BILLING CODE: 4810-AM-P
CONSUMER FINANCIAL PROTECTION BUREAU
12 CFR Part 1022
[Docket No. CFPB-2024-0023]
RIN 3170-AA54
Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical
Information (Regulation V)
AGENCY: Consumer Financial Protection Bureau.
ACTION: Proposed rule; request for public comment.
SUMMARY: The Consumer Financial Protection Bureau (CFPB) is seeking public comment
on a proposed rule amending Regulation V, which implements the Fair Credit Reporting Act
(FCRA), concerning medical information. The CFPB is proposing to remove a regulatory
exception in Regulation V from the limitation in the FCRA on creditors obtaining or using
information on medical debts for credit eligibility determinations. The proposed rule would also
provide that a consumer reporting agency generally may not furnish to a creditor a consumer
report containing information on medical debt that the creditor is prohibited from using.
DATES: Comments must be received on or before August 12, 2024.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2024-0023 or RIN
3170-AA54, by any of the following methods:
•

Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for
submitting comments. A brief summary of this document will be available at
https://www.regulations.gov/docket/CFPB-2024-0023.

•

Email: 2024-NPRM-MEDICAL-DEBT@cfpb.gov. Include Docket No. CFPB-2024-2023
or RIN 3170-AA54 in the subject line of the message.

•

Mail/Hand Delivery/Courier: Comment Intake—2024 NPRM FCRA Medical Debt
Information, c/o Legal Division Docket Manager, Consumer Financial Protection Bureau,
1700 G Street NW, Washington, DC 20552.
Instructions: The CFPB encourages the early submission of comments. All submissions

should include the agency name and docket number or Regulatory Information Number (RIN)
for this rulemaking. Because paper mail is subject to delay, commenters are encouraged to
submit comments electronically. In general, all comments received will be posted without
change to https://www.regulations.gov.
All submissions, including attachments and other supporting materials, will become part
of the public record and subject to public disclosure. Proprietary information or sensitive
personal information, such as account numbers or Social Security numbers, or names of other
individuals, should not be included. Submissions will not be edited to remove any identifying or
contact information.
FOR FURTHER INFORMATION CONTACT: George Karithanom, Regulatory
Implementation & Guidance Program Analyst, Office of Regulations, at 202-435-7700 or
https://reginquiries.consumerfinance.gov/. If you require this document in an alternative
electronic format, please contact CFPB_Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION:
I. Background
A. Rulemaking Goals
Information about a person’s medical history and health is sacrosanct and among the
most intimate and sensitive categories of data. Recognizing the uniquely sensitive nature of such
information, Congress acted to limit the use and sharing of medical information in the financial
system.1 Congress did so in order to “establish strong privacy protections for consumers’

Fair and Accurate Credit Transactions Act of 2003 (FACT Act), Pub. L. 108-159, 117 Stat. 1952, 1999 (2003).

sensitive medical information,” in line with the overarching privacy protection purpose of the
Fair Credit Reporting Act (FCRA).2 As part of these protections, Congress restricted a creditor’s
ability to obtain or use a consumer’s medical information in connection with any determination
of the consumer’s eligibility, or continued eligibility, for credit.3 A number of concerns have
been raised about whether a regulatory exception that permits creditors to consider sensitive
medical information about a consumer’s debts and certain other types of medical information is
consistent with the congressional intent to restrict the use of medical information for
inappropriate purposes.
For tens of millions of consumers, medical debt is an unexpected and unwanted expense
that can lead to financial hardships. The CFPB is proposing this rule to address concerns that
information about medical debt is not necessary and appropriate for credit underwriting and, as a
result, does not warrant an exception to the medical information privacy protections established
by Congress.
Due to the complexity of medical billing, information about medical debt is often plagued
with inaccuracies and errors. Third-party reimbursement processes, and debt collectors’ practices
for providing (or furnishing) information on consumers’ debts to consumer reporting agencies,
can contribute to the prevalence of errors and consumer confusion about their medical bills.4
This can uniquely affect not just the accuracy of the information a creditor may consider about a
medical debt, but also a consumer’s understanding of whether, when, or in what amount, a
medical bill must be paid. Many consumers do not find out about an erroneous medical bill in

15 U.S.C. 1681 et seq., 1681(a)(4); 149 Cong. Rec. H8122-02, H8122 (daily ed. Sept. 10, 2003) (statement of Rep.
Kanjorsky).
3

15 U.S.C. 1681b(g)(2).

See Consumer Fin. Prot. Bureau, Consumer credit reports: A study of medical and non-medical collections, at 1516, 38-49 (Dec. 2014), https://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-nonmedical-collections.pdf (discussing billing and collection practices for medical debt generally, in discussion of
medical collections tradelines on consumer reports).
collections until applying for a mortgage or car loan and being denied for the loan based on their
consumer report.5
Research has shown that medical debt has limited predictive value for credit underwriting
purposes. Questions about the reliability of information about medical debt, as compared to
information about other types of consumer debt, have been raised based on research performed
by the CFPB and others.6 Medical debt may be less predictive of whether a consumer will pay a
future loan, because medical debts can occur and are collected through unique circumstances and
practices. For example, consumers often have limited ability to control the timing and types of
medical services that are required.
Because consumer reports can operate as a gatekeeper to significant life and economic
decisions, medical debt can be used as leverage by debt collectors to coerce consumers to pay
medical bills they may not owe.7 In such circumstances, consumers are forced to choose between
challenging inaccurate medical bills, often while recovering from a serious illness, or paying the
inaccurate bill due to a frequently short review period.
Market participants, including in the consumer reporting industry and those most
financially incentivized to assess the predictive value of medical debt, have reduced their
reliance on medical debt in recognition of its limited utility. Consumer reporting agencies have
removed certain medical debts from consumer reports.8 Major credit scoring companies have

This document uses the term “consumer report” which has the meaning provided in section 603(d) of the FCRA,
15 U.S.C. 1681a(d). “Consumer report” is also commonly referred to as “credit report.”
See, e.g., Kenneth P. Brevoort & Michelle Kambara, Consumer Fin. Prot. Bureau, Data point: Medical debt and
credit scores (May 2014), https://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-creditscores.pdf. See also Mark Rukavina, Medical Debt and Its Relevance When Assessing Creditworthiness, 46 Suffolk
U. L. Rev. 967 (2013), https://bpb-use1.wpmucdn.com/sites.suffolk.edu/dist/3/1172/files/2014/01/Rukavina_Lead.pdf.
See, e.g., Consumer Fin. Prot. Bureau, Fair Debt Collection Practices Act: CFPB Annual Report 2023, at 2-5
(Nov. 2023), https://files.consumerfinance.gov/f/documents/cfpb_fdcpa-annual-report_2023-11.pdf (describing
consumer medical collection complaints received by the CFPB).
See, e.g., Business Wire, Equifax, Experian, and TransUnion Support U.S. Consumers With Changes to Medical
Collection Debt Reporting (Mar. 18, 2022),
https://www.businesswire.com/news/home/20220318005244/en/Equifax-Experian-and-TransUnion-Support-U.S.Consumers-With-Changes-to-Medical-Collection-Debt-Reporting.
accorded less weight to, or excluded entirely, medical debt information in their newer models.9
Similarly, some creditors have adjusted how their underwriting standards treat medical debt
information.10
Based on the totality of this information, the CFPB is proposing changes to how creditors
and consumer reporting agencies treat medical information concerning a consumer’s medical
debt to ensure the use of such information is consistent with the congressional intent to safeguard
consumers’ privacy and restrict the use of medical information for inappropriate purposes.
B. Summary of the Proposed Rule
Congress, through the Fair and Accurate Credit Transactions Act of 2003 (FACT Act),
amended the FCRA to restrict creditors’ ability to obtain or use medical information in
connection with credit eligibility determinations (creditor prohibition).11 In doing so, Congress
recognized that a consumer’s medical information is particularly sensitive, warranting
heightened privacy protections. However, in 2005, the Federal financial agencies and the
National Credit Union Administration (Agencies) issued a regulatory exception (financial
information exception) to this statutory prohibition, permitting consumers’ medical financial
information to be obtained and used by creditors in connection with credit eligibility

See AnnaMaria Andriotis, Major Credit-Score Provider to Exclude Medical Debts, Wall St. J. (Aug. 10, 2022),
https://www.wsj.com/articles/major-credit-score-provider-to-exclude-medical-debts-11660102729 (VantageScore
CEO quoted as saying that having medical debt is not necessarily reflective of a consumer’s ability to pay back a
loan); Ethan Dornhelm, The Impact of Medical Debt on FICO Scores, FICO Blog (July 13, 2015),
https://www.fico.com/blogs/impact-medical-debt-ficor-scores.
See, e.g., Fed. Nat’l Mortg. Ass’n, Single Family Selling Guide, B3-2-03 (2021), https://sellingguide.fanniemae.com/#Public.20Records.2C.20Foreclosures.2C.20and.20Collection.20Accounts (noting that
“[c]ollection accounts reported as medical collections are not used in the DU [Desk Underwriter] risk assessment”);
Fed. Home Loan Mortg. Corp., The Single-Family Seller/Servicer Guide, 5201.1 (2022),
https://guide.freddiemac.com/app/guide/section/5201.1; U.S. Dep’t of Hous. & Urban Dev., Single Family Housing
Policy Handbook, 4000.1 (2021), https://www.hud.gov/sites/dfiles/OCHCO/documents/4000.1hsgh-112021.pdf. See
also The White House, Fact Sheet: The Biden Administration Announces New Actions to Lessen the Burden of
Medical Debt and Increase Consumer Protection (Apr. 11, 2022), https://www.whitehouse.gov/briefingroom/statements-releases/2022/04/11/fact-sheet-the-biden-administration-announces-new-actions-to-lessen-theburden-of-medical-debt-and-increase-consumer-protection/ (announcing changes to certain Federal government
underwriting standards to remove medical debt from evaluations of whether a consumer will repay a loan, including
those for the U.S. Department of Agriculture’s rural housing service loans and the Small Business Administration’s
loan programs and the Federal Housing Finance Authority’s review of credit models).
11

Pub. L. 108-159, 117 Stat. 1952 (2003).

determinations if certain conditions were met.12 And while Congress did permit the Agencies to
create exceptions, Congress mandated that the Agencies determine that any exception be
necessary and appropriate, and consistent with the congressional intent to restrict the use of
medical information for inappropriate purposes.13
When the Agencies issued the financial information exception to the statutory
prohibition, they did so without providing evidence or reasoning to support their main conclusion
that an exception from a congressionally created legal requirement was warranted.
Given the developments over the past decade in its understanding of how consumer
medical debt differs from other types of consumer debt and its uses in credit underwriting, the
CFPB, now with primary regulatory authority over the FCRA, has preliminarily determined that
the financial information exception to the creditor prohibition is neither warranted nor consistent
with the FACT Act’s purpose of protecting the privacy of consumers’ medical information. The
CFPB is proposing targeted amendments to Regulation V as follows:
•

Remove the financial information exception which broadly permits creditors to
obtain and use medical financial information (including information about
medical debt) in connection with credit eligibility determinations, while retaining
select elements of the exception related to income, benefits, and loan purpose; and

•

Limit the circumstances under which consumer reporting agencies are permitted
to furnish medical debt information to creditors in connection with credit
eligibility determinations.

These amendments would apply to any person that participates as a creditor in a
transaction, except for a person excluded from coverage by section 1029 of the Consumer
Financial Protection Act of 2010 (CFPA)14 (i.e., certain auto dealers). The term creditor has the

70 FR 70664 (Nov. 22, 2005).

15 U.S.C. 1681b(g)(5).

Pub. L. 111-203, 124 Stat. 1955, 2004 (2010).

same meaning as in section 702 of the Equal Credit Opportunity Act (ECOA).15 The
amendments would also apply to a consumer reporting agency as defined in section 603(f) of the
FCRA.16
Under the proposed rule, a creditor would no longer be able to obtain or use medical
information related to debts, expenses, assets, or collateral, in connection with a credit eligibility
determination, unless a specific exception otherwise applies to the creditor’s consideration of the
medical information. And a consumer reporting agency generally would be prohibited from
furnishing to a creditor a consumer report containing medical debt information in connection
with a credit eligibility determination.
As a result of these changes, consumers’ sensitive medical information would be
protected, and consumers would no longer be unfairly penalized in the credit market for having
medical debt. Consumers with and without medical debt would have equal access to credit at
comparable terms and debt collectors would have less leverage over consumers to pressure
consumers into paying medical debts that they may not owe.
C. Unique Characteristics of Medical Debt in the United States
A significant number of Americans have medical debt.17 According to one nationally
representative survey, in 2022 around 41 percent of adults stated that they had some kind of
medical debt, including debt that they were unable to pay, that was on credit cards, that was

ECOA is codified at 15 U.S.C. 1691 et seq.; ECOA section 702 is codified at 15 U.S.C. 1691a(e). The term
creditor means any person who regularly extends, renews, or continues credit; any person who regularly arranges for
the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the
decision to extend, renew, or continue credit.
15 U.S.C. 1681a(f). The term consumer reporting agency means any person which, for monetary fees, dues, or on
a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating
consumer credit information or other information on consumers for the purpose of furnishing consumer reports to
third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing
consumer reports.
For more information about medical debt in the United States, including population disparities, impacts on
consumers, and COVID-19 impacts, see Consumer Fin. Prot. Bureau, Medical Debt Burden in the United States
(Feb. 2022), https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-unitedstates_report_2022-03.pdf.
being paid over time, directly to a provider, or that they owed to family members, or to a bank,
collection agency, or other lender.18
Several characteristics of medical debt pose special risks to consumers and distinguish it
from other types of debt.19 The need for medical care can be unexpected,20 and medical debt
often results from bills for a one-time or short-term medical expense due to an unforeseen event
such as an accident or sudden illness.21 Consumers are rarely informed of the costs of medical
treatment in advance, and because of price opacity and an often immediate need for medical
care, consumers have little or no ability to ‘‘shop around.’’22 Americans that live in rural
communities may also experience limited choices when trying to access health care,23 which may
impact the amount of their medical debt in ways that are not reflective of their other debts.

Lunna Lopes et al., Kaiser Fam. Found., Health Care Debt In The U.S.: The Broad Consequences Of Medical And
Dental Bills (June 16, 2022), https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/
(reporting results of 2022 Kaiser Family Foundation Health Care Debt Survey, which polled 2,375 adults).
See generally Consumer Fin. Prot. Bureau, Bulletin 2022–01: Medical Debt Collection and Consumer Reporting
Requirements in Connection with the No Surprises Act, 87 FR 3025 (Jan. 20, 2022),
https://www.govinfo.gov/content/pkg/FR-2022-01-20/pdf/2022-01012.pdf; Consumer Fin. Prot. Bureau, Consumer
credit reports: A study of medical and non-medical collections, at 15-16, 38-42 (Dec. 2014),
https://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-non-medicalcollections.pdf.
See Consumer Fin. Prot. Bureau, Complaint Bulletin: Medical billing and collection issues described in consumer
complaints, at 7 (Apr. 2022), https://files.consumerfinance.gov/f/documents/cfpb_complaint-bulletin-medicalbilling_report_2022-04.pdf (describing consumer complaints received by the CFPB about unexpected medical care).
See Lunna Lopes et al., Kaiser Fam. Found., Health Care Debt in the U.S.: The Broad Consequences of Medical
and Dental Bills (June 16, 2022), https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/
(reporting survey results that 7 in 10 adults with health care debt say the debt arose from bills for a one-time or
short-term medical expense). But see Sara R. Collins et al., Commonwealth Fund, Paying for It: How Health Care
Costs and Medical Debt Are Making Americans Sicker and Poorer—Findings from the Commonwealth Fund 2023
Health Care Affordability Survey (Oct. 2023),
https://www.commonwealthfund.org/publications/surveys/2023/oct/paying-for-it-costs-debt-americans-sickerpoorer-2023-affordability-survey (about half of adults with medical debt say it is from treatment received for an
ongoing condition).
Consumer Fin. Prot. Bureau, Bulletin 2022–01: Medical Debt Collection and Consumer Reporting Requirements
in Connection with the No Surprises Act, 87 FR 3025 (Jan. 20, 2022), https://www.govinfo.gov/content/pkg/FR2022-01-20/pdf/2022-01012.pdf. See also Consumer Fin. Prot. Bureau, Complaint Bulletin: Medical billing and
collection issues described in consumer complaints, at 7-8 (Apr. 20, 2022), https://www.consumerfinance.gov/dataresearch/research-reports/complaint-bulletin-medical-billing-and-collection-issues-described-in-consumercomplaints/ (detailing consumer complaints received by the CFPB).
See, e.g., U.S. Gov’t Acct. Off., Health Care Capsule: Accessing Health Care in Rural America (May 2023),
https://www.gao.gov/assets/gao-23-106651.pdf (generally describing health care access challenges for rural
populations).
There are significant concerns with the accuracy of medical bills. For example,
43 percent of all adults and 53 percent of adults with medical debt in a nationally representative
survey believed they had received a medical or dental bill that included an error.24 While the
survey found that most of these adults had taken some action to dispute the mistake, 51 percent
reported that they either did not dispute the bill or were unable to successfully resolve their
dispute. This may be because medical billing and collections can be complicated and confusing
since a consumer may have difficulty determining whether the amount is covered by insurance or
a hospital’s financial assistance program (if applicable) and, if so, whether and to what extent the
amount was already paid or reduced.25 Also some health care providers and debt collectors
exploit these complications and charge inflated or unearned bills.26
D. Medical Debt and Consumer Reporting
Information about medical debt is used in different ways in the financial system.
Consumer reporting agencies play a key role in assembling and evaluating consumer credit and

See, e.g., Karen Pollitz & Kaye Pestaina, Kaiser Fam. Found., Could Consumer Assistance Be Helpful to People
Facing Medical Debt? (July 14, 2022), https://www.kff.org/policy-watch/could-consumer-assistance-be-helpful-topeople-facing-medical-debt/ (analyzing results of 2022 Kaiser Family Foundation Health Care Debt Survey).
See, e.g., Consumer Fin. Prot. Bureau, Medical Debt Burden in the United States, at 9-14 (Feb. 2022),
https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf
(describing issues with medical billing and collections practices); Consumer Fin. Prot. Bureau, Complaint Bulletin:
Medical billing and collection issues described in consumer complaints (Apr. 2022),
https://files.consumerfinance.gov/f/documents/cfpb_complaint-bulletin-medical-billing_report_2022-04.pdf.
Press Release, U.S. Dep’t of Just., Hospital Chain Will Pay Over $260 Million to Resolve False Billing and
Kickback Allegations; One Subsidiary Agrees to Plead Guilty (Sept. 25, 2018),
https://www.justice.gov/opa/pr/hospital-chain-will-pay-over-260-million-resolve-false-billing-and-kickbackallegations-one; Press Release, U.S. Atty’s Off. for C.D. Cal., Prime Healthcare Services and its CEO Agree to Pay
$65 Million to Settle Medicare Overbilling Allegations at 14 California Hospitals (Aug. 3, 2018),
https://www.justice.gov/usao-cdca/pr/prime-healthcare-services-and-its-ceo-agree-pay-65-million-settle-medicareoverbilling; Press Release, Off. of Pub. Affairs, U.S. Dep’t of Just., Clinical Laboratory and Its Owner Agree to Pay
an Additional $5.7 Million to Resolve Outstanding Judgement for Billing Medicare for Inflated Mileage-Based Lab
Technician Travel Allowance Fees (Aug. 1, 2023), https://www.justice.gov/opa/pr/clinical-laboratory-and-itsowner-agree-pay-additional-57-million-resolve-outstanding; Press Release, Off. of Pub. Affairs, U.S. Dep’t of Just.,
Physician Partners of America to Pay $24.5 Million to Settle Allegations of Unnecessary Testing, Improper
Remuneration to Physicians and a False Statement in Connection with COVID-19 Relief Funds (Apr. 12, 2022),
https://www.justice.gov/opa/pr/physician-partners-america-pay-245-million-settle-allegations-unnecessary-testingimproper; Erica Zucco, Providence will refund medical bills for thousands of patients after agreement with attorney
general, King 5 News (Feb. 1, 2024), https://www.king5.com/article/news/health/providence-forgive-137-millionmedical-payments-refund-20m-patients-after-agreement/281-3063dd66-ab54-413a-893a-73463f213a5b; Off. of the
Att’y Gen. of Va., Common Health Care Fraud Schemes, https://www.oag.state.va.us/contact-us/frequently-askedquestions?id=511 (last visited May 21, 2024).
other information on consumers27—including information about a consumer’s medical debt—
and in providing consumer reports to other companies for employment, housing, insurance, and
other decisions.28 Medical debt information on a consumer report can increase the cost and
reduce the availability of credit, and can even reduce access to employment and housing.29
Generally, information about a medical debt on a consumer report appears as a collection
tradeline. After a medical debt has been placed by the creditor in collections status because the
debt has been unpaid for a period of time, the medical debt may be furnished as a collections
tradeline to consumer reporting agencies by a debt collector, including a debt collector who
collects on behalf of the original creditor for a fee, as well as a debt collector who purchases
overdue accounts outright from the original creditor (also known as a debt buyer).30 Such
tradelines are referred to as medical collections or medical collections tradelines. Research by the
CFPB has found that nearly all medical collections furnishing is performed by debt collectors,
rather than by health care providers (as original creditors) themselves.31 However, a debt
collector may have limited access to an original creditor’s system of records, which may
contribute to higher dispute rates for collections tradelines compared to other components of
consumer reports.32 When debt collectors furnish to consumer reporting agencies, they generally
report to one or more of the three largest nationwide consumer reporting agencies (NCRAs).

