e)(1)(ii) 

of this section. A creditor or card issuer 

may obtain and use medical information 

for purposes of Regulation Z’s ability-torepay or pay determinations pursuant to 

other exceptions in paragraph (e) of this 

section, as applicable. 

(7) Example of medical information 

relating to income and benefits. A 

consumer indicates on an application 

for a $200,000 mortgage loan that she 

receives $15,000 in long-term disability 

income each year from her former 

employer and has no other income. 

Annual income of $15,000, regardless of 

source, would not be sufficient to 

support the requested amount of credit. 

The creditor denies the application on 

the basis that the projected debt-toincome ratio of the consumer does not 

meet the creditor’s underwriting 

criteria. The creditor has used medical 

information in a manner and to an 

extent that is no less favorable than it 

would use comparable non-medical 

information. 

■ 4. Amend 12 CFR part 1022 by adding 

reserved §§ 1022.33 through 1022.37 

and by adding § 1022.38 to subpart D to 

read as follows: 

§ § 1022.33–1022.37 [Reserved] 

§ 1022.38 Duty of consumer reporting 

agencies regarding medical debt 

information. 

(a) Scope. This section applies to any 

consumer reporting agency as defined in 

section 603(f) of the FCRA, 15 U.S.C. 

1681a(f). 

(b) Limitation regarding prohibited 

medical debt information. A consumer 

reporting agency may include medical 

debt information, as defined in 

§ 1022.3(j), in a consumer report 

furnished to a creditor only if the 

consumer reporting agency: 


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3374 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Rules and Regulations 

(1) Has reason to believe the creditor 

intends to use the medical debt 

information in a manner not prohibited 

by § 1022.30; and 

(2) Has reason to believe the creditor 

is not otherwise legally prohibited from 

obtaining or using the medical debt 

information, including by a State law 

that prohibits a creditor from obtaining 

or using medical debt information. 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–30824 Filed 1–13–25; 8:45 am] 

BILLING CODE 4810–25–P 


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