Medical Debt Relief Act of 2021
Bill: S.214 | Sponsor: Sen. Merkley, Jeff (D-OR)
Policy area: Finance and Financial Sector

Summary:
Medical Debt Relief Act of 2021
This bill modifies requirements related to the reporting of medical debt. Specifically, a consumer reporting agency is prohibited from adding medical debt information to a consumer credit report if the debt
Additionally, a debt collector must notify the consumer prior to reporting medical debt to a consumer reporting agency.

To amend the Fair Credit Reporting Act to institute a 1-year waiting 
  period before medical debt will be reported on a consumer's credit 
  report and to remove paid-off and settled medical debts from credit 
 reports that have been fully paid or settled, to amend the Fair Debt 
  Collection Practices Act to provide a timetable for verification of 
medical debt and to increase the efficiency of credit markets with more 
              perfect information, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medical Debt Relief Act of 2021''.

SEC. 2. AMENDMENTS TO FAIR CREDIT REPORTING ACT.

    (a) Medical Debt Defined.--Section 603 of the Fair Credit Reporting 
Act (15 U.S.C. 1681a) is amended by adding at the end the following:
    ``(bb) Medical Debt.--The term `medical debt' means a debt 
described in section 604(g)(1)(C).''.
    (b) Exclusion for Paid or Settled Medical Debt.--Section 605(a) of 
the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended by adding 
at the end the following:
    ``(9) Any information relating to a medical debt if the date on 
which the debt was placed for collection, charged to profit or loss, or 
subjected to any similar action antedates the report by less than 1 
year.
    ``(10) Any information relating to a fully paid or settled medical 
debt that had been characterized as delinquent, charged off, or in 
collection which, from the date of payment or settlement, antedates the 
report by more than 45 days.''.

SEC. 3. AMENDMENTS TO THE FAIR DEBT COLLECTION PRACTICES ACT.

    (a) In General.--Section 809 of the Fair Debt Collection Practices 
Act (15 U.S.C. 1692g) is amended by adding at the end the following:
    ``(f) Additional Notice Requirements for Medical Debt.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Consumer reporting agency.--The term 
                `consumer reporting agency' has the meaning given the 
                term in section 603(f) of the Fair Credit Reporting Act 
                (15 U.S.C. 1681a(f)).
                    ``(B) Medical debt.--The term `medical debt' means 
                a debt arising from the receipt of medical services, 
                products, or devices.
            ``(2) Notice about credit reporting.--Before furnishing 
        information regarding a medical debt of a consumer to a 
        consumer reporting agency, the person furnishing the 
        information shall send a statement to the consumer that 
        includes the following:
                    ``(A) A notification that the medical debt may not 
                be reported to a consumer reporting agency until the 
                end of the 1-year period beginning on the date on which 
                the person sends the statement.
                    ``(B) The specific date that is the end of the 1-
                year period beginning on the date on which the person 
                sends the statement.
                    ``(C) A notification that, if the debt is settled 
                or paid by the consumer or an insurance company during 
                the 1-year period beginning on the date on which the 
                person sends the statement--
                            ``(i) the debt may not be reported to a 
                        consumer reporting agency; and
                            ``(ii) the consumer may, during that 1-year 
                        period--
                                    ``(I) communicate with an insurance 
                                company to determine coverage for the 
                                debt; or
                                    ``(II) apply for financial 
                                assistance.
            ``(3) No reporting during 1-year period.--
                    ``(A) In general.--During the 1-year period 
                described in paragraph (2), no person may communicate 
                with, or report any information to, any consumer 
                reporting agency regarding a debt described in that 
                paragraph.
                    ``(B) Rule of construction.--Nothing in 
                subparagraph (A) may be construed to affect when a debt 
                collector may engage in activities to collect or 
                attempt to collect any debt owed or due or asserted to 
                be owed.
            ``(4) Reporting after the 1-year period.--Nothing in this 
        subsection shall prohibit a person from communicating with, or 
        reporting any information to, a consumer reporting agency 
        regarding a medical debt of a consumer after the end of the 1-
        year period described in paragraph (2) with respect to the 
        debt.''.

SEC. 4. EFFECTIVE DATE.

    The amendments made by this Act shall take effect on the date that 
is 180 days after the date of enactment of this Act.
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