See 15 U.S.C. 1681(a)(3).

See Consumer Fin. Prot. Bureau, Medical Debt Burden in the United States, at 26 n.117 (Feb. 2022),
https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf.
See Consumer Fin. Prot. Bureau, Data Point: Consumer Credit and the Removal of Medical Collections from
Credit Reports, at 2 (Apr. 2023), https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-removalmedical-collections-from-credit-reports_2023-04.pdf.
Payments made to medical balances not yet sent to collections generally are not furnished to consumer reporting
agencies.
Consumer Fin. Prot. Bureau, Market Snapshot: An Update on Third Party Debt Collections Tradelines Reporting,
at 5 (Feb. 2023), https://files.consumerfinance.gov/f/documents/cfpb_market-snapshot-third-party-debt-collectionstradelines-reporting_2023-02.pdf.
32

Id.

Debt collections tradelines may persist on consumer reports for up to seven years;33 however,
many collections tradelines are removed well in advance of seven years.34
Historically, medical debts have been the most common type of debt on consumer reports
at both the consumer-report and individual collections tradeline level. The CFPB estimated that
medical collections accounted for 57 percent of all collections tradelines in Q1 2022 and
58 percent in Q2 2018.35 When debt collectors acting as agents or assignees of health care
providers furnish information about medical collections, they must notify the consumer reporting
agency that they are furnishing medical information.36 The FCRA generally prohibits consumer
reporting agencies from reporting to third parties the name, address, and telephone number of the
health care provider for any account identified as from a medical information furnisher that has
notified the consumer reporting agency of its status, unless that information is restricted or coded
such that persons other than the consumer cannot identify or infer the specific provider or the
nature of the medical services provided.37 Nevertheless, despite the coding of information on the
consumer reports, a consumer report user could infer from the coding that certain debts relate to
the provision of health care. Like with medical bills, consumers often find errors with medical
collections tradeline information on their consumer reports. A CFPB analysis found that almost
6 percent of medical collections in its data were flagged as having been disputed at some point,

15 U.S.C. 1681c(a)(4).

Consumer Fin. Prot. Bureau, Consumer credit reports: A study of medical and non-medical collections, at 27
(Dec. 2014), https://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-non-medicalcollections.pdf.
Consumer Fin. Prot. Bureau, Market Snapshot: An Update on Third Party Debt Collections Tradelines Reporting,
at 16-17 (Feb. 2023), https://files.consumerfinance.gov/f/documents/cfpb_market-snapshot-third-party-debtcollections-tradelines-reporting_2023-02.pdf.
36

See 15 U.S.C. 1681s-2(a)(9).

15 U.S.C. 1681c(a)(6); see 15 U.S.C. 1681s-2(a)(9) (requiring medical information furnishers to notify consumer
reporting agencies of such status).
almost three times higher than the rate of dispute flags on credit cards and seven times the rate of
dispute flags on student loans.38
A 2022 review of consumer complaints submitted to the CFPB found that many
consumers complaining of disputed debt collection attempts reported first learning of the debt
from viewing their consumer report. Consumers expressed concern with inaccurate information
leading to a decrease in their credit score. Some consumers reported paying debt they did not
believe they owed in order to have the tradeline removed from their consumer report.39
Some of the errors in medical collections tradelines could be due to debt collection
furnishing practices. Some medical debt collectors previously used debt collection furnishing to
engage in a practice known as “debt parking,” or “passive collection.” Debt collectors would
report a debt to a consumer reporting agency, then wait for the consumer to notice the tradeline
when, for example, applying for credit. The consumer may then pay the debt, possibly without
raising any dispute as to any errors in order to access needed credit. The CFPB issued final rules
on debt collection, which took effect November 30, 2021, that addressed this practice by
requiring a debt collector to take certain actions intended to convey information about the debt to
the consumer before furnishing information on that debt to a consumer reporting agency.40
Despite the protections offered by these rules, CFPB investigations indicate that some medical
debt collectors may still be attempting to collect on medical debts that were not substantiated
after consumers disputed the validity of the debts.41

Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on Consumer Credit Reports (July 27,
2022), https://www.consumerfinance.gov/data-research/research-reports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/.
Consumer Fin. Prot. Bureau, Complaint Bulletin: Medical billing and collection issues described in consumer
complaints (Apr. 2022), https://files.consumerfinance.gov/f/documents/cfpb_complaint-bulletin-medicalbilling_report_2022-04.pdf.
40

See 12 CFR 1006.30(a).

See Consumer Fin. Prot. Bureau, CFPB Takes Action Against Phoenix Financial Services for Illegal Medical Debt
Collection and Credit Reporting Practices (June 8, 2023), https://www.consumerfinance.gov/aboutus/newsroom/cfpb-takes-action-against-phoenix-financial-services-for-illegal-medical-debt-collection-and-credit41

Recent reporting changes announced by the NCRAs in 2022 and 2023 have begun to
reduce the amount of medical debt reported on consumer reports and benefit some consumers.
Specifically, the NCRAs announced that, starting on July 1, 2022, unpaid medical collections
will not appear on a consumer’s report for up to one year (an increase from 180 days), and paid
medical collections will no longer be on consumer reports.42 In April 2023, the NCRAs also
announced that medical collections with initial balances below $500 had been removed from
consumer reports.43
The CFPB conducted an analysis of the impacts of the NCRAs’ medical debt reporting
changes through June 2023.44 The CFPB found that after these changes, 15 million Americans
still have $49 billion in medical bills on their consumer reports. Because the medical collections
tradelines removed by the NCRAs were those with low balances, the total dollar balances of
medical collections on consumer reports fell by only 38 percent nationwide.

reporting-practices/; Consumer Fin. Prot. Bureau, CFPB Shuts Down Commonwealth Financial Systems for Illegal
Debt Collection Practices (Dec. 15, 2023), https://www.consumerfinance.gov/about-us/newsroom/cfpb-shuts-downcommonwealth-financial-systems-for-illegal-debt-collection-practices/.
Equifax, First Changes to Reporting of Medical Collection Debt Roll Out July 1, 2022 (July 1, 2022),
https://www.equifax.com/newsroom/all-news/-/story/first-changes-to-reporting-of-medical-collection-debt-roll-outjuly-1-2022; Experian, First Changes to Reporting of Medical Collection Debt Roll Out July 1, 2022 (July 1, 2022),
https://www.experianplc.com/newsroom/press-releases/2022/first-changes-to-reporting-of-medical-collection-debtroll-out-july-1-2022; TransUnion, First Changes to Reporting of Medical Collection Debt Roll Out July 1, 2022
(July 1, 2022), https://newsroom.transunion.com/first-changes-to-reporting-of-medical-collection-debt-roll-out-july1-2022/.
PR Newswire, Equifax, Experian and TransUnion Remove Medical Collections Debt Under $500 From U.S.
Credit Reports (Apr. 11, 2023), https://www.prnewswire.com/news-releases/equifax-experian-and-transunionremove-medical-collections-debt-under-500-from-us-credit-reports-301793769.html.
Ryan Sandler & Zachary Blizard, Consumer Fin. Prot. Bureau, Recent Changes in Medical Collections on
Consumer Credit Records Data Point, at 3-4, 17 (Mar. 2024),
https://files.consumerfinance.gov/f/documents/cfpb_recent-changes-medical-collections-on-consumer-creditreports_2024-03.pdf.
Several States and at least one Federal agency have also enacted policies that limit the
inclusion of medical debt on consumer reports.45 For example, Colorado46 and New York47 each
passed laws in 2023 prohibiting medical debts from appearing on consumer reports. Connecticut
and Virginia followed suit earlier this year.48 Illinois and Minnesota state legislatures have also
passed similar legislation pending signature from their States’ governors.49 Maine, in 2019,
passed a law requiring consumer reporting agencies to remove medical debt upon receiving
reasonable evidence that the debt has been settled or paid.50 In 2022, the U.S. Department of
Veterans Affairs (VA) finalized a rule providing that the VA will report medical debt to
consumer reporting agencies only if all other debt collection efforts have been exhausted, the
individual is not catastrophically disabled or entitled to free medical care from the VA, and the
outstanding debt is over $25.51
E. Current Use of Medical Debt in Credit Scoring and Underwriting
Collections tradelines are considered negative information and can lower consumers’
credit scores. A 2014 CFPB analysis found that the presence of medical collections tradelines on
consumer reports are less predictive of future defaults or serious delinquencies than the presence
of nonmedical collections tradelines, and that consumers with paid medical debts have
delinquency rates well below those of consumers with the same credit scores whose medical

In 2022, the CFPB issued an interpretive rule clarifying that because FCRA’s express preemption provisions have
a narrow and targeted scope, States retain substantial flexibility to pass laws involving consumer reporting to reflect
emerging problems affecting their local economies and citizens, including problems related to medical debt.
Consumer Fin. Prot. Bureau, The Fair Credit Reporting Act’s Limited Preemption of State Laws, 87 FR 41042 (July
11, 2022).
46

Colo. Rev. Stat. section 5-18-109.

N.Y. Pub. Health Law art. 49-A.

2024 Conn. Act 24-6; 2024 Va. Acts ch. 751.

See Forest Nelson, Medical debt may no longer negatively impact your credit in Illinois, WIFR (May 16, 2024),
https://www.wifr.com/2024/05/16/medical-debt-may-no-longer-negatively-impact-your-credit-illinois/; Off. of
Minn. Att’y Gen. Keith Ellison, Attorney General Ellison commends Senate for final passage of the Debt Fairness
Act (May 16, 2024), https://www.ag.state.mn.us/Office/Communications/2024/05/16_DebtFairnessAct.asp.
50

Consumer Data Indus. Ass’n v. Frey, 26 F.4th 1 (1st Cir. 2022), cert. denied, 143 S. Ct. 777 (2023).

U.S. Dep’t of Veterans Affairs, Threshold for Reporting VA Debts to Consumer Reporting Agencies, 87 FR 5693
(Feb. 2, 2022).
debts were mostly unpaid.52 Following the CFPB’s publication of its research and in recognition
of the limited predictive value of medical bills, major credit score providers FICO and
VantageScore made changes so that newer versions of their credit scoring models differentiate
between medical and nonmedical collections tradelines, give less weight to unpaid medical
collections tradelines than to other collections tradelines, and ignore paid medical collections of
any kind.53 In January 2023, VantageScore implemented changes to VantageScore models 3.0
and 4.0 to ignore all medical collections tradelines.54
Older FICO scoring models that do not differentiate between medical and nonmedical
collections tradelines, however, remain common in the market. For example, while the
Government-Sponsored Enterprises (GSEs), the Federal National Mortgage Association (Fannie
Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal
Housing Administration generally do not consider medical debt in their credit risk assessments
within their respective automated underwriting systems,55 the GSEs require creditors to provide
credit scores derived from the older Classic FICO56 for each borrower on a loan that the GSEs
purchase to assess eligibility for certain loan products and make certain pricing decisions.57 The

Kenneth P. Brevoort & Michelle Kambara, Consumer Fin. Prot. Bureau, Data point: Medical debt and credit
scores (May 2014), https://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-creditscores.pdf.
See Ethan Dornhelm, The Impact of Medical Debt on FICO Scores, FICO Blog (July 13, 2015),
https://www.fico.com/blogs/impact-medical-debt-ficor-scores; VantageScore, How will changes in how medical
collection accounts get reported impact credit scores? (July 5, 2022), https://www.vantagescore.com/how-willchanges-in-how-medical-collection-accounts-get-reported-impact-credit-scores/.
See AnnaMaria Andriotis, Major Credit-Score Provider to Exclude Medical Debts, Wall St. J. (Aug. 10, 2022),
https://www.wsj.com/articles/major-credit-score-provider-to-exclude-medical-debts-11660102729 (VantageScore
CEO quoted as saying that having medical debt is not necessarily reflective of a consumer’s ability to pay back a
loan).
See Fed. Nat’l Mortg. Ass’n, Single Family Selling Guide, B3-2-03 (2021), https://sellingguide.fanniemae.com/#Public.20Records.2C.20Foreclosures.2C.20and.20Collection.20Accounts (noting that
“[c]ollection accounts reported as medical collections are not used in the DU risk assessment”); Fed. Home Loan
Mortg. Corp., The Single-Family Seller/Servicer Guide, 5201.1 (2022),
https://guide.freddiemac.com/app/guide/section/5201.1; U.S. Dep’t of Hous. & Urban Dev., Single Family Housing
Policy Handbook, 4000.1 (2021), https://www.hud.gov/sites/dfiles/OCHCO/documents/4000.1hsgh-102021.pdf.
The Classic FICO score is comprised of the following models: Equifax Beacon® 5.0, Experian/Fair Isaac Risk
Model V2SM, and TransUnion FICO® Risk Score, Classic 04.
See, e.g., Fed. Nat’l Mortg. Ass’n, Single Family Selling Guide (Oct. 5, 2022), https://sellingguide.fanniemae.com/sel/b3-5.1-01/general-requirements-credit-scores.
GSEs and the Federal Housing Finance Agency (FHFA) announced in 2022 that they had
validated and approved two of the new credit score models that lessen the weight or do not
consider medical collections, but that transition is not expected to occur until the fourth quarter
of 2025.58
II. Statutory and Regulatory History
A. Fair Credit Reporting Act
The FCRA was enacted in 1970 and was one of the world’s first data privacy laws. The
law was enacted after growing public concern about the lack of regulation concerning the
widespread dissemination of sensitive information about Americans. One of Congress’ main
purposes in passing the FCRA was a respect for the consumer’s right to privacy.59 The law has
been amended several times in the ensuing years, including by the FACT Act.60 The FCRA
governs the collection, assembly, and use of consumer report information and provides the
framework for the consumer reporting system in the United States. The FCRA regulates the
practices of consumer reporting agencies that collect and compile consumer information into
consumer reports for use by creditors, insurance companies, employers, landlords, and other
entities in making eligibility decisions affecting consumers. The FCRA also limits the
circumstances under which persons, such as creditors, may obtain and use consumer report
information from consumer reporting agencies.
The FCRA was enacted to (1) prevent the misuse of sensitive consumer information by
limiting recipients to those who have a legitimate need for it; (2) improve the accuracy and
integrity of consumer reports; and (3) promote the efficiency of the nation’s banking and

Fed. Hous. Fin. Agency, FHFA Announces Key Updates for Implementation of Enterprise Credit Score
Requirements (Feb. 29, 2024), https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Key-Updatesfor-Implementation-of-Enterprise-Credit-Score-Requirements.aspx.
59

FCRA section 602(a)(4) (15 U.S.C. 1681(a)(4)).

Pub. L. 108-159 (Dec. 4, 2003). Congress also enacted specific protections for servicemembers and veterans,
including with respect to medical debt and credit monitoring. Economic Growth, Regulatory Relief, and Consumer
Protection Act, Pub. L. 115-174, section 302, 132 Stat. 1296, 1333 (2018).
consumer credit systems.61 An important purpose of the FCRA is to enable creditors to make
appropriate credit decisions based on accurate consumer reporting information that truly reflects
whether a consumer will repay a loan, while simultaneously protecting the privacy of consumer
data.62
The FCRA protects consumer privacy in multiple ways, including by clearly prohibiting
certain uses of data. The law limits the circumstances under which consumer reporting agencies
may disclose consumer information. For example, FCRA section 604, entitled Permissible
purposes of consumer reports, identifies an exclusive list of permissible purposes for which
consumer reporting agencies may provide consumer reports.63 The statute states that a consumer
reporting agency may provide consumer reports under these circumstances “and no other.” In
addition, FCRA section 607(a) requires that “[e]very consumer reporting agency shall maintain
reasonable procedures designed to . . . limit the furnishing of consumer reports to the purposes
listed under section 604.”64
In addition to imposing permissible purpose limitations on consumer reporting agencies,
the FCRA limits the circumstances under which third parties may obtain and use consumer
report information from consumer reporting agencies. FCRA section 604(f) provides that a
person shall not use or obtain a consumer report unless the consumer report is obtained for a
purpose for which the consumer report is authorized to be furnished under FCRA section 604

Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007); see also 15 U.S.C. 1681(a)(4) (recognizing “a need to
insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect
for the consumer’s right to privacy”).
62

S. Rep. No. 91-517, at 1 (1969); see also Trans Union Corp. v. FTC, 81 F.3d 228, 234 (D.C. Cir. 1996).

15 U.S.C. 1681b(a). Other sections of the FCRA identify additional limited circumstances under which consumer
reporting agencies are permitted or required to disclose certain information to government agencies. See 15 U.S.C.
1681f, 1681u, 1681v. Further, the Debt Collection Improvement Act of 1996, Pub. L. 104-134, 110 Stat. 1321,
section 31001(m)(1), allows the head of an executive, judicial, or legislative agency to obtain a consumer report
under certain circumstances relating to debt collection. See 31 U.S.C. 3711(h).
64

15 U.S.C. 1681e(a).

and the purpose is certified in accordance with FCRA section 607 by a prospective user of the
report.65
The FCRA’s permissible purpose provisions are thus a key component to the statute’s
protection of consumer privacy. Consumers suffer harm when consumer reporting agencies
provide consumer reports to persons who are not authorized to receive the information or when
recipients of consumer reports obtain or use such reports for purposes other than permissible
purposes. These harms include the invasion of consumers’ privacy, as well as reputational,
emotional, physical, and economic harms.
B. Fair and Accurate Credit Transactions Act of 2003 and implementing regulations
Congress passed the FACT Act and it became law on December 4, 2003.66 Congress,
through the FACT Act, amended the FCRA to include additional protections for consumer
privacy, such as restricting the use and transfer of sensitive medical information, enhancing the
ability of consumers to combat identity theft, increasing the accuracy of consumer reports, and
allowing consumers to exercise greater control regarding the type and amount of marketing
solicitations they receive.67
Congress added, in FCRA section 604(g)(2), a broad new limitation on the ability of
creditors to obtain or use medical information pertaining to a consumer in connection with any
determination of the consumer’s eligibility, or continued eligibility, for credit.68 Congress also
limited the circumstances under which consumer reporting agencies could furnish consumer
reports containing medical information for credit, employment, or insurance purposes,69 and

15 U.S.C. 1681b(f).

Pub. L. 108-159, 117 Stat. 1952 (2003).

H. Rep. No. 108-396, at 1 (2003) (Conf. Rep.); S. Rep. No. 108-166, at 3 (2003) (Conf. Rep.).

FACT Act sections 411(a), 412(f)(2), 117 Stat. 1999-2000, 2003 (15 U.S.C. 1681b(g)(2)). FCRA section
604(g)(2) provides: “Except as permitted pursuant to paragraph (3)(C) or regulations prescribed under paragraph
(5)(A), a creditor shall not obtain or use medical information (other than medical information treated in the manner
required under section 1681c(a)(6) of this title) pertaining to a consumer in connection with any determination of the
consumer’s eligibility, or continued eligibility, for credit.” 15 U.S.C. 1681b(g)(2).
69

FACT Act section 411(a), 117 Stat. 2000 (15 U.S.C. 1681b(g)(1)).

generally required consumer reporting agencies providing consumer reports not to furnish
contact information for medical information furnishers—who were also required to identify
themselves to consumer reporting agencies70—without restrictions or coding “that do not
identify, or provide information sufficient to infer, the specific provider or the nature of such
services, products, or devices to a person other than the consumer.”71 Congress also broadly
defined medical information in FCRA section 603(i) to include “information or data . . . created
or derived from a health care provider or the consumer, that relates to . . . the payment for the
provision of health care to an individual.”72
Congress initially granted rulemaking authority to the Agencies to make exceptions to the
limitation on creditors obtaining and using medical information that are necessary and
appropriate to protect legitimate operational, transactional, risk, consumer, and other needs
(including administrative verification purposes), consistent with congressional intent to restrict
the use of medical information for inappropriate purposes.73 Pursuant to this authority, the
Agencies promulgated final rules that, among other things, implemented the statute’s general
prohibition on creditors obtaining or using medical information pertaining to a consumer in
connection with any determination of the consumer’s eligibility, or continued eligibility, for
credit and created exceptions to the prohibition.74
The Agencies’ final rules contain the financial information exception for creditors
obtaining and using medical information in credit eligibility determinations.75 The financial
information exception consists of a three-part test which allows creditors to use medical
information in connection with credit eligibility determinations so long as (1) the information is

FACT Act section 412(a), 117 Stat. 2002 (15 U.S.C. 1681s-2(a)(9)).

