Medical Debt Relief Act of 2025
Summary
The Medical Debt Relief Act of 2025 aims to amend the Fair Credit Reporting Act to prohibit the inclusion of medical debt on consumer reports. This bill defines 'medical debt' and excludes adverse information related to it from credit reports. It also directs the Bureau of Consumer Financial Protection to modify regulations to prevent creditors from using medical debt information in credit decisions.
Expected Effects
The act would prevent medical debt from negatively impacting consumers' credit scores and their ability to obtain credit. This could lead to increased access to loans, mortgages, and other financial products for individuals with medical debt. The changes aim to protect consumers from financial hardship due to medical expenses.
Potential Benefits
- Prevents medical debt from lowering credit scores.
- Increases access to credit for individuals with medical debt.
- Reduces financial stress and hardship related to medical expenses.
- Protects consumers from potential discrimination by creditors based on medical history.
- Simplifies the credit reporting process by excluding medical debt information.
Potential Disadvantages
- May increase the risk for lenders, potentially leading to higher interest rates for all borrowers.
- Could reduce the incentive for individuals to pay their medical bills.
- May require additional regulatory oversight and enforcement.
- Potential for unintended consequences in the credit market.
- Some healthcare providers might tighten credit policies.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution, as it aims to improve the financial well-being of citizens by protecting them from the negative impacts of medical debt on their credit scores. Congress has the power to regulate commerce, including credit reporting, under Article I, Section 8. The Act does not appear to infringe upon any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).