CFPB Medical Debt Credit Reporting Rule Vacated, No Reissue

Three Key Points:

1. The courts ruled in favor of Cornerstone Credit Union League and Consumer Data Industry Association in their lawsuit against the CFPB.
2. The CFPB does not plan to reissue the advisory opinion.
3. The advisory opinion never went into effect due to the previous stay of implementation.

The long battle over the Consumer Financial Protection Bureau (CFPB) medical debt credit reporting rule may finally be over. On July 11, 2025, the U.S. District Court for the Eastern District of Texas ruled in favor of Cornerstone Credit Union League and Consumer Data Industry Association in their lawsuit seeking to invalidate the CFPB’s medical debt reporting rule, which would have removed medical debt from consumer credit reports and prohibited lenders from using that information in credit decisions. On July 15, 2025, the CFPB filed in federal court confirming they would not reissue the medical debt advisory opinion, as reported by ACA International.

How We Got Here

In late 2024, the CFPB announced an advisory opinion that would have removed unpaid medical debt from consumer credit reports. In addition to Cornerstone Credit Union League and Consumer Data Industry Association, ACA International and Collection Bureau Services, Inc., also filed a lawsuit against the CFPB for the advisory opinion.

After a preliminary injunction was granted in February 2025 on the original lawsuit, and a motion to stay was granted in the ACA and Collection Bureau Services lawsuit, the CFPB announced its plans to revoke the advisory opinion in April.

The Final CFPB Decision

In the original lawsuit, the plaintiffs argued that the rule exceeded the CFPB’s authority and violated several acts. The court granted the consent judgment, ruling that:

• The CFPB’s medical debt rule exceeded the agency’s statutory authority.
• The rule violated the Fair Credit Reporting Act.
• The rule was “contrary to law” under the APA.

Though the rule never actually took effect due to the previous stay of implementation, the court vacated the entire medical debt rule, completely nullifying it and ensuring it will not take effect, pending any appeal.

The court also stated: “Finally, just as an agency cannot prohibit what a federal statute explicitly permits, neither can a state law. Accordingly, any state law purporting to prohibit a CRA from furnishing a credit report with coded medical information would be inconsistent with FCRA and therefore preempted.”

While this isn’t necessarily a green light to credit report in states that have prohibited medical debt credit reporting, it is a step in that direction.

No Reissued CFPB Rule

After the judgment was announced, the CFPB filed a report in federal court confirming that it will not be reissuing the medical debt collection advisory opinion, effectively ending any appeals. The CFPB also acknowledged several flaws in the advisory opinion, including a lack of clear guidance, regulatory overreach, and that it would have been a costly burden on medical debt collectors. Now that the CFPB has withdrawn the advisory opinion and confirmed it will not be reissued, the ACA and Collection Bureau Services are voluntarily dismissing their lawsuit.