FACT Act section 412(b), 117 Stat. 2002 (15 U.S.C. 1681c(a)(6)).

FACT Act section 411(c), 117 Stat. 2001 (15 U.S.C. 1681a(i)).

FACT Act section 411(a), 117 Stat. 2001 (15 U.S.C. 1681b(g)(5)(A)).

70 FR 70664 (Nov. 22, 2005). See also interim final rules published at 70 FR 33958 (June 10, 2005).

70 FR 70664, 70667 (Nov. 22, 2005).

the type of information routinely used in making credit eligibility determinations; (2) the creditor
uses the information in a manner and to an extent no less favorably than comparable nonmedical
information; and (3) the creditor does not take the consumer’s physical, mental, or behavioral
health, condition or history, type of treatment, or prognosis into account when making the
determination. The Agencies stated that the “three-part test strikes a balance between permitting
creditors to obtain and use certain medical information about consumers when necessary and
appropriate to satisfy prudent underwriting criteria and to ensure that credit is extended in a safe
and sound manner, while restricting the use of medical information for inappropriate
purposes.”76 Although the Agencies explained the boundaries of their three-part test, and gave
responses to commenters on various examples, they did not provide evidence or reasoning to
support the main conclusion that an exception from a congressionally created legal requirement
was warranted, other than a single conclusory sentence in the proposed rule stating that “[a]
creditor should not be prohibited from obtaining or using information about a debt, for example,
in connection with making a credit decision, just because that debt happens to be for medical
products or services.”77
The Agencies’ final rules also identified a limited number of other particular purposes for
which a creditor may use medical information in connection with any determination of the
consumer’s eligibility, or continued eligibility, for credit.78 For example, a creditor may use
medical information in credit eligibility determinations to comply with applicable requirements
of local, State, or Federal laws.79 The Agencies found that this exception, and the other
enumerated specific exceptions, are necessary and appropriate to protect legitimate operational,
transactional, risk, consumer, and other needs (including administrative verification purposes),

69 FR 23380, 23384 (Apr. 28, 2004).

Id.

70 FR 70664, 70668 (Nov. 22, 2005).

This exception is restated at § 1022.30(e)(1)(ii).

and are consistent with the congressional intent to restrict the use of medical information for
inappropriate purposes.80
Congress (through the CFPA) transferred to the CFPB primary regulatory authority for
the FCRA.81 The CFPB restated the Agencies’ regulations as an interim final rule, with request
for comment, on December 21, 2011.82 On April 28, 2016, the CFPB finalized the interim final
rule without assessing or otherwise reconsidering the policy decisions and justifications that
served as the basis for the regulations.83
III.Prior Proceedings, Stakeholder Outreach, and Consultation
A. Small Business Advisory Review Panel
Pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA),84 the CFPB issued its Outline of Proposals and Alternatives under Consideration
(Outline or SBREFA Outline).85 The SBREFA Outline addressed a number of consumer
reporting topics under the FCRA, including medical debt collections information proposals under
consideration. The CFPB convened a SBREFA Panel on October 16, 2023, and held Panel
meetings on October 18 and 19, 2023.86 Representatives from 16 small businesses were selected
as small entity representatives for this SBREFA process. These entities represented small
businesses that the CFPB determined would likely be directly affected by one or more of the
proposals under consideration. On December 15, 2023, the Panel completed the Final Report of

69 FR 23380, 23382 (Apr. 28, 2004).

Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376,
1955 (2010).
82

76 FR 79308 (Dec. 21, 2011).

81 FR 25323 (Apr. 28, 2016).

Pub. L. 104-121, 110 Stat. 857 (1996).

Consumer Fin. Prot. Bureau, Small Business Advisory Review Panel for Consumer Reporting Rulemaking Outline
of Proposals and Alternatives Under Consideration (Sept. 15, 2023),
https://files.consumerfinance.gov/f/documents/cfpb_consumer-reporting-rule-sbrefa_outline-of-proposals.pdf.
The Panel was comprised of a representative from the CFPB, the Chief Counsel for Advocacy of the Small
Business Administration (Office of Advocacy), and a representative from the Office of Information and Regulatory
Affairs (OIRA) in the Office of Management and Budget.
the Small Business Review Panel on the CFPB’s Proposals and Alternatives Under
Consideration for the Consumer Reporting Rulemaking (Panel Report or SBREFA Report).87 In
addition to the SBREFA Panel and Panel Report, the CFPB also invited feedback on the
proposals under consideration from other stakeholders, including small stakeholders who were
not small entity representatives.88 The CFPB has considered the feedback related to the medical
debt collection information proposals from small entity representatives and other stakeholders, as
well as the findings and recommendations of the Panel in preparing this proposed rule.
B. Other Stakeholder Outreach
The CFPB has long been engaged in outreach and research related to medical debt
information in the consumer reporting ecosystem. In 2013, the CFPB and FTC jointly hosted a
public roundtable for industry and other stakeholders on the integrity of record keeping by debt
collectors, debt buyers, and original creditors. Participants acknowledged that record keeping
practices may introduce variability or inaccuracy to the consumer reporting systems.89 In
December 2014, following the CFPB’s publication of its research report, Data Point: Medical
Debt and Credit Scores,90 the CFPB issued a study of medical and nonmedical collections
tradelines on consumer reports that assessed the furnishing practices of debt collectors and debt
buyers, the incidence and type of collections tradelines on consumer reports, and differences
between medical and nonmedical debt reporting.91 The CFPB has continued to monitor the

Consumer Fin. Prot. Bureau, Final Report of the Small Business Review Panel on the CFPB’s Proposals and
Alternatives Under Consideration for the Consumer Reporting Rulemaking (Dec. 15, 2023),
https://files.consumerfinance.gov/f/documents/cfpb_sbrefa-final-report_consumer-reporting-rulemaking_202401.pdf. As required under SBREFA, the CFPB considers the Panel’s findings in its IRFA, as set out in part VIII.B
below.
88

See SBREFA Outline at 5.

Fed. Trade Comm’n & Consumer Fin. Prot. Bureau, Roundtable on Data Integrity in Debt Collection: Life of a
Debt (2013), https://www.ftc.gov/news-events/events/2013/06/life-debt-data-integrity-debt-collection.
See Kenneth P. Brevoort & Michelle Kambara, Consumer Fin. Prot. Bureau, Data point: Medical debt and credit
scores (May 2014), https://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-creditscores.pdf.
Consumer Fin. Prot. Bureau, Consumer credit reports: A study of medical and non-medical collections (Dec.
2014), https://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-non-medicalcollections.pdf.
incidence of medical debt on consumer reports and released several other market analyses and
research reports on medical debt collection and consumer reporting between 2019 and 2024.92
Prior to issuing this proposed rule and in accordance with CFPA section 1022(b)(2)(B),
the CFPB consulted with staff from various Federal agencies to discuss aspects of its proposal.
Specifically, the CFPB met with staff from the Board of Governors of the Federal Reserve
System, the Office of Comptroller of the Currency, the Federal Deposit Insurance Corporation,
the National Credit Union Administration (NCUA), the Federal Trade Commission, the
Department of Health and Human Services, Department of Housing and Urban Development, the
FHFA, the Small Business Administration, the VA, and the Department of Agriculture.
IV. Legal Authority
A. CFPA Section 1022(b)
Section 1022(b)(1) of the CFPA authorizes the CFPB to prescribe rules “as may be
necessary or appropriate to enable the [CFPB] to administer and carry out the purposes and
objectives of the Federal consumer financial laws, and to prevent evasions thereof.”93 The term
“Federal consumer financial laws” includes the “enumerated consumer laws,” which include the
FCRA.94
Section 1022(b)(2) of the CFPA prescribes certain standards for rulemaking that the
CFPB must follow in exercising its authority under section 1022(b)(1).95 For a discussion of the
CFPB’s standards for rulemaking under CFPA section 1022(b)(2), see part VII below.

Consumer Fin. Prot. Bureau, Market Snapshot: Third-Party Debt Collections Tradeline Reporting (July 2019),
https://files.consumerfinance.gov/f/documents/201907_cfpb_third-party-debt-collections_report.pdf; Consumer Fin.
Prot. Bureau, Market Snapshot: An Update on Third-Party Debt Collections Tradeline Reporting (Feb. 2023),
https://files.consumerfinance.gov/f/documents/cfpb_market-snapshot-third-party-debt-collections-tradelinesreporting_2023-02.pdf; Ryan Sandler & Zachary Blizard, Consumer Fin. Prot. Bureau, Recent Changes in Medical
Collections on Consumer Credit Records Data Point, at 3-4, 17 (Mar. 2024),
https://files.consumerfinance.gov/f/documents/cfpb_recent-changes-medical-collections-on-consumer-creditreports_2024-03.pdf.
93

12 U.S.C. 5512(b)(1).

See 12 U.S.C. 5481(12), (14).

See 12 U.S.C. 5512(b)(2).

B. FCRA Sections 621(e) and 604(g)(5)
Effective July 21, 2011, section 1088 of the CFPA made conforming amendments to the
FCRA transferring rulemaking authority under much of the FCRA, except those regulations
applicable to certain motor vehicle dealers, to the CFPB. Section 621(e) of the FCRA authorizes
the CFPB to issue regulations as “necessary or appropriate to administer and carry out the
purposes and objectives of [the FCRA], and to prevent evasions thereof or to facilitate
compliance therewith.”96
FCRA section 604(g)(5) specifically authorizes the CFPB to prescribe regulations to
create exceptions from the statutory prohibition on obtaining or using medical information in
connection with determinations of credit eligibility, but only if the CFPB determines such
exceptions to the general prohibition in FCRA section 604(g)(2) are necessary and appropriate to
protect legitimate operational, transactional, risk, consumer, and other needs (including
administrative verification purposes), consistent with the congressional intent to restrict the use
of medical information for inappropriate purposes.97 Because the CFPB has preliminarily
determined that a regulatory exception for certain financial information is not necessary and
appropriate to protect legitimate operational, transactional, risk, consumer, and other needs
(including administrative verification purposes), the CFPB is proposing to remove the exception.
This would ensure that only exceptions that are necessary and appropriate, consistent with the
CFPB’s rulemaking authority under FCRA section 604(g)(5), remain in § 1022.30.

See CFPA section 1088(a)(10)(E) (15 U.S.C. 1681s(e)).

15 U.S.C. 1681b(g)(5).

V. Discussion of the Proposed Rule
A. Removal of the Financial Information Exception to the Creditor Prohibition On Obtaining or
Using Medical Information
Current § 1022.30(b) incorporates the creditor prohibition in section 604(g)(2) of the
FCRA.98 The creditor prohibition restricts creditors from obtaining or using (i.e., considering)
medical information pertaining to a consumer in connection with any determination of the
consumer’s eligibility, or continued eligibility, for credit. There are exceptions to this prohibition
in current § 1022.30(d) and (e). The CFPB proposes to remove the exception at § 1022.30(d) (the
financial information exception) to the creditor prohibition. As explained in part V.A.3, Medical
information related to income, benefits, or the purpose of the loan, the CFPB proposes to retain
certain elements of the financial information exception related to income, benefits, and purpose
of the loan by moving relevant provisions to the list of specific exceptions to the creditor
prohibition at § 1022.30(e). The CFPB also proposes conforming amendments to § 1022.30(c) to
remove the reference to the § 1022.30(d) financial information exception.
Congress put in place strong privacy protections for consumers’ medical information in
the FCRA, including by enacting the creditor prohibition through FCRA section 604(g)(2).99
Congress also provided additional protections by stipulating that the CFPB may permit
exceptions to the creditor prohibition only when the CFPB has determined the exceptions to be
“necessary and appropriate to protect legitimate operational, transactional, risk, consumer, and
other needs . . . consistent with the intent of [FCRA section 604(g)(2)] to restrict the use of
medical information for inappropriate purposes.”100

FCRA section 604(g)(2) (15 U.S.C. 1681b(g)(2)).

As described above, Congress also limited the circumstances under which consumer reporting agencies can
provide consumer reports containing medical information for credit, employment, or insurance purposes, and
required consumer reporting agencies to restrict or code contact information for medical information furnishers.
15 U.S.C. 1681b(g)(1), 1681c(a)(6).
100

15 U.S.C. 1681b(g)(5).

Consistent with the general creditor prohibition in FCRA section 604(g)(2), current
§ 1022.30(b)(1) provides that “[a] creditor may not obtain or use medical information pertaining
to a consumer in connection with any determination of the consumer’s eligibility, or continued
eligibility, for credit, except as provided in this section.” In 2005, before the CFPA transferred
primary regulatory authority for the FCRA to the CFPB, the Agencies adopted the exceptions to
this prohibition that are now codified in § 1022.30(d) (the financial information exception) and
(e) (listing specific exceptions).
The financial information exception allows a creditor to consider medical information
pertaining to a consumer in connection with any determination of the consumer’s eligibility, or
continued eligibility, for credit if the conditions of the following three-part test are met: (1) the
information is the type routinely used in making credit eligibility determinations, such as
information relating to debts, expenses, income, benefits, assets, collateral, or the purpose of the
loan, including the use of proceeds; (2) the creditor uses the medical information in a manner and
to an extent no less favorable than it would use comparable information that is not medical
information; and (3) the creditor does not take the consumer’s physical, mental, or behavioral
health, condition or history, type of treatment, or prognosis into account as part of the credit
eligibility determination.101
The predecessor Agencies explained their belief that the financial information exception
struck a balance between permitting creditors to obtain and use certain medical information
about consumers when necessary and appropriate to satisfy prudent underwriting criteria and
ensuring that credit is extended in a safe and sound manner, while restricting the use of medical
information for inappropriate purposes.102 However, the Agencies did not cite evidence or
provide analysis in support of this statement of their conclusion.

12 CFR 1022.30(d)(1).

Fair Credit Reporting Medical Information Regulations (2004 NPRM), 69 FR 23380, 23384 (Apr. 28, 2004).

1. Medical Information Related to Debts
The financial information exception permits a creditor to consider certain medical
information related to a consumer’s debts in connection with any determination of the
consumer’s eligibility, or continued eligibility, for credit.103 Medical information related to
medical debt includes, for example, “[t]he dollar amount, repayment terms, repayment history,
and similar information regarding medical debts to calculate, measure, or verify the repayment
ability of the consumer, the use of proceeds, or the terms for granting credit”104 and “[t]he
identity of creditors to whom outstanding medical debts are owed in connection with an
application for credit, including but not limited to, a transaction involving the consolidation of
medical debts”105 (collectively referred to herein as financial information). By proposing to
eliminate the financial information exception, the CFPB would prohibit creditors from
considering, in connection with credit eligibility determinations, such financial information
related to consumers’ medical debts, unless one of the specific exceptions in proposed
§ 1022.30(e) applies.
Owes or Owed to a Health Care Provider
The FCRA section 603(i) definition of “medical information,” incorporated in
Regulation V at § 1022.3(k), informs the types of medical debt that creditors are generally
prohibited from considering, but for which the financial information exception currently applies.
Medical information is defined as “[i]nformation or data, whether oral or recorded, in any form
or medium, created by or derived from a health care provider or the consumer” that relates to,
among other things, “[t]he payment for the provision of health care to an individual.”
With regard to “[t]he payment for the provision of health care to an individual”—i.e., the
subset of “medical information” concerning debt—the CFPB has preliminarily interpreted FCRA

12 CFR 1022.30(d)(1)(i).

12 CFR 1022.30(d)(2)(i)(A).

12 CFR 1022.30(d)(2)(i)(D).

section 603(i) to mean that medical information about a consumer’s debt must relate to a debt the
consumer owes, or at one time owed (for example, in the case of paid medical debt), directly to a
health care provider or to the health care provider’s agent or assignee.106 Specifically, the statute
provides that medical information is information or data “created by or derived from a health
care provider or the consumer” that relates to “the payment for the provision of health care to an
individual.” The CFPB has preliminarily interpreted the statute’s use of the phrase “provision of
health care,” following the requirement that the medical information must be “created by or
derived from a health care provider or the consumer,” to mean that for information on a debt to
be medical information under the FCRA, the information must relate to a debt arising from a
payment obligation that the consumer owes (or at one time owed) directly to a health care
provider for the provision of the health care underlying the payment obligation.
The CFPB’s interpretation also includes medical debt that has been sold or resold to a
debt buyer, who has become the health provider’s assignee for the debt, because the payment
obligation that was sold was created by a health care provider and at one time was owed to the
health care provider. It would also include medical debt that has been assigned to a third-party
debt collector, who is acting as an agent on behalf of the health care provider or debt buyer, to
whom the debt is owed.107 Further, it would include medical information in the form of a civil
judgment arising from a debt collection action as to a medical debt directly owed to a health care
provider or debt buyer, whether provided on a consumer report, by the consumer on a credit
application, or if the creditor learns of the civil judgment through other means; a credit score that

The CFPB uses the word “owed” to refer to the characterization of the debt by the health care provider or its
agent or assignee. As discussed in part I.C, Unique characteristics of medical debt in the United States, the
American medical billing system is byzantine and consumers frequently find errors with their medical bills and with
medical collections tradeline information on their consumer reports. Accordingly, in some instances consumers may
not truly “owe” the debt in question.
Cf. 15 U.S.C. 1681s-2(a)(9) (providing that the term “medical information furnisher” includes the “agent or
assignee” of a medical provider).
had weighed medical debt information; and debts arising from medical care that is elective, or
otherwise not medically necessary (e.g., some cosmetic surgeries).
Because medical information on a consumer’s debt must relate to a debt the consumer
owes (or owed) directly to a health care provider under the CFPB’s preliminary interpretation,
medical debt would not include a debt owed to a third-party lender (including a medical credit
card issuer whose products are offered specifically for the payment of medical services or
general purpose credit card issuer), from whom a consumer took out a loan to pay medical
expenses or bills. Such loans are new debt obligations used to pay the medical debt obligation
owed to a health care provider. The CFPB also preliminarily concludes that debts owed to such
third-party lenders are distinguishable from debts that health care providers have sold to debt
buyers because medical debts are assigned to such debt buyers, but not to third-party lenders.
The CFPB seeks comment on its approach and also seeks comment on whether, in the
alternative, the CFPB should consider information about debts generally incurred to pay for
medical bills and expenses to be “medical information” that is “derived” from a health care
provider or consumer. And, the CFPB also seeks comment on the feasibility of furnishing such
medical debt information under this latter approach to consumer reporting agencies and reporting
to creditors in a way that distinguishes between loan obligations and disbursements that pay for
medical expenses and those that do not.
FCRA section 603(i) specifies that medical information must relate to the payment for
the provision of health care to “an individual.” The CFPB has preliminarily interpreted the
FCRA definition for medical information to mean that for information about a debt to be
considered medical information, the debt must arise from the provision of health care to a human
being.108 And, as a result, information relating to debts arising from veterinary care would not be
considered medical information under the CFPB’s preliminary interpretation.

