Trump administration moves to overrule state laws protecting credit reports from medical debt

By KEN SWEET NEW YORK AP The Trump administration is moving to overrule any state laws that may protect consumers credit reports from diagnostic debt and other debt issues Related Articles Trump administration shakes up ICE leadership across the country in major overhaul JD Vance and Pete Buttigieg top early NH presidential poll Judge extends order barring the Trump administration from firing federal workers during the shutdown Pete Hegseth refuses to meet with bearded soldiers in South Korea Leaders show little proof that new tech will help Medicaid enrollees meet work rules The Consumer Financial Protection Bureau has drafted what s known as an interpretative rule related to the Fair Credit Reporting Act interpreting the law in a way that says the FCRA should preempt any state laws or regulations when it comes to how debt should be announced to the credit bureaus like Experian Equifax and Trans Union This repeals previous Biden-era rules and regulations that allowed states to implement their own credit reporting bans More than a dozen states like New York and Delaware prohibit the reporting of diagnostic debt on a consumers credit assessment Diagnostic debt is often the the greater part disputed part of a consumer s credit summary because insurance payments can take time and oftentimes patients do not have the means to fully pay a curative bill if insurance is not covering a procedure that has already taken place The three credit bureaus jointly released in they would no longer track any therapeutic debts below which at the time the bureaus revealed would eliminate of all anatomical debts released on consumers credit files But selected states have gone further than that New York Delaware and others passed laws where healthcare debts can no longer be announced to the credit bureaus The CFPB which is largely not operating at the moment with the exception of actively repealing previous rules written under President Biden or earlier says in its rule that Congress intended to create national standards for the credit reporting system under the FCRA and state laws run afoul of that intention The Kaiser Family Foundation estimates that Americans owe roughly billion in biological debt In Republican-controlled states like South Dakota Mississippi West Virginia and Georgia roughly one in six Americans have outstanding curative debt according to the KFF Having outstanding delinquent clinical debt can impact the ability for an individual to apply for a mortgage a credit card or an auto loan A spokesperson for the Bureau did not straightaway respond to a request for comment