Medical Debt Relief Act of 2025
Summary
The Medical Debt Relief Act of 2025 aims to amend the Fair Credit Reporting Act (FCRA) to prohibit the inclusion of medical debt on consumer reports. This bill defines medical debt and excludes it from being considered adverse information under the FCRA. It also directs the Bureau of Consumer Financial Protection to modify regulations to prevent creditors from using medical debt information in credit determinations.
Expected Effects
The act would prevent medical debt from negatively impacting credit scores and access to credit. This could lead to improved financial stability for individuals and families burdened by medical expenses. The change would require creditors to adjust their lending practices, potentially impacting risk assessment models.
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.
- Simplifies the credit reporting process by excluding medical debt.
- Could lead to fairer lending practices by focusing on other financial indicators.
Potential Disadvantages
- May increase the risk for lenders due to incomplete credit information.
- Could lead to higher interest rates for all borrowers to offset increased risk.
- Potential for unintended consequences if individuals take on more debt due to improved credit scores.
- May require significant adjustments to existing credit scoring models and lending practices.
- Could create a need for alternative methods of assessing creditworthiness related to healthcare expenses.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution, as it aims to improve the financial well-being of citizens burdened by medical debt. Congress has the power to regulate commerce, and this bill amends the Fair Credit Reporting Act, which falls under that power (Article I, Section 8). The bill does not appear to infringe on any specific constitutional rights or freedoms.
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).