See Mohamad v. Palestinian Auth., 566 U.S. 449, 454-55 (2012) (explaining that “individual” usually refers to a
“natural person” when used in a statute).
Generally, much of what Americans consider to be medical debt is owed directly to
health care providers such as hospitals or doctors’ or dentists’ offices, even though, as noted
previously, medical debt furnishing to consumer reporting agencies is usually done by thirdparty debt collectors.109 The CFPB believes that such directly owed debt is likely the type of debt
a consumer would clearly consider medical debt. Furnishers of information about these types of
debt obligations are required to notify consumer reporting agencies of their status as medical
information furnishers and thus debts are likely to be clearly marked as medical debts in
consumer reports and in consumer reporting agency databases.110 Therefore, the CFPB
anticipates that a consumer reporting agency should also be able to easily identify or determine if
information concerning a specific debt is medical debt information, which will make compliance
with the proposed rule less burdensome.
Definition—Medical Debt Information (§ 1022.3(j))
Accordingly, the CFPB proposes to add a definition for medical debt information at
§ 1022.3(j) to facilitate compliance with various aspects of the proposed rule, including by
clarifying the types of medical debts that a creditor would be prohibited from considering in
connection with a credit eligibility determination if the financial information exception is
removed and that a consumer reporting agency would be limited from including information
about on consumer reports under proposed § 1022.38 (which uses the proposed defined term).111
Medical debt information would be defined as medical information that pertains to a debt owed
by a consumer to a person whose primary business is providing medical services, products, or
devices (e.g., a medical or health care provider), or to the person’s agent or assignee, for the

See, e.g., Michael Karpman, Urban Inst., Most Adults with Past-Due Medical Debt Owe Money to Hospitals
(Mar. 2023), https://www.urban.org/sites/default/files/2023-03/Most%20Adults%20with%20PastDue%20Medical%20Debt%20Owe%20Money%20to%20Hospitals.pdf (survey results indicate that 72.9 percent of
adults with past-due medical debt owe at least some of that debt to hospitals, including 27.9 percent to hospitals only
and 45.1 percent to both hospitals and other providers).
110

See 15 U.S.C. 1681c(a)(6), 1681s-2(a)(9).

See part V.B, Limits on consumer reporting agency’s disclosure of medical debt information.

provision of such medical services, products, or devices. The definition would also clarify that
medical debt information includes, but is not limited to, medical bills that are not past due or that
have been paid.
The CFPB intends for the definition of medical debt information to align with the scope
of information about medical debt that creditors would be prohibited from considering if the
financial information exception is removed. The proposed definition is adapted from FCRA
section 623(a)(9), which defines the term “medical information furnisher” as a person whose
primary business is providing medical services, products, or devices, or the person’s agent or
assignee, who furnishes information to a consumer reporting agency on a consumer.112 The
CFPB believes that aligning the definition of “medical debt information” with the FCRA
definition for “medical information furnisher” will provide a familiar standard under the FCRA
that will facilitate compliance with the proposed rule. For consumer reporting agencies
specifically, the self-identification of medical information furnishers under FCRA section
623(a)(9) will assist consumer reporting agencies in identifying and excluding medical debt
information from consumer reports provided to creditors, as would be required under proposed
§ 1022.38.
The proposed definition for medical debt information would also clarify that the term
includes information about a debt owed to a health care provider’s agent or assignee. By
including agents and assignees in the medical debt information definition, the CFPB intends to
include medical debt that has been purchased by a debt buyer or that is being collected by a
third-party debt collector. As explained above, the CFPB considers medical debt that has been
sold to a debt buyer or otherwise assigned to a third-party debt collector to be debt arising from a
payment obligation that the consumer owes (or owed, for debt that has been paid or sold) directly
to the health care provider that provided the health care at issue. The CFPB seeks comment on

15 U.S.C. 1681s-2(a)(9) (requiring a medical information furnisher to notify a consumer reporting agency of its
status as a medical information furnisher).
whether this aspect of the proposed definition should be modified, such as to ensure it
accommodates circumstances where the medical debt has been sold and then resold, as well as
on its proposed definition for medical debt information generally.
In the course of the SBREFA process for this rulemaking, a few small entity
representatives asked the CFPB to define medical debt and asked whether debts arising from
certain health-related expenses would be included within the scope of the CFPB’s creditor
prohibition proposal.113 The CFPB seeks comment on whether the proposed definition provides
the clarity needed for consumers, creditors, and consumer reporting agencies to implement the
proposed rule if finalized.
Preliminary Determination that Medical Debt Information is Not Necessary and
Appropriate for Credit Eligibility Determinations
Under the FCRA, the CFPB has authority to permit an exception that it determines to be
necessary and appropriate, consistent with the intent of the creditor prohibition to restrict the use
of medical information for inappropriate purposes.114 Upon further review of predecessor
Agencies’ rationale for the financial information exception, it appears that while the Agencies
addressed specific comments on the parameters of their proposal for the financial information
exception (which they substantially finalized as proposed), the Agencies did not provide
evidence or analysis to support their determination.115
The CFPB understands that the financial information exception is the primary regulatory
exception by which creditors are able to obtain and use financial information relating to a
consumer’s medical debts. However, since the predecessor Agencies enacted their rule, there has
been a significant body of research and marketplace changes that have shed more light on the

SBREFA Report at 35 (noting small entity representatives’ questions about whether gym memberships,
counseling or therapy sessions, veterinarian services, and dental care, or medical expenses charged to credit cards
would be covered).
114

FCRA section 605(g)(5) (15 U.S.C. 1681b(g)(5)).

70 FR 33958, 33966-67 (June 10, 2005). See also part II.B, Fair and Accurate Credit Transactions Act of 2003
and implementing regulations.
nature of medical debt and financial information available to creditors about medical debt. These
developments, which provide a more nuanced picture that raises questions about the necessity
and appropriateness of creditors’ use of medical debt information in credit underwriting, show
that a broad exception for creditors to consider information on a consumer’s medical debt is not
necessary and appropriate, consistent with the intent of the creditor prohibition to protect
consumers’ sensitive medical information.
First, recent research has demonstrated that unlike other types of debt, medical debt often
results from an event such as an accident or sudden illness.116 In these circumstances, consumers
have no control over whether to incur a debt; they may have limited or no ability to shop around
and may not be able to control the amount or timing of their costs.
Second, in the period of time since the predecessor Agencies enacted their rule, more
evidence has come to light showing that information about medical debt is prone to error. Thirdparty surveys and complaints received by the CFPB have shown that medical bills commonly
contain errors and are frequently disputed by consumers.117 Further, the complexity of medical
billing, the third-party reimbursement process, and debt collection practices can lead to consumer
confusion on payment due dates and amounts owed for medical bills, as well as questions about
the accuracy of their bills.118

Lunna Lopes et al., Kaiser Fam. Found., Health Care Debt in the U.S.: The Broad Consequences of Medical and
Dental Bills (June 16, 2022), https://www.kff.org/health-costs/report/kff-health-care-debt-survey/ (results of national
survey show that 7 in 10 adults with health care debt say that the bills that led to their debt were for a one-time or
short-term medical expense).
See, e.g., Karen Pollitz & Kaye Pestaina, Kaiser Fam. Found., Could Consumer Assistance Be Helpful to People
Facing Medical Debt? (July 14, 2022), https://www.kff.org/policy-watch/could-consumer-assistance-be-helpful-topeople-facing-medical-debt/ (reporting survey results that 43 percent of all adults and 53 percent of adults with
health care debt say they thought they received a medical or dental bill with an error).
See, e.g., Consumer Fin. Prot. Bureau, Medical Debt Burden in the United States, at 9-14 (Feb. 2022),
https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf
(describing issues with medical billing and collections practices); Gideon Weissman et al., Frontier Grp. & U.S.
Pub. Int. Rsch. Grp. Educ. Fund, Medical Debt Malpractice: Consumer Complaints About Medical Debt Collectors,
and How the CFPB Can Help (Spring 2017), https://publicinterestnetwork.org/wpcontent/uploads/2017/04/Medical-Debt-Malpractic-vUS-1.pdf (63 percent of medical debt collection complaints
submitted to the CFPB asserted that the debt had never been owed in the first place, had already been paid or
discharged in bankruptcy, or was not verified as the consumer’s debt).
Third, the CFPB’s work shows that medical debt information has relatively limited
predictive value. Research by the CFPB in 2014 found that medical debt collections tradelines
(also referred to as medical collections) are less predictive of future consumer credit performance
than nonmedical collections.119 The CFPB’s 2014 analysis showed that individuals with more
medical than nonmedical collections and individuals with more paid than unpaid medical
collections were less likely to be delinquent than other individuals with the same credit score.120
Other recent CFPB research also supports that medical debt information, in the form of
medical collections, has limited value for credit underwriting. As described in part XI, Technical
Appendix, CFPB researchers reviewed de-identified consumer report data after the NCRAs
implemented changes pursuant to a 2015 settlement with over thirty State attorneys general
requiring the NCRAs to prevent the reporting and display of medical debt furnished by debt
collection agencies when the date of first delinquency is less than 180 days prior to the date the
debt is reported by the debt collector.121 After this reporting change, the NCRAs had data on
consumers’ medical debts that were less than 180 days past due, but creditors making credit
eligibility determinations did not receive them in consumer reports provided by the NCRAs. The
CFPB researchers compared the performance of credit accounts originated just before a medical
collection was added to a consumer report to the performance of credit accounts originated just
after a medical collection was added to a consumer report. Under the assumption that consumer
delinquency risk is similar in both scenarios, the only difference in these originated accounts is
the inclusion of the medical collection on the consumer’s report when the consumer applied for
the credit account. The CFPB researchers noted that if medical collection reporting is useful in

Kenneth P. Brevoort & Michelle Kambara, Consumer Fin. Prot. Bureau, Data point: Medical debt and credit
scores (May 2014), https://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-creditscores.pdf.
120

Id. at 4-5, 13-16, 17-19.

Assurance of Voluntary Compliance/Assurance of Voluntary Discontinuance (May 20, 2015), In re Equifax Info.
Servs., https://www.ohioattorneygeneral.gov/Files/Briefing-Room/News-Releases/Consumer-Protection/2015-0520-CRAs-AVC.aspx.
creditor underwriting to reduce delinquency risk, the CFPB would have generally expected a
credit account originated for a consumer with unreported medical collections at the time the
creditor was making the credit eligibility determination to have a higher delinquency risk than a
credit account originated for a consumer that had medical collection information on their
consumer report. However, the CFPB researchers found that, on average, new credit accounts of
consumers whose medical collections were not included on their consumer reports at the time of
their credit applications were no more likely to be seriously delinquent within two years of a
credit account’s origination than the new credit accounts of consumers whose medical
collections were included on their consumer reports at the time of their credit applications. This
research suggests that not only can creditors underwrite credit without information about
consumers’ medical debts, but also that such information may lead to a market failure because it
may be an inaccurate signal of whether a consumer will pay a future debt. Under the assumption
that two-year serious delinquency is a good proxy for the overall risk of a credit account, the
CFPB’s research described the Technical Appendix implies that information about consumers’
medical debts distorts underwriting decisions, impairs creditors’ ability to make safe and lowrisk credit approvals, and thus reduces credit approval volumes within creditors’ risk-tolerances.
Further confirming the limited value of medical debt information for ensuring that credit
decisions are based on whether a consumer will repay a loan, in the time since the CFPB’s 2014
study, two major credit score providers adjusted their newer models to reduce or eliminate the
weight of medical debt collections.122 Nonetheless, some widely used models still weigh medical

See VantageScore, Major Credit Score News: VantageScore Removes Medical Debt Collection Records From
Latest Scoring Models [Update] (Aug. 10, 2022), https://www.vantagescore.com/major-credit-score-newsvantagescore-removes-medical-debt-collection-records-from-latest-scoring-models/ (VantageScore to remove
medical collection data from VantageScore 3.0 and 4.0 models by January 2023); Ethan Dornhelm, The Impact of
Medical Debt Collections on FICO Scores, FICO Blog (July 13, 2015), https://www.fico.com/blogs/impactmedical-debt-collections-ficor-scores (describing changes to FICO Score 9 with regard to medical collections).
and nonmedical collections equally.123 This means that consumers with medical debt may still be
negatively affected if creditors use older scoring models that overweigh medical debt.
Fourth, the inconsistent nature of medical collection furnishing and medical debt
collection practices likely limits the value of such information for credit underwriting. Data
suggests that medical debt collections are disproportionately represented on consumer reports
compared to, for example, collections for credit card and other financial debt.124 The vast
majority of such medical debt reporting is done by third-party debt collectors,125 who use
consumer reporting as a way to coerce consumers to pay medical debt, even in some cases for
medical debt that the consumer may not owe or that has already been paid.126 But, not all
medical debt is reported; not all medical debt collectors report medical debts to consumer
reporting agencies and health care providers themselves rarely do so.127 These issues suggest that
even consumers with similar amounts amount of medical debt may face markedly different
outcomes in the credit market based on whether their medical debt is furnished or not.
Fifth, many industry participants have reduced or stopped their reliance on information
about medical debt, casting doubt on its value. The three NCRAs have stopped reporting medical

Consumer Fin. Prot. Bureau, Medical Debt Burden in the United States, at 27-28 (Feb. 2022),
https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf.
124

Id. at 5.

Consumer Fin. Prot. Bureau, Market Snapshot: An Update on Third-Party Debt Collections Tradelines
Reporting, at 16 (Feb. 2023), https://files.consumerfinance.gov/f/documents/cfpb_market-snapshot-third-party-debtcollections-tradelines-reporting_2023-02.pdf (as of Q1 2022, 57 percent of all tradelines were medical collections
and were the most common collections type); Consumer Fin. Prot. Bureau, Market Snapshot: Third-Party Debt
Collections Tradeline Reporting, at 12-13 (July 2019),
https://files.consumerfinance.gov/f/documents/201907_cfpb_third-party-debt-collections_report.pdf (finding that
58 percent of collections tradelines in credit records from 2004 to 2018 were for medical debt); Consumer Fin. Prot.
Bureau, Consumer credit reports: A study of medical and non-medical collections, at 5 (Dec. 2014),
https://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-non-medical-collections.pdf
(medical collections account for 52.1 percent of all collections tradelines).
See Consumer Fin. Prot. Bureau, Market Snapshot: An Update on Third-Party Debt Collections Tradelines
Reporting, at 12 n.9 (Feb. 2023), https://files.consumerfinance.gov/f/documents/cfpb_market-snapshot-third-partydebt-collections-tradelines-reporting_2023-02.pdf (describing how medical tradelines often do not persist on
consumer reports, how medical collections accounts are rarely marked as paid, and noting “pay-to-delete” practices
used by debt collectors and debt buyers to pressure consumers into paying or settling debt).
Consumer Fin. Prot. Bureau, Medical Debt Burden in the United States, at 26 (Feb. 2022),
https://files.consumerfinance.gov/f/documents/cfpb_medical-debt-burden-in-the-united-states_report_2022-03.pdf.
collections that are under $500, less than a year old, or paid.128 And, as already noted, large
credit scoring companies are moving to models that completely or partially exclude medical
collections.129 In addition, the CFPB learned from several small entity representatives during the
SBREFA process that some creditors have stopped considering medical collections in their
underwriting.130
Sixth, some States and some Federal agencies have also acted to limit creditors’ access
to, or ability to consider, certain medical debt information. For example, several States have
prohibited, or are considering prohibiting, the inclusion of consumer medical debt on consumer
reports.131 Although such efforts are in their early stages, the CFPB is not aware of evidence that
such actions have affected creditors’ underwriting standards or that creditors have materially
curtailed access to credit or tightened credit terms in those States. Some Federal government

Business Wire, Equifax, Experian, and TransUnion Support U.S. Consumers With Changes to Medical
Collection Debt Reporting (Mar. 18, 2022),
https://www.businesswire.com/news/home/20220318005244/en/Equifax-Experian-and-TransUnion-Support-U.S.Consumers-With-Changes-to-Medical-Collection-Debt-Reporting.
One such credit score provider, VantageScore, has completely stopped factoring medical collections in the latest
versions of its models due to lack of their predictiveness as compared with other accounts in collections. See
AnnaMaria Andriotis, Major Credit-Score Provider to Exclude Medical Debts, Wall St. J. (Aug. 10, 2022),
https://www.wsj.com/articles/major-credit-score-provider-to-exclude-medical-debts-11660102729.
See Comment from Arlington Cmty. Fed. Credit Union, Re: FCRA Proposals and Alternatives Under
Consideration, at 2-3 (Nov. 6, 2023), SBREFA Report app. A; Comment from First Sec. Bank & Tr., Re: CFPB’s
Outline of Proposals and Alternatives Under Consideration, Small Business Advisory Review Panel for Consumer
Reporting Rulemaking, at 7 (Nov. 6, 2023), SBREFA Report app. A (bank does not consider medical collections
unless aware the consumer has made periodic payment arrangements with a collection agency or medical
establishment).
See Colo. Rev. Stat. section 5-18-109; N.Y. Pub. Health Law art. 49-A; 2024 Conn. Act 24-6; 2024 Va. Acts ch.
751. The Illinois and Minnesota State legislatures have also passed legislation that would prevent medical debt from
being on consumer reports, which will become law upon each State’s respective governor’s signature. See Forest
Nelson, Medical debt may no longer negatively impact your credit in Illinois, WIFR (May 16, 2024),
https://www.wifr.com/2024/05/16/medical-debt-may-no-longer-negatively-impact-your-credit-illinois/; Off. of
Minn. Att’y Gen. Keith Ellison, Attorney General Ellison commends Senate for final passage of the Debt Fairness
Act (May 16, 2024), https://www.ag.state.mn.us/Office/Communications/2024/05/16_DebtFairnessAct.asp. Similar
legislation is under consideration in California, Maine, New Jersey, Virginia, and Rhode Island. See SB-1061(Cal.
2024), https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB1061; Libby Palanza,
Maine Lawmakers Consider Insulating Medical Debt from Credit Score Calculation, Interest Accumulation, and
Legal Action, Maine Wire (Mar. 20, 2024), https://www.themainewire.com/2024/03/maine-lawmakers-considerinsulating-medical-debt-from-credit-score-calculation-interest-accumulation-and-legal-action/; Robert Walker, New
Jersey Seeks to Ban Medical Debt Collectors from Credit Agency Reporting, Shore News Network (Mar. 21, 2024),
https://www.shorenewsnetwork.com/2024/03/21/new-jersey-seeks-to-ban-medical-debt-collectors-from-creditagency-reporting/; HB 1265 (Va. 2024), https://lis.virginia.gov/cgi-bin/legp604.exe?241+ful+HB1265+pdf; RI
H7103 (R.I. 2024), https://webserver.rilegislature.gov/BillText24/HouseText24/H7103.pdf.
agencies have also been reviewing and modifying their underwriting practices to reduce or
eliminate medical debt collections from consideration when evaluating whether a consumer will
repay a loan.132 These changes by the States and by the Federal government indicate a growing
awareness that medical debt information may have limited value for credit underwriting
purposes. Consumer reporting agencies and creditors will already need to comply with these new
laws and best practices and, given operational and business realities, may need to do so on a
broad basis. Removing the financial information exception in Regulation V would create a
uniform nationwide baseline consistent with these advancements.
Given these developments, the CFPB has preliminarily concluded that a creditor’s
consideration of sensitive financial information concerning a consumer’s medical debt under the
broad financial information exception in existing § 1022.30(d) is not “necessary and appropriate”
to protect legitimate operational, transactional, risk, or consumer needs. Nor is it consistent with
the intent of the creditor prohibition to restrict the use of medical information for inappropriate
purposes, as required for an exception under FCRA section 604(g)(5). The CFPB seeks comment
on this preliminary conclusion regarding medical debt information, as well as on whether any
adjustments to the proposed rule would be “necessary and appropriate to protect legitimate
operational, transactional, risk, consumer, and other needs (and which shall include permitting
actions necessary for administrative verification purposes).”133
2. Medical Information Related to Expenses, Assets, and Collateral
In addition to debts, the financial information exception permits a creditor to consider
medical information relating to expenses, assets, and collateral, including the value, condition,
and lien status of a medical device that may be collateral to secure a loan. By proposing to

See The White House, Fact Sheet: The Biden Administration Announces New Actions to Lessen the Burden of
Medical Debt and Increase Consumer Protection (Apr. 11, 2022), https://www.whitehouse.gov/briefingroom/statements-releases/2022/04/11/fact-sheet-the-biden-administration-announces-new-actions-to-lessen-theburden-of-medical-debt-and-increase-consumer-protection/.
133

15 U.S.C. 1681b(g)(5).

eliminate the financial information exception, the CFPB would prohibit a creditor from obtaining
and using sensitive medical information relating to expenses, assets, or collateral in making a
determination of the consumer’s credit eligibility, unless a specific exception in § 1022.30(e)
applies.
Medical expenses and medical debts are closely related. Unpaid medical expenses may
become medical debts that a creditor would be prohibited from considering in making a credit
eligibility determination under the CFPB’s proposal discussed in part V.A.1, Medical
information related to debts. Because of the similarities between medical expenses and medical
debts, the CFPB is proposing to treat these categories of medical information the same. The
CFPB has preliminarily determined that the financial information exception for a creditor to
consider medical information relating to a consumer’s expenses is also not “necessary and
appropriate” to protect legitimate operational, transactional, risk, or consumer needs and is not
consistent with the intent of the creditor prohibition to restrict the use of medical information for
inappropriate purposes as required under FCRA section 604(g)(5).
The CFPB has also considered the existing financial information exception for medical
information relating to a consumer’s assets and collateral and, upon further review, has
preliminarily determined that the financial information exception for assets and collateral is not
warranted. The CFPB understands that medical information related to a consumer’s assets and
collateral generally refers to medical equipment serving as an asset or as collateral for a loan,
which a creditor may potentially seize or anticipate could be liquidated to pay off a loan.
However, such medical equipment is often necessary and potentially lifesaving. Given the
importance of medical assets and collateral to a consumer’s well-being, the CFPB has
preliminarily determined that it is not “necessary and appropriate . . . to protect legitimate
operational, transactional, risk, consumer, and other needs” as required under FCRA section
604(g)(5) to continue to have the financial information exception to the creditor prohibition
apply to information about medical assets and collateral.

The CFPB seeks comment on its proposed approach to removing the financial
information exception at existing § 1022.30(d) for expenses, assets, and collateral. In particular,
the CFPB is interested in feedback from creditors and their representatives about whether they
take medical devices as collateral or into consideration as assets that may be used by consumers
to pay a future debt obligation, and if so, the business justification for doing so.
3. Medical Information Related to Income, Benefits, or the Purpose of the Loan
The financial information exception also permits creditors to consider medical
information related to income, benefits, and the purpose of the loan, including the use of the loan
proceeds. Although the CFPB is proposing to remove the financial information exception, the
CFPB intends to retain elements of the exception relating to income, benefits, and the purpose of
the loan by moving relevant material to the list of specific exceptions in § 1022.30(e), as outlined
below.
Proposed § 1022.30(e)(1)(x) generally retains the financial information exception’s test
for medical financial information. However, given the proposed narrow scope of the exception
(applying only to income, benefits, or the purpose of the loan, including the use of proceeds), it
is not necessary to retain § 1022.30(d)(1)(i), which requires the medical information creditors
may consider under the exception to be information routinely used in making credit eligibility
determinations. Instead, proposed § 1022.30(e)(1)(x)(A) would provide that the exception only
applies to medical information relating to income, benefits, or the purpose of the loan, including
the use of proceeds. Proposed § 1022.30(e)(1)(x)(A) also provides examples of the types of
financial information related to income and benefits relied upon as a source of repayment by
restating the examples of financial information in existing § 1022.30(d)(2)(i)(C). Proposed
§ 1022.30(e)(1)(x)(B) and (C) would also provide, as currently required, that the creditor must
use the information in a manner and to an extent that is no less favorable than comparable,
nonmedical information and that the creditor cannot take the consumer’s physical, mental, or
behavioral health, condition or history, type of treatment, or prognosis into account.

The CFPB believes that the elements of the exception relating to income, benefits, and
the purpose of the loan are necessary and appropriate to protect legitimate operational,
transactional, risk, consumer, and other needs, including permitting actions necessary for
administrative verification purposes, consistent with FCRA’s intent to restrict the use of medical
information for inappropriate purposes. For example, consumers whose primary source of
income is disability benefits might not be able to obtain credit at all if creditors could not
consider their income.134 And since creditors may be unwilling to underwrite if they lack
information about the purpose of a loan, consumers might not be able to obtain needed credit
unless creditors have access to that information.
The CFPB proposes to move an existing example illustrating a use of medical
information related to long-term disability income from § 1022.30(d)(2)(ii)(B) to proposed
§ 1022.30(e)(7). The CFPB does not propose incorporating certain examples from existing
§ 1022.30(d)(2)(iii) because they do not relate to a consumer’s income, benefits, or the purpose
of a loan, including the use of proceeds. Some examples describe the creditor’s consideration of
the consumer’s health condition in each instance in denying credit. In light of the CFPB’s
preliminary determination that certain types of medical information are not necessary and
appropriate for use in credit determinations, the CFPB believes that these examples do not need
to be restated.135
The CFPB seeks comment on its approach to the exception in proposed
§ 1022.30(e)(1)(x) and the accompanying example at proposed § 1022.30(e)(7). The CFPB also
seeks comment on whether each of the other, existing specific exceptions are necessary and

The CFPB notes that ECOA and Regulation B prohibit creditors from discriminating in any aspect of a credit
transaction against an applicant because all or part of the applicant’s income derives from a public assistance
program, which includes but is not limited to Social Security disability income. 15 U.S.C. 1691(a)(2); 12 CFR
1002.2(z), 1002.4(a); see also Regulation Z comment 1002.2(z)-3.
See 12 CFR 1022.30(d)(iii)(B) (regarding a consumer’s conversation with a loan officer about the consumer’s
potentially terminal disease), (C) (regarding a loan officer’s observation of a consumer’s apparent medical
condition).
appropriate and whether the CFPB should amend any of the other existing exceptions and
examples in the list of specific exceptions at § 1022.30(e).
B. Limits on Consumer Reporting Agency’s Disclosure of Medical Debt Information
The CFPB is proposing to add new § 1022.38 to subpart D to address how a consumer
reporting agency’s medical debt information reporting responsibilities would be impacted by the
proposal to remove the financial information exception for obtaining and using medical
information in connection with any determination of the consumer’s eligibility for credit.
Proposed § 1022.38 would permit a consumer reporting agency to include medical debt
information in a consumer report furnished to a creditor for credit eligibility purposes only if the
following criteria are met: (1) the consumer reporting agency has reason to believe the creditor is
not prohibited from obtaining or using the medical debt information under § 1022.30; and (2) the
consumer reporting agency is not otherwise prohibited from furnishing to the creditor a
consumer report containing the medical debt information, including by a State law that prohibits
furnishing to the creditor a consumer report containing medical debt information.
FCRA section 604, entitled Permissible purposes of consumer reports, identifies an
exclusive list of permissible purposes for which consumer reporting agencies may provide
consumer reports.136 The statute states that a consumer reporting agency may furnish consumer
reports under these circumstances “and no other.”137 One such circumstance, covered by FCRA
section 604(a)(3)(A), permits a consumer reporting agency to furnish a consumer report to a
person which it has reason to believe “intends to use the information in connection with a credit
transaction involving the consumer on whom the information is to be furnished and involving the

15 U.S.C. 1681b(a) (providing that, “[s]ubject to subsection (c), any consumer reporting agency may furnish a
consumer report under the following circumstances and no other”).
Id. Other sections of the FCRA identify additional limited circumstances under which consumer reporting
agencies are permitted or required to disclose certain information to government agencies. See 15 U.S.C. 1681f,
1681u, 1681v. Further, the Debt Collection Improvement Act of 1996, Pub. L. 104-134, 110 Stat. 1321, tit. III,
section 31001(m)(1), allows the head of an executive, judicial, or legislative agency to obtain a consumer report
under certain circumstances relating to debt collection. See 31 U.S.C. 3711(h).
extension of credit to, or review or collection of an account of, the consumer” (credit permissible
purpose).138 But, FCRA section 604(g)(2) imposes a specific limitation on the ability of creditors
to obtain or use medical information pertaining to a consumer in connection with any
determination of the consumer’s eligibility for credit, for which there are limited exceptions.
The CFPB preliminarily interprets the FCRA section 604(a)(3)(A) credit permissible
purpose limitation and the FCRA section 604(g)(2) limitation on the ability of creditors to obtain
or use medical information in connection with credit eligibility determinations together to mean
that a creditor does not have a credit permissible purpose to obtain or use a consumer report
containing medical information that the creditor is prohibited from obtaining or using. Under this
interpretation, if the CFPB removes the financial information exception in § 1022.30(d) as
proposed, a creditor would be prohibited from obtaining or using medical debt information—a
subcategory of medical information—in connection with any determination of the consumer’s
eligibility for credit under the general prohibition in § 1022.30(b), unless a specific exception for
obtaining and using medical information in § 1022.30(e) applies to the medical debt information;
therefore, absent a specific exception, the creditor would not have a credit permissible purpose
for a consumer report containing the medical debt information. Because a consumer reporting
agency may only furnish a consumer report to a person if it has reason to believe the person has a
permissible purpose for the information, it follows that a consumer reporting agency may not
furnish to a creditor a consumer report containing medical debt information if it has reason to
believe the creditor is prohibited from using the medical debt information. This limitation is
clarified in proposed § 1022.38(b)(1).
The CFPB has also preliminarily determined that the proposed limits on a consumer
reporting agency’s disclosure to a creditor of a consumer’s sensitive medical debt information
are necessary or appropriate to administer and carry out the purposes and objectives of the

15 U.S.C. 1681b(a)(3)(A).

FCRA, and to prevent evasions or to facilitate compliance.139 These limitations on consumer
reporting agencies would markedly facilitate compliance. If consumer reporting agencies
continued to furnish to creditors, in connection with eligibility determinations, consumer reports
containing medical debt information, creditors would need to screen out such information to
comply with the creditor prohibition. Doing so may be cumbersome, especially for creditors that
use automated underwriting processes. On the other hand, consumer reporting agencies could
more easily implement automatic processes that remove medical debt information provided by
medical information furnishers from those reports that are requested for credit eligibility
determinations because medical information furnishers are required to identify themselves to
consumer reporting agencies.140 The CFPB has also preliminarily determined that this proposed
limitation is necessary and appropriate to administer and carry out the purposes and objectives of
the FCRA, especially that of “need[ing] to insure that consumer reporting agencies exercise their
grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to
privacy.”141 Medical information is uniquely sensitive and intimate information, and it thus
advances the purposes and objectives of the FCRA to protect consumers’ privacy by limiting the
circumstances under which consumer reporting agencies may furnish medical debt information.
Proposed § 1022.38(b)(2) would incorporate other limitations on consumer reporting
agencies’ furnishing of consumer reports containing medical debt information to make clear that
proposed § 1022.38 does not override any other prohibition regarding the furnishing of consumer
reports. For example, State legislatures and Federal agencies have enacted policies that limit the
inclusion of medical debts on consumer reports. The CFPB commends the work of States to
proactively protect consumers against the harms of medical debt reporting. In 2022, the CFPB
issued an interpretive rule explaining that, with limited exceptions, States are permitted to enact

See 15 U.S.C. 1681s(e)(1).

See 15 U.S.C. 1681s-2(a)(9).

See 15 U.S.C. 1681(a)(4).

State-level laws that provide consumer protections involving consumer reporting, including
regarding the content of information contained in consumer reports, in addition to those provided
by the Federal FCRA.142 The CFPB intends for the proposed intervention to operate alongside
Federal and State-level efforts to increase consumer protections around medical debt consumer
reporting.
The CFPB is also proposing a related amendment to remove the example in
§ 1022.30(c)(3)(iii), which describes a creditor receiving medical information on a consumer
report furnished by a consumer reporting agency. While there may be some instances where a
consumer reporting agency may furnish to a creditor a consumer report containing medical
information, the proposed amendments would limit those instances and render the example less
instructive and potentially confusing. Therefore, the CFPB proposes to remove the example.
SBREFA panelists raised concerns about the consequences of prohibiting the inclusion of
medical debts on consumer reports used for credit underwriting. The CFPB is not proposing to
impose a blanket prohibition on the consumer reporting of medical debt information. Proposed
§ 1022.38 addresses how a consumer reporting agency’s responsibilities, with respect to medical
debt information, would be impacted by the proposal to remove the financial information
exception discussed in part V.A, Removal of the financial information exception to the creditor
prohibition on obtaining or using medical information.
The CFPB has considered alternatives to this approach. For example, as discussed in the
SBREFA Outline, the CFPB considered mandating a delay in the furnishing and reporting of
medical debt for a particular period of time, and not reporting or furnishing medical debt below a
particular dollar amount.143 This approach would have been similar to the voluntary changes that
the NCRAs implemented in 2022 and 2023 that stopped the reporting of some, but not all,

Consumer Fin. Prot. Bureau, The Fair Credit Reporting Act’s Limited Preemption of State Laws (June 2022),
https://files.consumerfinance.gov/f/documents/cfpb_fcra-preemption_interpretive-rule_2022-06.pdf.
143

SBREFA Outline at 19.

medical debt on a consumer report. SBREFA panelists questioned whether the proposals under
consideration were necessary, given recent market changes regarding medical debt consumer
reporting.144
The CFPB acknowledges the value of these voluntary consumer reporting changes by the
three NCRAs, but has preliminarily determined that these types of changes do not do enough to
protect the privacy of consumers’ medical data during the credit underwriting process. Although
these market changes have reduced the total number of medical collections tradelines reflected
on consumer reports, their voluntary nature means there is some uncertainty about whether the
changes could be reversed in the future, and, as discussed in part I.D, Medical debt and
consumer reporting, 15 million Americans still have $49 billion in medical bills on their
consumer reports even after the NCRAs’ voluntary changes. In addition, as discussed in part
V.A.1, Medical information related to debts, the CFPB has preliminarily determined that a
creditor’s consideration of sensitive financial information concerning a consumer’s medical debt
is not warranted.
The CFPB also considered requiring consumer reporting agencies and medical
information furnishers, upon receiving a dispute, to conduct an independent investigation to
certify that a disputed medical debt is accurate and not subject to pending insurance disputes.145
However, consumer reporting agencies are already subject to accuracy and dispute resolution
requirements. Therefore, the CFPB has preliminarily determined that its rulemaking goals are
best achieved through the proposed approach.
The CFPB seeks comment on all aspects of proposed § 1022.38.

See generally SBREFA Report.

SBREFA Outline at 19.

C. Example to Comply With Applicable Requirements of Local, State, or Federal laws
During the SBREFA process, several financial institutions, furnisher small entity
representatives, and debt collectors expressed concern about how the proposal under
consideration to remove the financial information exception in § 1022.30(d) and prohibit
consumer reporting agencies from including medical debt collections tradelines on consumer
reports furnished to creditors for credit eligibility determinations would interact with repayment
ability determination requirements under the Truth in Lending Act (TILA) and Regulation Z for
mortgage loans and credit cards.146 Stakeholders stated that these laws require creditors to
consider all of a consumer’s current debt obligations, such that the proposal under consideration
would impede their ability to make the required determination in compliance with Federal law. A
small entity representative recommended that the CFPB consider stating what creditors should
tell consumers regarding whether medical debt information should be disclosed on applications
for credit, and any limitations on financial institutions’ use of consumer-provided information for
underwriting.
For the reasons discussed above, the CFPB preliminarily finds it is generally not
necessary and appropriate for creditors to obtain or use information about a consumer’s medical
debt in determining a consumer’s credit eligibility. However, the CFPB has preliminarily
determined to not repeal other exceptions, including one for medical information is necessary to
comply with applicable local, State, or Federal laws. In response to comments during the
SBREFA process, the CFPB is proposing an example in new § 1022.30(e)(6) to direct creditors
and card issuers that are creditors regarding how to obtain and use medical information provided
by the consumer in compliance with TILA and Regulation Z, as set forth in § 1022.30(e)(1)(ii),
for purposes of compliance with the ability-to-repay rule under § 1026.43(c) for closed-end
mortgages, the repayment ability rule under § 1026.34(a)(4) for open-end, high-cost mortgages,

SBREFA Report at 36.

and the ability-to-pay rule under § 1026.51(a) for open-end (not home-secured) credit card
accounts.
Under existing § 1022.30(c)(1), a creditor does not violate the prohibition on obtaining
medical information in § 1022.30(b) if the creditor receives medical information pertaining to a
consumer in connection with the creditor’s determination of the consumer’s eligibility for credit
without specifically requesting such information. For example, if a consumer applies for a
mortgage loan and the creditor has not specifically requested medical information on the
application, but asks for all current debts or obligations, and the consumer self-discloses by
providing medical information in the form of a monthly medical payment plan, the creditor does
not violate the prohibition on obtaining medical information. In this circumstance, the creditor
would be permitted to use this limited category of information by considering the existence and
the amount of the medical payment plan as required in considering certain factors under
§ 1026.43(c)(2), such as the current debt obligations, consumer’s monthly debt-to-income ratio,
and residual income, in making the repayment ability determination required under
§ 1026.43(c)(1). Proposed § 1022.30(e)(6) also provides that, in accordance with
§ 1026.43(c)(3)(iii), the creditor would not be required to independently verify the existence and
amount of the consumer’s monthly medical payment plan if the consumer’s application states a
current debt, even if that debt is not shown in the consumer report. This is also consistent with
Regulation Z comment 43(c)(3)-6 describing a situation where a consumer, through the
application, provides a creditor with information on a debt obligation that is not listed on a
consumer report. Therefore, the creditor would not violate the prohibition on obtaining or using
medical information in § 1022.30(b) if the creditor obtains and uses this limited category of
medical information disclosed by the consumer on their application as an ongoing payment
obligation.
Proposed § 1022.30(e)(6) explains that a creditor (for mortgage loans) or card issuer (for
credit cards) relying on the specific exception for compliance with applicable laws at

§ 1022.30(e)(1)(ii) is not permitted to obtain or use medical information from a consumer report.
The CFPB has preliminarily determined that the creditor or card issuer can comply with the
applicable laws using the information provided by the consumer on the application, including
any unsolicited medical information; therefore, it would not be necessary or appropriate for a
creditor or card issuer to use medical information contained in a consumer report or request a
consumer report in an attempt to obtain medical information in order to comply with the
applicable laws. As explained in part V.B, Limits on consumer reporting agency’s disclosure of
medical debt information, the CFPB also believes it would be administratively difficult for
consumer reporting agencies to determine which information in a consumer’s credit file is
necessary for a particular creditor’s compliance with the requirement to make a repayment
ability determination and which information is not. In the context of creditors’ obligations to
make repayment ability determinations under Regulation Z, the limited amount of medical debt
information that would be relevant to ability-to-repay or ability-to-pay rules, as well as the
administrative burdens of segmenting this information out, is impractical for a consumer
reporting agency to undertake. For the reasons discussed above, the CFPB preliminarily finds
that preventing creditors from purposefully obtaining—and under new § 1022.38, consumer
reporting agencies from furnishing—medical information on consumer reports for credit
eligibility purposes will both ease burdens on consumer reporting agencies and prevent attempts
by creditors to evade the rule by requesting consumer reports in the hopes of learning indirectly
the same sensitive medical information the rule prohibits creditors from soliciting directly under
the guise of compliance with the ability-to-repay and ability-to-pay rules, and is necessary and
appropriate and will prevent evasions and facilitate compliance with the FCRA.
The CFPB does not believe that creditors would need to begin obtaining medical
information from consumers under the proposed rule if they do not already do so. For example,
the CFPB does not intend this proposal to change any existing law or guidance regarding the

extent to which creditors may rely on consumer reports to assess consumers’ current obligations
in complying with repayment ability determination requirements.147
The CFPB requests feedback on this aspect of the proposed rule and whether the proposal
under consideration would assist a creditor or card issuer in making its repayment ability
determination under TILA/Regulation Z. The CFPB also seeks comment on whether
amendments should be made to § 1022.30(e)(1)(ii) to reflect the language in proposed
§ 1022.30(e)(6)—providing that a creditor or card issuer may not obtain or use medical
information from a consumer reporting agency to comply with the ability-to-repay rule under
12 CFR 1026.43(c) for closed-end mortgages, the repayment ability rule under 12 CFR
1026.34(a)(4) for open-end, high-cost mortgages, or the ability-to-pay rule under 12 CFR
1026.51(a) for open-end (not home-secured) credit card accounts—or if the language in
proposed § 1022.30(e)(6) is sufficient to explain how creditors can comply with the repayment
ability determination requirements under TILA/Regulation Z.
VI. Proposed Effective Date
The Administrative Procedure Act generally requires that rules be published not less than
30 days before their effective dates.148 The CFPB proposes that, once issued, the final rule for
this proposed rule would be effective 60 days after it is published in the Federal Register. The
CFPB preliminarily concludes that 60 days should be enough time for implementation. Creditors
will likely need to do very little to comply with the rule to the extent that creditors currently only
utilize medical debt information provided through consumer reports, which the CFPB
understands is creditors’ main source of medical debt information. In such cases, so long as the
consumer reporting agency providing the consumer report has complied with the rule, no

See, e.g., Regulation Z comment 51(a)(1)(i)-7 (“A card issuer may consider the consumer’s current obligations
based on information provided by the consumer or in a consumer report.”); see also § 1026.43(c)(3)(iii) (“[I]f a
creditor relies on a consumer’s credit report to verify a consumer’s current debt obligations and a consumer’s
application states a current debt obligation not shown in the consumer’s credit report, the creditor need not
independently verify such an obligation.”)
148

5 U.S.C. 553(d).

medical debt information would be conveyed to the creditor, unless the consumer reporting
agency has reason to believe the creditor intends to use the medical debt information in a manner
not prohibited by the creditor prohibition. Creditors who currently obtain and use medical debt
information (and other prohibited medical information) from other sources will need to establish
controls to ensure that they do not obtain or use the medical debt information in a manner
prohibited by the rule. Consumer reporting agencies will need to make coding changes to
exclude data identified as medical information from consumer reports sent to creditors. However,
the CFPB expects this to be a relatively simple coding change, particularly for the NCRAs and
the consumer reporting agencies that obtain consumer reports from NCRAs for resale because
the NCRAs already limit their reporting of medical collections. In addition, consumer reporting
agencies may have already scoped out this kind of coding change to comply with reforms in
several States. The CFPB requests comment on this proposed effective date.
VII.

CFPA Section 1022(b) Analysis
The CFPB is considering the potential benefits, costs, and impacts of the proposed rule.

The CFPB requests comment on the analysis presented below, as well as submissions of
additional data that could inform its consideration of the impacts of the proposed rule. This
section contains an analysis of the benefits and costs of the proposed rule for consumers,
consumer reporting agencies, creditors, and other entities, such as health care providers and debt
collectors.
A. Statement of Need
The FCRA supports the fairness, accuracy, and privacy of personal information in
consumer reporting. Among the protections in the FCRA for consumers’ medical information,
FCRA section 604(g)(2) generally restricts creditors from obtaining or using medical
information in connection with credit eligibility determinations, absent a regulatory exception.
FCRA section 604(g)(5) requires that the CFPB determine that any such exception be necessary
and appropriate and consistent with the intent of FCRA section 604(g)(2) to restrict the use of

medical information for inappropriate purposes. The CFPB is also authorized under section
621(e) of the FCRA to issue regulations as may be necessary or appropriate to administer and
carry out the purposes and objectives of the FCRA, and to prevent evasions thereof or to
facilitate compliance therewith. The CFPB anticipates that the proposed rule would enhance
consumer privacy by removing the financial information exception at § 1022.30(d) that currently
permits creditors to consider medical debt information and medical information about expenses,
assets, and collateral, among other types of medical information, in underwriting decisions under
certain circumstances.
Medical debt is prevalent in the United States, with 20 percent of households reporting
that they had medical debt in 2022.149 Reflecting this prevalence, medical collections have
recently comprised the majority of credit collection tradelines found on consumer reports.150
Like other information on consumer reports, medical collections information may be used by
creditors to assess a consumer’s ability to handle credit obligations.
Medical collections may result from unplanned expenditures, making medical collections
information on consumer reports a potentially noisy or inaccurate signal of a consumer’s ability
to meet credit obligations. In the United States, high health care prices, uneven insurance
coverage, complex health insurance networks, and cost-sharing features of health insurance may
cause unexpected or chronic illnesses to result in large medical bills for individual consumers.
Due to opaque medical pricing and billing practices, consumers often do not know the cost of
medical services at the time those services are incurred, and may receive medical bills that they

Consumer Fin. Prot. Bureau, CFPB Estimates $88 Billion in Medical Bills on Credit Reports (Mar. 1, 2022),
https://www.consumerfinance.gov/about-us/newsroom/cfpb-estimates-88-billion-in-medical-bills-on-credit-reports/.
Consumer Fin. Prot. Bureau, Medical debt burden in the United States, at 5 (Mar. 1, 2022),
https://www.consumerfinance.gov/data-research/research-reports/medical-debt-burden-in-the-united-states/.
are uncertain they actually owe.151 Some consumers are unable to pay these bills on time, and
some of these past-due medical bills eventually become medical collections.
Another factor that potentially makes medical collections an imprecise signal is that they
are unevenly reported. Some health care providers allow debt collectors to furnish to consumer
reporting agencies, while others do not. Because of this, it is possible for consumers’ medical
debt in collections to be included unevenly on consumer reports, potentially leading to different
financial outcomes. While a consumer could theoretically be able to factor this into their decision
when selecting a health care provider, it is more likely that a consumer is not aware of which
health care providers furnish and usually does not choose a health care provider based solely on a
health care provider’s collection policies, if they consider them at all.152
When creditors base underwriting decisions on information that is unevenly reported and
potentially erroneous, an economic tradeoff arises. Creditors balance the probabilities of making
two types of error when deciding whether to lend to consumers. The first type of error occurs
when creditors lend to consumers who are unable to repay the loan. The second type of error
occurs when creditors choose not to lend to consumers who are able and willing to repay.
Creditors lose potential revenues when they decline credit for consumers with reported medical
collections. Similarly, consumers, who would have benefitted from access to credit, also lose
from being denied credit because of reported medical collections.
The likelihood of making each of these types of error is affected by the informativeness
of the signal medical collections provide to creditors. When medical collections are reported for
debts that do not exist (for instance, because medical bills have been paid by insurance) and are
prevalent, using this information will tend to increase the likelihood of the second type of error,

See Consumer Fin. Prot. Bureau, Complaint Bulletin: Medical billing and collection issues described in
consumer complaints, at 7-8 (Apr. 20, 2022), https://www.consumerfinance.gov/data-research/researchreports/complaint-bulletin-medical-billing-and-collection-issues-described-in-consumer-complaints/.
Noam M. Levey, Hundreds of Hospitals Sue Patients or Threaten Their Credit, a KHN Investigation Finds. Does
Yours?, KFF Health News (Dec. 21, 2022), https://kffhealthnews.org/news/article/medical-debt-hospitals-suepatients-threaten-credit-khn-investigation/.
without reducing the likelihood of the first type of error. In that situation, creditors who use
medical collection information would benefit from not considering this information in their
credit decisions. When medical collections are reported on the basis of debts that may in fact
impair consumers’ future repayment and are prevalent, creditors would experience a reduction in
revenue if they do not consider medical collections in their credit decisions, due to an increase in
likelihood of the first type of error. As a result, whether creditors would benefit from not being
able to consider medical collections in their credit decisions is an empirical question. As
discussed in part XI, Technical Appendix, empirical analysis suggests that on balance, preventing
creditors from using medical collection information in credit decisions would result in creditors
extending credit to more consumers without diminishing the average performance of newly
opened credit accounts.
If creditors could in fact benefit from disregarding medical debt information when
making credit decisions, one would expect that creditors would have abandoned the practice out
of their own profit motive. While, as discussed above, the industry has trended in this direction
in recent years, the transition has not occurred fully, or quickly. The CFPB hypothesizes that the
nexus of current contracts, expectations, and institutional structures that govern creditors’
behavior prevents markets from moving to a potentially better equilibrium outcome. For
instance, the market for mortgages is heavily driven by the secondary market for those loans.
Similar factors likely drive creditor behavior in other consumer loan markets. Mortgage
originators must follow underwriting practices that are expected by buyers in the secondary
market, or they will not be able to securitize their loans. Since consideration of medical debt
information has been expected by the market (if only implicitly through the use of commercially

available credit scores), it is difficult for any one firm to move away from using that information,
even if doing so would not increase risks for investors.153
The proposed rule would generally prohibit creditors from considering medical debt
information from consumer reports (among other sources) in underwriting decisions.
Consequently, the incentive for medical debt holders and collectors to furnish to consumer
reporting agencies would decrease. As a result, the proposed rule would enhance consumers’
privacy with respect to their medical information, while also reducing the likelihood that the
uneven reporting of medical collections would affect credit outcomes. While the proposed rule
would reduce the amount, though not necessarily the quality, of information on which creditors
can base underwriting decisions, the CFPB expects that, over time, those credit scoring models
that currently use medical collections would be adjusted to reweight the remaining information
on consumer reports. In the long run, the expected adjustments to credit scoring models may help
markets move toward a more efficient allocation of credit.
Adjustments to credit scoring models may result in credit being extended to more
consumers who are able and willing to repay their credit obligations. This may allow consumers
to benefit from increased access to credit and creditors to increase overall revenues. Moreover,
since medical collections tradelines on consumer reports are prone to error, removing medical
debt from consumer reports would reduce the need for dispute resolution, potentially saving both
consumers and consumer reporting agencies time and resources.
B. Data and Evidence
The CFPB’s analysis of costs, benefits, and impact is informed by data from a range of
sources. As discussed in part III.A, when the interventions discussed in this proposed rule were
part of the broader Consumer Reporting Rulemaking, the CFPB convened a Small Business

Loretta J. Mester, Fed. Rsrv. Bank of Phila., What’s the Point of Credit Scoring?, Bus. Rev., at 6 (Sept./Oct.
1997), https://www.philadelphiafed.org/-/media/frbp/assets/economy/articles/business-review/1997/septemberoctober/brso97lm.pdf.
Review Advisory Panel in October 2023 to gather input from small businesses. The discussions
at the panel meetings and the comment letters submitted by small entity representatives during
this process were presented in a Panel Report completed in December 2023. The CFPB also
invited and received feedback on the proposals under consideration from other stakeholders,
including stakeholders who were not small entity representatives. The impact analysis is further
informed by academic research, reports on research by industry and trade groups, practitioner
studies, and comment letters received by the CFPB. Where used, these specific sources are cited
in this analysis.
The CFPB also used its own Consumer Credit Information Panel (CCIP) to estimate the
potential impacts of the proposed rule on consumers and creditors. The CCIP is a 1-in-50,
nationally representative sample of deidentified consumer reports from one of the three
nationwide consumer reporting agencies (NCRAs). The data allowed the CFPB to conduct
analyses of the predictive value of medical collections information in the context of whether a
consumer’s application for credit was successful (determined by whether a creditor’s inquiry
following such an application led to the origination of a credit account or, in other words, inquiry
success) and future credit account delinquencies. Such analyses are useful for quantifying the
proposed rule’s potential impacts to consumers and creditors. While the CCIP is nationally
representative, it only contains information for consumers who have consumer reports. In
addition, because the CCIP data are drawn from consumer reports from a single NCRA and
because medical collections are unevenly reported, the data might not contain all medical
collections that exist in the United States. The CFPB requests additional data that can be used to
expand the impact analysis.
To quantify health care providers’ exposure to unpaid medical bills, the CFPB used data
from the Hospital Cost Reporting Information System (HCRIS), which is administered by the
Centers for Medicare and Medicaid Services. The HCRIS data contain annual cost reports filed
by Medicare-certified hospitals in the United States. The data comprise information on hospitals,

their revenues, operating costs, and bad debt expenses not reimbursable by Medicare. While
almost all hospitals file these cost reports, the data do not include unpaid medical debts owed to
health care providers that are not hospitals.154 The CFPB requests additional data from health
care providers and debt collectors that can be used to quantify potential impacts on entities other
than hospitals.
Due to these data limitations, the analysis presented in this part generally provides a
qualitative discussion of the proposed rule’s costs and benefits and includes quantitative
estimates whenever possible. The CFPB requests data that can be used to quantify the analysis of
impacts, or submission of studies that contain relevant estimates that can be used in the analysis
of impacts.
C. Coverage of the Proposed Rule
Part VIII.B.3 provides a discussion of the estimated number and types of entities
potentially affected by the proposed rule.
D. Baseline for Consideration of Costs and Benefits
The impact analysis compares the proposed rule’s potential benefits and costs against a
baseline in which the CFPB takes no regulatory action. This baseline includes existing Federal
and State law and current furnishing practices. Under the baseline, creditors are generally
allowed to consider medical collections information on consumer reports in underwriting
decisions due to the financial information exception at § 1022.30(d).
Over the last few years, the three NCRAs implemented several voluntary changes in the
consumer reporting of medical debt. In September 2017, the NCRAs implemented a 180-day
waiting period before including furnished medical collections on consumer reports.155 In July

Nat’l Pub. Radio, Nursing homes are suing friends and family to collect on patients’ bills (July 28, 2022),
https://www.npr.org/sections/health-shots/2022/07/28/1113134049/nursing-homes-are-suing-friends-and-family-tocollect-on-patients-bills.
Nat’l Pub. Radio, Credit Agencies To Ease Up On Medical Debt Reporting (July 11, 2017),
https://www.npr.org/sections/health-shots/2017/07/11/536501809/credit-agencies-to-ease-up-on-medical-debtreporting.
2022, the NCRAs extended the waiting period from 180 days to one year and removed all paid
medical collections from consumer reports. Finally, in April 2023, the NCRAs removed both
paid and unpaid medical collections under $500 from consumer reports.156
It is the CFPB’s understanding that health care providers and debt collectors they contract
with currently use three types of collection practices to collect medical debt: contacting
consumers by mail, phone, or other means; debt collection litigation; and furnishing medical
collections information to consumer reporting agencies. The impact analysis considers how
health care providers and debt collectors may respond to the proposed rule by switching to the
first two collection practices if furnishing becomes a less effective means of inducing payment.
The evolving landscape of State laws and consumer reporting practices may change
medical collections reporting in the absence of the proposed rule, affecting the baseline. The
voluntary changes recently implemented by the NCRAs could be reversed at any time, and such
reversals would tend to amplify the impacts of the proposed rule.
In the current state of the world, creditors are generally allowed to consider medical debt
information in underwriting decisions, including medical collections information found on
consumer reports. Some recently passed State laws establish when medical collections
information originating from these States can be furnished to consumer reporting agencies or
included on consumer reports.157 The only medical collections that the NCRAs include in their
consumer reports are those that: (1) are more than one year past due, (2) are for collection
amounts greater than $500, (3) are unpaid, and (4) would not violate State laws that restrict or
prohibit consumer reporting of medical collections. By August 2023, after the voluntary NCRA
changes were fully implemented but before most of the State-level changes took effect, an

Fredric Blavin et al., Urban Wire, Urban Inst., Medical Debt Was Erased from Credit Records for Most
Consumers, Potentially Improving Many Americans’ Lives (Nov. 2, 2023), https://www.urban.org/urbanwire/medical-debt-was-erased-credit-records-most-consumers-potentially-improving-many.
See, e.g., Colo. Rev. Stat. section 5-18-109; N.Y. Pub. Health Law art. 49-A; 2024 Conn. Act 24-6; 2024 Va.
Acts ch. 751.
estimated 5 percent of consumers had medical collections on their consumer reports.158 The
proposed rule would remove these remaining medical collections from, and generally prohibit
future medical collections from being included in, consumer reports provided to creditors.
E. Potential Benefits and Costs to Consumers and Covered Persons
1. Costs to Consumer Reporting Agencies
The proposed rule would generally prohibit consumer reporting agencies from including
medical collections information on consumer reports provided to creditors. Consumer reporting
agencies may lose revenue if, due to the proposed rule, debt collectors perceive consumer reports
as less informative for guiding collection activities. This prohibition may also decrease the
incentive for health care providers and debt collectors to furnish medical collections to consumer
reporting agencies, although consumer reporting agencies would still be able to include medical
collections information on the reports that they provide for non-credit eligibility determination
purposes such as with regard to employment or insurance, or to consumers seeking a copy of
their own consumer reports. This means that health care providers and debt collectors may still
see some value in reporting medical collections to consumer reporting agencies, including to the
three NCRAs. However, it is possible that in response to the proposed rule, consumer reporting
agencies would remove medical collections from consumer reports under all circumstances.
Consumer reporting agencies may also incur fixed operational and compliance costs to conform
to the proposed rule.
Creditors May Be Less Willing to Pay for Consumer Reports
Creditors use information from consumer reports, usually obtained from the NCRAs, to
reduce the risk of lending to consumers who may be unable to repay. Removing medical
collections information from consumer reports provided to creditors for credit decisions would

Ryan Sandler & Zachary Blizard, Consumer Fin. Prot. Bureau, Recent Changes in Medical Collections on
Consumer Credit Records Data Point, at 3-4 (Mar. 2024),
https://files.consumerfinance.gov/f/documents/cfpb_recent-changes-medical-collections-on-consumer-creditreports_2024-03.pdf.
reduce the information they contain relative to the case today or, in other words, the baseline. In
theory, if creditors expect medical collections information to be on consumer reports, or if they
view medical collections information as critical to their assessment of the riskiness of lending to
consumers, their willingness to pay consumer reporting agencies for consumer reports that do not
contain medical collections information may decrease. While this is not a view shared by the
CFPB, one NCRA commenter who submitted views to the CFPB during the SBREFA process
stated that it considers medical collections as predictive of a consumer’s willingness and
repayment ability and believes that the complete removal of medical collections from consumer
reporting would “degrade the accuracy of consumer reporting.” However, creditors would likely
find the remaining information on consumer reports to still be valuable, mitigating the reduction
in demand for consumer reports that may result from the proposed rule. The CFPB requests
comment on this issue, as well as data that can be used to quantify creditors’ demand for
consumer reports.
CFPB research finds that the use of medical collections information from consumer
reports provided by the NCRAs to creditors seems to vary by creditor type. Medical collections
information appears to be most used by credit card providers, with a credit card inquiry being
less successful when it is made after (rather than before) a medical collection appears on a
consumer report of a consumer that previously had no nonmedical collections tradelines. To a
lesser extent, mortgage providers also appear to use medical collections information.159
However, the CFPB has no information on the extent to which consumer reporting agencies’
revenues from consumer reports generally are driven by sales to these creditor types. The CFPB
requests further information to quantify its analysis of the potential revenue losses due to
different creditors’ decreased demand for consumer reports.

See part XI, Technical Appendix, to this proposed rule.

Debt Collectors May Be Less Willing to Pay for Consumer Reports
At baseline, debt collectors may use information from consumer reports to determine a
consumer’s ability to pay the collection amount and to guide what collection practices will be
most cost-effective. Debt collector small entity representatives, in their submitted comments,
stated that they found medical debt information on consumer reports to be relevant to estimating
whether a consumer will repay a debt that is in collections.160 Should medical debt holders and
their assignees (e.g., debt collectors or debt buyers) cease furnishing medical collections
information to consumer reporting agencies as a result of this proposed rule, debt collectors
would no longer have access to medical collections information previously included in consumer
reports to assess whether a consumer will repay a specific medical debt in collections. While the
remaining information on consumer reports may still be useful to guide their decisions, the loss
of medical collections information may reduce debt collectors’ willingness to pay for consumer
reports from consumer reporting agencies. The CFPB requests data from debt collectors to assess
the usefulness of medical collections information for debt collectors’ collection practices, as well
as data from the NCRAs and other consumer reporting agencies, to quantify the potential
revenue losses from reduced sales of consumer reports to debt collectors.
One-Time Operational and Compliance Costs
Consumer reporting agencies may incur one-time costs to comply with the proposed rule.
Consumer reporting agencies may need to modify their reporting systems and databases and
revise the guidance documents they provide to furnishers. Consumer reporting agencies may also
need to reorganize their computer systems and databases such that no medical debt information
is contained in consumer reports provided to creditors for credit eligibility determinations.
However, some operational and compliance costs that may have otherwise been caused by the
proposed rule may have already been incurred to some degree to comply with certain States’

SBREFA Report at 36.

laws. The CFPB does not have information on the reporting systems and databases used by most
consumer reporting agencies at baseline and requests data that can be used to quantify costs that
may be incurred or have already been incurred by consumer reporting agencies.
Compliance costs may be different for the three NCRAs (Equifax, Experian, and
TransUnion) and Innovis compared to other consumer reporting agencies. The NCRAs and
Innovis are known to provide a standardized data format to furnishers, called Metro 2, and have
organized their databases to process and screen data furnished in this format.161 At baseline, the
three NCRAs do not include medical collections under $500, medical collections that are less
than one year past due, or paid medical collections on any consumer report provided to third
parties. The use of the Metro 2 format constitutes an ongoing compliance cost for the NCRAs. It
is likely that they already have systems in place to screen out any furnished medical collections
that may violate these conditions. It is possible that the NCRAs’ and Innovis’s screening process
may have to be expanded such that they do not accidentally include medical collections
submitted by furnishers on consumer reports provided to creditors. However, the Metro 2 format
that the NCRAs and Innovis currently provide to furnishers may help facilitate compliance,
because tradeline information submitted by furnishers is already required to include codes that
specify when a debt is a medical debt.162 In addition, complying with the proposed rule may only
require an extension of the changes the NCRAs and Innovis have made or plan to make to
account for laws passed in several states, including New York, Colorado, Connecticut, and
Virginia.163 A SBREFA commenter, not representing the NCRAs, posited that making the
necessary changes would be a significant undertaking in terms of time and cost and that the

The CFPB does not have information on whether other consumer reporting agencies also rely on the Metro 2
format. For an overview of how NCRAs and Innovis, another CRA, receive and screen furnished data, see
Consumer Fin. Prot. Bureau, Key Dimensions and Processes in the U.S. Credit Reporting System: A review of how
the nation’s largest credit bureaus manage consumer data, at 19 (Dec. 2012),
https://files.consumerfinance.gov/f/201212_cfpb_credit-reporting-white-paper.pdf.
162

Id. at 16-19.

See, e.g., Colo. Rev. Stat. section 5-18-109; N.Y. Pub. Health Law art. 49-A; 2024 Conn. Act 24-6; 2024 Va.
Acts ch. 751.
NCRAs would have to reconfigure, test, and validate their current compliance programs.
Consumer reporting agencies that have different screening processes and databases that do not
rely on the Metro 2 format may incur different compliance costs associated with their own
systems, though, as noted above, some compliance costs may already have been incurred to
comply with State laws. The compliance costs for consumer reporting agencies could be greater
if medical information furnishers do not comply with their FCRA section 623(a)(9) obligation to
notify consumer reporting agencies of their status,164 though the CFPB does not have any
indication that medical information furnishers are not complying with that notification
requirement. Consumer reporting agencies may incur costs to screen medical information
provided by such furnishers, or for which there is no medical information furnisher within the
meaning of FCRA section 623(a)(9), from consumer reports provided to creditors for credit
eligibility determinations. The CFPB requests comment and information on this potential
compliance cost. The CFPB also requests data to quantify general operational and compliance
costs that may be incurred by consumer reporting agencies, as well as information on other
possible one-time costs.
2. Benefits to Consumer Reporting Agencies
The removal of medical collections information from consumer reports provided to
creditors may also reduce consumer reporting agencies’ costs by potentially reducing the number
of accounts that consumer reporting agencies must screen or conduct accuracy checks for, and
the number of consumer disputes that they may need to resolve. Consumer reporting agencies
regularly process significant amounts of data. For example, the NCRAs receive information on
over 1 billion tradelines each month and must accurately compile this information for each
consumer.165 Under the FCRA, consumers have the right to dispute inaccuracies on their

15 U.S.C. 1681s-2(a)(9).

Id. at 23.

consumer report, and consumer reporting agencies are obligated to investigate and resolve them
if necessary.166 This dispute resolution process imposes costs on consumer reporting agencies. A
CFPB analysis shows that 5.7 percent of medical collections tradelines had a dispute flag at one
point, much higher than the rate of dispute flags for credit cards and student loans.167 One NCRA
commenter reported that their data shows that while consumers dispute medical collections
tradelines more often than other tradelines, they do so at a similar rate to consumers disputing
delinquent tradelines. To the extent that medical collections tradelines contribute to the number
of disputes that consumer reporting agencies resolve, removing medical collections information
from consumer reports may reduce consumer reporting agencies’ costs associated with dispute
resolution. However, the CFPB does not have data to estimate the cost reduction in dispute
management that consumer reporting agencies may experience if medical debt information is
prohibited from appearing on most consumer reports provided to creditors. The CFPB requests
data to quantify these potential cost-reducing benefits.
3. Costs to Health Care Providers
As discussed above, the CFPB understands that some health care providers and their debt
collectors currently use furnishing of medical debt information as a means of inducing payment
on post-service billed amounts owed by the patient, although this is not one of the purposes of
credit reporting as stated in the FCRA.168 Because medical debt information generally would no
longer be included on consumer reports provided for credit eligibility determinations, the
proposed rule may reduce the effectiveness of this means of inducing payment on post-service
billed amounts owed by the patient. However, post-service billed amounts paid out of pocket by
patients is a small fraction of overall health care revenue and thus the overall impact on revenue

15 U.S.C. 1681i(a)(1)(A).

Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on Consumer Credit Reports (July 27,
2022), https://www.consumerfinance.gov/data-research/research-reports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/.
168

See 15 U.S.C. 1681(a).

is likely to be limited. In addition, the effect on health care providers that incur additional costs
from pursuing debt collection lawsuits to mitigate non-payment would be marginal given that, at
baseline, recovery rates associated with furnished medical collections are already low and health
care providers already use litigation to pursue some debts.169 As discussed in Costs to Medical
Debt Collectors, debt buyers that also engage in debt collection may be less willing to pay for
medical debt if furnishing becomes a less effective way of inducing payment from consumers.
This may further reduce the revenues of health care providers that sell medical debt to debt
buyers. The CFPB requests comment on these issues, as well as data that can be used to quantify
potential impacts to health care revenues and costs from potential non-payment of post-service
bills, increases in debt collection litigation, and reduction in sales of medical debt to debt buyers
who also engage in debt collection. These impacts are discussed in detail below.
Potential Reduction in Revenues from Post-Service Bills Sent to Patients
The vast majority of health care providers’ revenues comes from insurance (e.g.,
Medicare, Medicaid, private insurance) and other third-party payers. Out-of-pocket spending by
consumers only accounts for about 11 percent of national health expenditures.170 Of that
11 percent, a significant proportion is paid at point of service at a pharmacy or doctor’s office.171
The CFPB’s analysis of hospital-level cost reports from the Healthcare Provider Cost Reporting
Information System (HCRIS) provided by the Centers for Medicare and Medicaid Services

It is possible for debt collectors to furnish to consumer reporting agencies and pursue debt litigation for the same
account. As discussed in Costs to Medical Debt Collectors, only 2.5 percent of medical collections on consumer
reports are ever reported as paid. See Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on
Consumer Credit Reports (July 27, 2022), https://www.consumerfinance.gov/data-research/research-reports/paidand-low-balance-medical-collections-on-consumer-credit-reports/.
Ctrs. for Medicare & Medicaid Servs., NHE Fact Sheet, https://www.cms.gov/data-research/statistics-trends-andreports/national-health-expenditure-data/nhe-fact-sheet (last modified Dec. 12, 2023). Several SBREFA commenters
claimed that the voluntary reporting changes implemented by the NCRAs would result in an 11 percent decrease in
their revenues, which likely is an outlier or perhaps a misstatement given the overall share of out-of-pocket
spending.
In addition, 55 percent of patients with health insurance paid their out-of-pocket bill in 2021. See Crowe,
Hospital collection rates for self-pay patient accounts, at 8 (Aug. 2022),
https://www.crowe.com/insights/asset/h/hospital-collection-rates-for-self-pay-patient-accounts-report.
(CMS) indicates that 72 percent of hospitals had non-Medicare bad debt expenses in 2021.172
These bad debt expenses on average represent about 6 percent of total costs in 2021 for hospitals
that had non-Medicare bad debt. At baseline, industry expectations of bad debt recovery are low,
with a 25 percent recovery rate used as a benchmark.173 Assuming that health care providers
achieve a 25 percent recovery rate at baseline, the CFPB estimates that bad debt expenses may
rise to at most 7.5 percent of total costs on average. However, this rise assumes that bad debt
recovery rates decrease to zero. This may be unlikely given health care providers’ use of other
collection practices, such as patient outreach and debt collection litigation.174 The CFPB requests
comment on this issue, as well as data that may be used to quantify potential increases in nonMedicare bad debt.
Given the state of health care industry billing practices and business models at baseline, it
is unlikely that the proposed rule would change industry practices with respect to billing. In
theory, to mitigate potential revenue losses, health care providers could implement operational
changes including adding upfront payment options for patients and refusing non-emergency
services if patients have an overdue account. However, the CFPB notes that it is illegal to refuse
to provide some health care services in certain emergency contexts and that emergency services
represent a significant share of health care spending.175 At baseline, there is already a substantial

2021 is the latest year for which the cost report data are available. Hospitals classify medical bills as bad debt
expenses when they determine that consumers are unlikely to repay. Non-Medicare bad debt consists of past-due
medical bills from patients who are not Medicare beneficiaries. See Am. Hosp. Ass’n, Uncompensated Hospital
Care Cost Fact Sheet (Feb. 2022), https://www.aha.org/fact-sheets/2020-01-06-fact-sheet-uncompensated-hospitalcare-cost and Ctrs. for Medicare & Medicaid Servs., Hospital Provider Cost Report Data Dictionary (Dec. 13,
2023), https://data.cms.gov/resources/hospital-provider-cost-report-data-dictionary.
See, e.g., MD Clarity, RCM Metrics Bad Debt Recovery Rate, https://www.mdclarity.com/rcm-metrics/bad-debtrecovery-rate (last visited May 22, 2024).
In practice, the bad debt recovery rate may be even lower than the industry benchmark, further limiting the
potential rise in non-Medicare bad debt that may result from the proposed rule. Using a 2018 survey, the recovery
rate for collection accounts generally was estimated to be 11 percent. See ACA Int’l, Kaulkin Ginsberg 2020 State of
the Industry Report (Sept. 21, 2020), https://policymakers.acainternational.org/whitepapers/2020/09/21/2018-stateof-the-industry-report/.
See, e.g., Scott KW et al., Healthcare spending in US emergency departments by health condition, 2006-2016,
PLoS One (Oct. 2021), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8550368/.
economic incentive to require upfront payment or deny service to patients with overdue accounts
given that recovery rates on billed expenses to patients are already low.176 The proposed rule
may only marginally increase the incentive to require prepayment or upfront payment. Upfront
payment is already a uniform practice in pharmacies, and prepayment or point-of-service
payment for out-of-pocket expenses is commonplace for providers of health care services as
well.177 The CFPB expects that it is unlikely that a decrease in the recovery rates of furnished
medical collections would cause health care providers to substantially change their operational
and billing procedures in light of already existing incentives. The CFPB requests comment on
these issues and requests information on health care providers’ billing practices and provision of
health care services that can be used to quantify the magnitude of potential revenue losses and
consequences.
The CFPB understands that many health care providers sell medical debt to debt buyers.
These debt buyers often also engage in debt collection and furnish medical collections
information to consumer reporting agencies. Debt buyers purchase these bundles of medical debt
from health care providers at a price that is a fraction of the nominal value of the medical bills.178
Because the proposed rule may reduce the effectiveness of furnishing medical collections as a
collection practice, the CFPB expects debt buyers’ demand for medical debt bundles sold by
health care providers to potentially decrease. If so, the resulting decrease in the price of medical
debt bundles would further reduce the revenues of the affected health care providers. Depending

According to a Healthcare Financial Management Association (HFMA) report, the industry expectation is health
care providers will recover only 30 percent of amounts billed after discharge. Healthcare Fin. Mgmt. Ass’n, Address
Patient Financial Risk in Pre-Service to Boost Revenue and Earn Loyalty (July 12, 2018),
https://www.hfma.org/revenue-cycle/financial-counseling/61208/. In addition, collecting post-service bills is time
consuming, with 75 percent of health care providers needing more than one statement to collect a patient balance.
See J.P. Morgan Healthcare Payments, Trends in Healthcare Payments (Mar. 26, 2024),
https://www.jpmorgan.com/insights/payments/payment-trends/healthcare-payment-trends.
According to an HFMA survey, 96 percent of health care industry respondents reported having pre-payment or
point-of-service collection policies and procedures. Healthcare Fin. Mgmt. Ass’n, Analyzing pre-payment and pointof-service collections efforts (Aug. 15, 2021), https://www.hfma.org/technology/analyzing-pre-payment-and-pointof-service-collections-efforts/.
Fed. Trade Comm’n, The Structure and Practices of the Debt Buying Industry, at 22-23 (Jan. 2013),
https://www.ftc.gov/reports/structure-practices-debt-buying-industry.
on the magnitude of the decrease in price, health care providers may consider collecting the debt
themselves or writing the debt off. However, the revenues of health care providers that at
baseline do not allow debt collectors to furnish medical collections information would not be
affected in this way. The CFPB does not have data with which to quantify the magnitude of this
expected decrease in the price of medical debt bundles on the secondary market, nor does it have
information on the current prevalence of health care providers allowing debt collectors to furnish
medical collections information to consumer reporting agencies. The CFPB requests data from
health care providers to help quantify their potential reduction in revenues from the sale of
medical debt bundles to debt buyers.
Potential Increased Use of Litigation to Collect Medical Debt
The potential for revenue losses described above may affect the rate at which health care
providers or the debt collectors they work with choose to file debt collection lawsuits against
consumers.179 Should this happen, it may impose additional costs on health care providers, since
pursuing litigation entails some fixed and variable costs. However, repayment rates for medical
debt in collections have been historically quite low, and pursuing additional lawsuits as a result
of the proposed rule is not likely to result in an increase in marginal recovery rates.180 At
baseline, health care providers can already pursue debt collection litigation in conjunction with
other collection practices. Accordingly, the CFPB expects that any increase in overall litigation
frequency would be limited. The CFPB requests comment on this issue and requests data that
may help quantify this potential increase.

Judith Garber, Lown Inst., Which hospitals are suing patients? Investigation reveals hospital billing practices,
(Feb. 17, 2023), https://lowninstitute.org/which-hospitals-are-suing-patients-investigation-reveals-hospital-billingpractices/.
CFPB research suggests that only around 2.5 percent of medical collection accounts furnished to the NCRAs are
ever reported as paid. See Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on Consumer
Credit Reports (July 27, 2022), https://www.consumerfinance.gov/data-research/research-reports/paid-and-lowbalance-medical-collections-on-consumer-credit-reports/.
Medical debt collection lawsuits tend to be filed in small claims courts and to involve
amounts of less than $10,000, with most lawsuits ending in default judgment in favor of
plaintiffs.181 Health care providers may contract with debt collectors to file debt collection
lawsuits on their behalf.182 Depending on whether health care providers sell or assign medical
debt to debt collectors, it can be difficult to assess who decides to bring and incur the costs
associated with debt collection lawsuits. Health care providers may sell medical debt to debt
buyers who also engage in debt collection, thereby transferring ownership for the debt.183 In such
cases, the decision of whether to pursue litigation is made by the debt buyer, and they become
the main plaintiff in a debt collection lawsuit. However, some health care providers only assign
medical debt to debt collectors, while retaining ownership of the medical debt, and ultimately
deciding themselves whether to pursue debt collection litigation. When debt collection litigation
happens this way, the debt collectors may be listed as plaintiffs even though it may be the health
care providers that pay the bulk of the litigation costs. For example, debt collectors working with
UC Health, the largest hospital system in Colorado, were recently reported to have filed 15,710
lawsuits from 2019 through 2023.184 In this case, the medical debts were “assigned” to debt
collectors, but UC Health retained ownership of the medical debts and shared a portion of the
recovered payments with the debt collectors.

The Pew Charitable Trusts, How Debt Collectors Are Transforming the Business of State Courts (May 6, 2020),
https://www.pewtrusts.org/en/research-and-analysis/reports/2020/05/how-debt-collectors-are-transforming-thebusiness-of-state-courts.
John Ingold & Chris Vanderveen, UCHealth sues thousands of patients every year. But you won’t find its name
on the lawsuits, Colorado Sun (Feb. 19, 2024), https://coloradosun.com/2024/02/19/uchealth-debt-collectors/.
Fed. Trade Comm’n, The Structure and Practices of the Debt Buying Industry (Jan. 2013),
https://www.ftc.gov/reports/structure-practices-debt-buying-industry.
John Ingold & Chris Vanderveen, Colorado’s largest hospital system is quietly suing thousands of patients every
year over unpaid bills, The Denver Post (Feb. 21, 2024), https://www.denverpost.com/2024/02/21/uchealthmedical-debt-lawsuits-colorado/.
Health care providers themselves can also file debt collection lawsuits on their own
behalf.185 Health care providers may incur a mix of fixed costs and variable litigation costs.
Fixed costs of litigation may include the costs of retaining and maintaining relationships with
legal providers, as well as hiring additional staff. Health care providers that already take legal
action against their patients might not need to incur these fixed costs. Using a random 10 percent
sample of hospitals in the United States, a recent investigation found that over two-thirds of
hospitals already take legal action to collect unpaid medical bills, implying that many health care
providers currently have some capacity to file debt collection lawsuits at baseline.186
Separate from fixed costs are variable costs that increase with the number and complexity
of the debt collection lawsuits that hospitals choose to pursue. These are primarily court filing
fees and attorney fees. Court filing fees vary depending on the jurisdiction and the collection
amounts, making it difficult to estimate costs that hospitals may face.187 Attorneys can be paid on
an hourly basis or on a contingency fee basis. However, if health care providers already employ
in-house attorneys, this may reduce the need to pay additional attorney fees to pursue debt
collection litigation. In addition, some jurisdictions allow health care providers to add filing fees,
attorney fees, and other litigation costs to the judgment amount, partially shifting some of the
cost of pursuing debt collection lawsuits to consumers if health care providers secure a favorable
judgment.188 The CFPB does not have data to quantify these costs of debt collection litigation

Joseph Giuseppe R. Paturzo et al., Trends in Hospital Lawsuits Filed Against Patients for Unpaid Bills Following
Published Research About This Activity, JAMA Network Open (Aug. 23, 2021),
https://jamanetwork.com/journals/jamanetworkopen/article-abstract/2783297.
Noam M. Levey, Hundreds of Hospitals Sue Patients or Threaten Their Credit, a KHN Investigation Finds. Does
Yours?, KFF Health News (Dec. 21, 2022), https://kffhealthnews.org/news/article/medical-debt-hospitals-suepatients-threaten-credit-khn-investigation/.
See, e.g., the fee schedule for Small Claims Court in Maryland, https://www.mdcourts.gov/legalhelp/smallclaims,
the corresponding fee schedule for regular civil cases, https://www.mdcourts.gov/courts/feeschedules, a comparison
between small claims and regular civil cases in California, https://selfhelp.courts.ca.gov/small-claims-or-limitedcivil (all last visited May 12, 2024).
Casey Tolan & Ed Lavandera, Arkansas hospital sued thousands of patients over medical bills during the
pandemic, including hundreds of its own employees, CNN (Sept. 8, 2023),
https://www.cnn.com/2023/09/08/us/arkansas-hospital-debt-collections-lawsuits-pandemic/index.html.
that health care providers may incur and requests information from health care providers who
currently pursue debt collection lawsuits.
Because health care providers already have the option to pursue debt collection lawsuits
under the baseline, the total costs of increased debt collection litigation would depend on how
many additional medical debt collection lawsuits arise because of the proposed rule. The
proposed rule would affect the consumer reporting of medical collections above $500, because
medical debts under $500 are already removed from consumer reports from the NCRAs at
baseline. Since debt collection lawsuits are filed and recorded in State or lower-level courts, the
CFPB does not have data to quantify the additional debt collection lawsuits that health care
providers may pursue after the proposed rule is implemented.189 The CFPB requests information
from health care providers on the amounts involved in current debt collection litigation.
4. Costs to Medical Debt Collectors and Debt Buyers
Debt collectors (including debt buyers who also engage in debt collection) generally use
three types of collection practices. Debt collectors may use means of communication such as
mail and phone calls to locate consumers, inform them of the stated collection amount, and
negotiate payment. They may also furnish medical collections information to consumer reporting
agencies (generally, one or more of the NCRAs) to induce payment from consumers. Finally,
debt collectors can file debt collection lawsuits against consumers.
Debt collectors may switch to the other two types of collection practices if consumer
reporting agencies stop including medical collections information on consumer reports provided
for credit eligibility determinations. To the extent that debt collectors rely primarily on
furnishing to induce payment at baseline, the proposed rule may reduce their profits if the other
collection practices that are not restricted under the proposed rule are costlier or less effective.
Comments received from debt collector small entity representatives during the SBREFA process

Blake N. Shultz et al., Hospital Debt Collection Practices Require Urgent Reform, Health Affairs (May 2, 2022),
https://www.healthaffairs.org/content/forefront/hospital-debt-collection-practices-require-urgent-reform.
indicate that furnishing medical collections information to NCRAs costs approximately $10 per
account, while debt collection litigation costs approximately $500 per account.190 At baseline, it
is possible for debt collectors to furnish to the NCRAs and pursue debt litigation for the same
account. Due to the cost difference, debt collectors likely incur furnishing costs on a much larger
percentage of accounts than they incur litigation costs, and so this may represent either a net
saving or net cost for debt collectors, depending on the specific firm’s furnishing practices and
increase in litigation activity. The CFPB requests comment on this issue and data to quantify
changes in litigation costs. Debt collectors may have to incur both fixed and variable costs to
increase their use of collection practices other than medical collections furnishing if the proposed
rule is finalized. If collecting medical debt becomes more difficult, debt buyers, including those
that also engage in debt collection, may also attempt to negotiate a lower price when they
purchase medical debt from health care providers. This lower price might reduce health care
providers’ willingness to sell medical debt to debt buyers.
Given the reporting changes implemented by the NCRAs in recent years, it is possible
that some debt collectors have at least partially incurred the fixed and variable costs of switching
to collection practices that do not involve furnishing of medical debt. However, the CFPB does
not have data to assess the relative prevalence, costs, and effectiveness of the various collection
practices that debt collectors use at baseline. The CFPB requests data to quantify the impacts on
debt collectors.
Increased Use of Traditional Methods of Debt Collection
Because many debt collectors rely on furnishing medical collections information at
baseline, they may have to incur costs from having to increase their use of the collection
practices that would not be restricted under the proposed rule. Relative to furnishing medical
collections information, contacting consumers through traditional methods of debt collection that

SBREFA Report at 38.

include mail, phone, or other means may be more time-intensive and expensive. Some debt
collector small entity representatives expect to have to increase staffing by 10 percent as a result.
This potential staffing increase may create new jobs. Increased staffing may also impose
additional labor costs on debt collectors. These small entity representatives also expect to incur
fixed costs associated with “rewriting policies and procedures, training employees, updating
systems, and renegotiating contracts” with health care providers.191 The CFPB requests
additional information on the costs that debt collectors incur when using traditional methods of
communication with consumers, and the effectiveness of these methods for recovering the
collection amounts.
Increased Use of Debt Collection Litigation
Debt collectors may also respond to the proposed rule by increasing their use of debt
collection lawsuits. In choosing whether to pursue debt collection litigation, debt collectors likely
compare the cost of litigation with the expected recovery amount in the event of a favorable
judgment. Under the baseline, debt collectors also likely compare the expected effectiveness of
litigation against furnishing, although they can choose to furnish and pursue litigation for the
same debt. The CFPB does not have data to directly compare the relative efficacy of furnishing
and litigation for inducing payment.
Debt collectors may incur a mix of fixed costs and variable costs when they increase their
use of debt collection lawsuits. Fixed costs of litigation include the costs of hiring and
maintaining relationships with attorneys. Debt collectors that already pursue debt collection
lawsuits may not need to incur these fixed costs. However, the CFPB does not have information
on the current prevalence of debt collection lawsuits relative to other collection practices used by
debt collectors.

Id.

Debt collectors may also incur variable costs that increase with the number and
complexity of debt collection lawsuits. Court filing fees vary depending on the jurisdiction and
the collection amounts, making it difficult to estimate the increase in costs that debt collectors
may incur.192 Attorneys can be paid on an hourly basis or on a contingency fee basis. However, if
debt collectors already employ attorneys in house or under a flat fee arrangement, this may
reduce the need to pay additional attorney fees should they increasingly pursue debt collection
lawsuits. The CFPB does not have data to quantify these costs of debt collection litigation, and
requests further information on the debt collection litigation activities of debt collectors.
The CFPB expects that the increase in total costs associated with debt collection litigation
would depend on the number of additional debt collection lawsuits that debt collectors pursue if
the proposed rule is finalized. At baseline, medical collections information is included in the
consumer reports from the NCRAs if the medical collections are for amounts above $500. Debt
collectors appear to use debt collection litigation for both small and large collection amounts, but
some research indicates that most debt collection lawsuits are pursued for collection amounts
larger than $500.193 Without comprehensive data on the distribution of stated medical collection
amounts, the CFPB cannot provide an estimate of the number of additional debt collection
lawsuits that debt collectors may pursue.
Potentially Decreased Recovery Rates
Based on available information, the CFPB expects that approximately 2.5 percent of
medical collection accounts are recovered by debt collectors who furnish medical collections
information to the NCRAs, as estimated using the share of medical collections marked as paid on

See, e.g., the fee schedule for Small Claims Court in Maryland, https://www.mdcourts.gov/legalhelp/smallclaims,
the corresponding fee schedule for regular civil cases, https://www.mdcourts.gov/courts/feeschedules, a comparison
between small claims and regular civil cases in California, https://selfhelp.courts.ca.gov/small-claims-or-limitedcivil (all last visited May 12, 2024).
Keith Ericson & Tal Gross, Limits on Medical Debt Lawsuits, The Abell Found. (Feb. 9, 2021),
https://abell.org/wp-content/uploads/2022/02/Final20Medical20Debt20Report.pdf.
consumer reports.194 The CFPB requests comment or data submissions that may better
approximate the share of medical collections that are recovered by debt collectors. If consumers
are no longer concerned that unpaid medical bills will appear on their consumer report when they
are seeking credit, they may have less incentive to pay the collection amount even if debt
collectors seek to induce payment by using mail, text messages, or phone calls. Thus, despite the
changes that debt collectors make to their collection practices, the proposed rule may lead to a
further decrease in recovery rates. Decreased recovery rates would reduce debt collectors’
revenues, potentially worsening the impact of the increased costs associated with other types of
collection practices.
Because recovery of collection amounts is how debt buyers that also engage in debt
collection (referred to here as debt collectors) profit from buying medical debt from health care
providers, reduced recovery rates would reduce debt collectors’ demand for medical debt. If debt
collection becomes more difficult or costly, debt collectors’ willingness to pay for medical debt
would decrease. Depending on the relative bargaining position of debt collectors and health care
providers, debt collectors may be able to pass on some of the decrease in expected revenues to
health care providers by negotiating a lower price when they purchase medical debt.
The CFPB does not have data that would allow estimation of the potential reduction in
recovery rates, or on transactions between debt collectors and health care providers that would
allow estimation of expected reduction in the price paid by debt collectors to health care
providers, and requests data that can be used to quantify these impacts.
5. Costs and Benefits to Creditors
Under the proposed rule, creditors generally would not be permitted to use consumer
report information related to medical debt in their determinations of consumers’ eligibility for

Approximately 2.5 percent of medical collections were marked as paid in the five years before paid medical
collections were removed from consumer reports in June 2022. Consumer Fin. Prot. Bureau, Paid and Low-Balance
Medical Collections on Consumer Credit Reports (July 27, 2022), https://www.consumerfinance.gov/dataresearch/research-reports/paid-and-low-balance-medical-collections-on-consumer-credit-reports/.
credit by utilizing the financial information exception at § 1022.30(d), which the CFPB
understands is currently how creditors’ primarily use medical debt information. This may affect
the performance of creditors’ loan portfolios if the absence of this medical debt information
reduces the accuracy of creditors’ assessments of delinquency risk. Indeed, the removal of
information from the set of variables that can be used in underwriting models should not improve
performance if models optimally assess risk at baseline.
However, the CFPB’s research in the Technical Appendix instead suggests that creditors
would benefit from the removal of medical collections from consumer reports. The CFPB finds
that creditors are much less likely to grant credit to consumers with reported medical collections
tradelines information, despite also finding that credit accounts originated when creditors were
able to observe applicants’ medical collections on their consumer reports perform no better in
terms of likelihood of serious delinquency, on average, than when creditors were unable to
observe that information. This implies that the use of medical collections in underwriting may
prevent creditors from making what would be profitable loans.
The Technical Appendix is described in detail below in part XI. Before discussing the
CFPB’s empirical findings and conclusions, the CFPB discusses more general economic analysis
for how creditors may be affected by the proposed rule.
The CFPB understands that creditors for many types of credit products do not generally
ask explicitly for medical debt information on applications for credit, and instead rely on the
medical collection information provided in consumer reports. Some forms of credit, like
mortgages, more commonly require that an applicant report all debts on the credit application.195
The CFPB does not have access to credit applications and the analysis that follows assumes that
creditors currently only use medical debt information that is included on consumer reports,

See, e.g., Fannie Mae, Uniform Residential Loan Application (Form 1003),
https://singlefamily.fanniemae.com/delivering/uniform-mortgage-data-program/uniform-residential-loan-application
(last visited May 9, 2024).
except where stated otherwise. While the proposed rule would allow creditors to use medical
debt information that consumers provide in credit applications to satisfy ability to repay
requirements, the proposed rule would not change any existing law or guidance regarding the
information that creditors must request from applicants, and thus would not impose additional
costs in that regard. The CFPB requests evidence for how the continued ability to observe
medical debt on credit applications may impact creditors and consumers.
Because most consumers with medical debt do not have medical collections on their
consumer report, creditors currently provide credit accounts to many consumers who have
medical debt without any knowledge of that debt. Nationally representative surveys indicate that
between 15 and 41 percent of adults had some form of outstanding medical debt between 2021
and 2022, depending on the definition of “medical debt” used.196 However, only 14 percent of
consumers had a medical collection on their consumer report in 2022.197 By June 2023, after the
NCRAs’ voluntary removal of all medical collections under $500 in April 2023, only 5 percent
of people with a consumer report had a medical collection included on their consumer report.198
The medical collections included on consumer reports comprise only a subset of
consumers’ medical debt for several reasons. First, not all medical debt, including past-due
medical debt, is in collections at any given time. Further, not all medical debts that are in
collections are included on consumer reports, for a variety of reasons. The NCRAs entered into a
settlement, called the National Consumer Assistance Plan (NCAP), with over thirty States’
attorneys general in 2015 that required them to remove from consumer reports all medical

U.S. Census Bureau, Wealth, Asset Ownership, & Debt of Households Detailed Tables: 2021 (2021),
https://www.census.gov/data/tables/2021/demo/wealth/wealth-asset-ownership.html; Lunna Lopes et al., Kaiser
Fam. Found., Health Care Debt In The U.S.: The Broad Consequences Of Medical And Dental Bills (June 16, 2022),
https://www.kff.org/report-section/kff-health-care-debt-survey-main-findings/.
Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on Consumer Credit Reports (July 27,
2022), https://www.consumerfinance.gov/data-research/research-reports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/.
Ryan Sandler & Zachary Blizard, Consumer Fin. Prot. Bureau, Recent Changes in Medical Collections on
Consumer Credit Records Data Point (Mar. 2024), https://files.consumerfinance.gov/f/documents/cfpb_recentchanges-medical-collections-on-consumer-credit-reports_2024-03.pdf.
collections that were paid by insurance, as well as ensure that medical collections were not
included on consumer reports until they were at least 180 days past due from the date of first
delinquency.199 Since that agreement, the NCRAs have voluntarily removed many types of
medical collections from consumer reports, including medical collections that were paid by any
source, medical collections under $500, and medical collections that have not been outstanding
for at least one year.200 In addition, the medical collections that currently appear on consumer
reports are rarely reported for the full seven years that the FCRA permits. Previous CFPB
research found that fewer than half of medical collections over $500 were reported for longer
than one year, and just over 10 percent were reported for at least four years.201 Since the NCRAs’
voluntary medical debt reporting changes were fully implemented in April 2023, the persistence
of medical collection reporting has been substantially lower. The CFPB analyzed CCIP data and
found that fewer than half of the medical collections reported in May 2023 were reported in
November 2023, and just 26 percent were reported in February 2024. The CFPB understands that
medical collections are not primarily reported to the NCRAs to assist creditors in assessing
delinquency risk, but rather to induce repayment. Creditors may also not observe a medical
collection on a consumer report if the debt collector did not report to all three NCRAs.202 Finally,
several States, including Colorado, New York, Virginia, and Connecticut, have enacted laws that
significantly restrict or prohibit consumer reporting of medical debt information.203 Creditors that

Assurance of Voluntary Compliance/Assurance of Voluntary Discontinuance (May 20, 2015), In re Equifax Info.
Servs., https://www.ohioattorneygeneral.gov/Files/Briefing-Room/News-Releases/Consumer-Protection/2015-0520-CRAs-AVC.aspx.https://www.ohioattorneygeneral.gov/Files/Briefing-Room/News-Releases/ConsumerProtection/2015-05-20-CRAs-AVC.aspx
PR Newswire, Equifax, Experian and TransUnion Remove Medical Collections Debt Under $500 From U.S.
Credit Reports (Apr. 11, 2023), https://www.prnewswire.com/news-releases/equifax-experian-and-transunionremove-medical-collections-debt-under-500-from-us-credit-reports-301793769.html.
Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on Consumer Credit Reports (July 27,
2022), https://www.consumerfinance.gov/data-research/research-reports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/.
202

Id.

See Colo. Rev. Stat. section 5-18-109; N.Y. Pub. Health Law art. 49-A; 2024 Conn. Act 24-6; 2024 Va. Acts ch.
751.
serve consumers for whom consumer reports will have medical collections removed pursuant to
these State laws provide or will soon be providing credit without knowledge from consumer
reports of their applicants’ outstanding medical debt.
The discussion above presupposes that extending credit to consumers with medical debt
is less profitable than extending credit to consumers without, conditional on the other
information available to the creditor. It further assumes that being aware of consumers’ medical
debts would increase creditors’ expected revenue, and removing medical debt information would
lower revenue. In other words, the discussion presupposes that medical collections tradelines are
predictive of creditor revenue, and in particular, predictive of serious delinquency.204 But in fact,
previous CFPB research showed that medical collections tradelines are less predictive of serious
delinquency than nonmedical collections. This research also showed that holding credit scores
constant, a consumer who has more medical collections than nonmedical collections may be less
likely to become seriously delinquent within two years than a consumer with more nonmedical
than medical collections.205 The CFPB understands that medical collections may still have some
predictive value in the sense that, on average and without considering other consumer
characteristics, consumers with medical collections are more likely to become seriously
delinquent than consumers without medical collections. However, as explained below, the CFPB
expects that medical collections can be removed from underwriting models without significantly
reducing their ability to predict serious delinquency if underwriting models continue to include
other variables that are sufficiently predictive of delinquency risk.
The evidence available to the CFPB indicates that the predictive performance of
underwriting models would not be impaired by the removal of all medical collections

For purposes of this discussion, the term “serious delinquency” means an account that is at least 90 days past due.
Commercial credit scoring models typically try to predict the probability that a new account made to a given
consumer will become at least 90-days past due within two years of origination.
Kenneth P. Brevoort & Michelle Kambara, Consumer Fin. Prot. Bureau, Data point: Medical debt and credit
scores (May 2014), https://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-creditscores.pdf.
information. Many creditors have voluntarily minimized or eliminated the use of medical
collections from their underwriting standards, and indeed, credit scoring companies have either
removed or differentiated medical collections in their models and found minimal or no negative
effects on performance.206 Furthermore, an industry analysis of the NCRAs’ June 2022 voluntary
medical debt reporting changes found that because
the vast majority of the impacted consumers would likely have other derogatory
information and FICO® Scores that remain low, the ability of FICO® Scores to rank order
risk on the total population prior to these medical debt collections being excluded is
almost identical to what lenders would experience with these medical debt collections
excluded.207
The NCRAs’ June 2022 medical debt reporting changes removed paid medical
collections from consumer reports and required medical collections to be at least one year past
the date of first delinquency before being included on consumer reports. Though these changes
were more limited in scope than those in the proposed rule, the CFPB expects that an ex-post
analysis of the proposed rule would draw a similar conclusion as the industry analysis above.
Consumers with medical collections on their consumer reports in June 2023, after the NCRA
voluntary reporting changes were fully implemented, had an average credit score of 582, near the
deep subprime cutoff;208 additionally, more than 40 percent had at least one nonmedical

See, e.g., Fed. Nat’l Mortg. Ass’n, Single Family Selling Guide, B3-2-03 (2021), https://sellingguide.fanniemae.com/#Public.20Records.2C.20Foreclosures.2C.20and.20Collection.20Accounts (noting that
“[c]ollection accounts reported as medical collections are not used in the DU [Desk Underwriter] risk assessment”);
Fed. Home Loan Mortg. Corp., The Single-Family Seller/Servicer Guide, 5201.1 (2022),
https://guide.freddiemac.com/app/guide/section/5201.1. See also The White House, Fact Sheet: The Biden
Administration Announces New Actions to Lessen the Burden of Medical Debt and Increase Consumer Protection
(Apr. 11, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/04/11/fact-sheet-the-bidenadministration-announces-new-actions-to-lessen-the-burden-of-medical-debt-and-increase-consumer-protection/
(announcing changes to certain federal government underwriting standards); Ethan Dornhelm, The Impact of
Medical Debt Collections on FICO Scores, FICO Blog (July 13, 2015), https://www.fico.com/blogs/impactmedical-debt-collections-ficor-scores; VantageScore, What was the rationale for removing Medical Debt from
VantageScore 4.0?, https://www.vantagescore.com/faq/what-was-the-rationale-for-removing-medical-debt-fromvantagescore-4-0/ (last visited May 9, 2024).
Tommy Lee, Senior Director, Analytics & Scores, Medical Collection Removals Have Little Impact on FICO
Scores, FICO Blog (June 30, 2022), https://www.fico.com/blogs/medical-collection-removals-have-little-impactfico-scores.
Consumer Fin. Prot. Bureau, Borrower risk profiles, https://www.consumerfinance.gov/data-research/consumercredit-trends/student-loans/borrower-risk-profiles/ (last visited May 9, 2024).
collection and nearly 19 percent had no other tradelines.209 Thin credit files210 and information
about nonmedical collections would remain available to creditors under the proposed rule, to the
extent that creditors use these markers to assess delinquency risk.
The CFPB does not interpret its previous research findings as clear evidence that, holding
all else equal, consumers with medical collections are seriously delinquent at the same rate as
consumers with no medical debt. However, the finding that medical collections are less
predictive of serious delinquency than nonmedical collections, and the remaining presence of
other information such as nonmedical tradelines on the consumer reports of people with medical
collections, suggest that the difference between these two serious delinquency rates is small,
holding all else equal.
An important remaining question is whether consumers with medical debt and medical
collections on their consumer reports are meaningfully more likely to become seriously
delinquent than consumers with medical debt but no medical collections on their consumer
reports, again holding all else equal. At the baseline, many creditors approve applications for
credit without full knowledge of consumer medical debts because most medical debts are not
included on consumer reports, as discussed above. Comparing the performance of credit
accounts that creditors made without medical collections information to the performance of
accounts made with this information would provide the most direct evidence on how the
proposed rule may impact account performance, and therefore, creditors’ profits. Ideally, this
analysis would be performed with data from consumer reports linked with the timing and
presence of consumers’ outstanding and unreported medical debts. However, the CFPB does not

Ryan Sandler & Zachary Blizard, Consumer Fin. Prot. Bureau, Recent Changes in Medical Collections on
Consumer Credit Records Data Point (Mar. 2024), https://files.consumerfinance.gov/f/documents/cfpb_recentchanges-medical-collections-on-consumer-credit-reports_2024-03.pdf.
A thin credit file is a consumer report that contains fewer than five credit accounts. Jennifer White, Experian,
What is a Thin Credit File? (May 25, 2022), https://www.experian.com/blogs/ask-experian/what-is-a-thin-creditfile-and-how-will-it-impact-your-life/.
have access to such linked data and is not aware of such data being available to any researcher or
entity.
The research described in the Technical Appendix provides the closest feasible analysis
of the potential effect of the rulemaking against the baseline by considering if the visibility of
medical collections that remain on consumer reports enables creditors to provide fewer credit
accounts that result in serious delinquency. The CFPB uses de-identified consumer report data
from the CFPB’s CCIP and leverages the 180-day waiting period for reporting medical
collections implemented under NCAP.211 The CFPB’s research considers inquiries made by
creditors to one of the NCRAs in response to an application for credit in the 180 days before a
medical collection was added to a consumer report, using data after the NCAP 180-day waiting
period was implemented in September 2017.212 Credit applications made during this 180-day
period were made by consumers who had outstanding, but unreported, medical collections. The
CFPB’s research finds that the characteristics of inquiries made before and after a medical
collection’s addition to a consumer report are similar; therefore, any difference in the likelihood
that a credit application led to an opened line of credit, or in the performance of those opened
lines of credit, is likely caused by whether or not the creditor observed the consumer’s medical
collection.
The CFPB uses a regression discontinuity design in the Technical Appendix to analyze
how the presence of a medical collection on a consumer report when an inquiry is made affects
the likelihood that the consumer opened a new account in connection with that inquiry. The
CFPB’s data cannot identify the cause of an unsuccessful inquiry, which may include a credit

See part XI, Technical Appendix.

The April 2023 NCRA reporting changes were too recent to be the focus of the analysis in the Technical
Appendix, but the appendix provides heterogeneity results for whether all medical collections were at least $500 to
provide the closest analog to the current lending environment. The CFPB relies on these results to estimate the
impact of the proposed rule.
denial, unfavorable terms, or a change in the consumer’s credit demand.213 For all credit account
categories, the CFPB’s research finds lower inquiry success rates for inquiries made immediately
after a medical collection is added to a consumer report, compared to inquiries made
immediately before a medical collection is added. This implies that creditors use medical
collections information to deny or worsen the terms of credit provided to applicants. Table 1 uses
coefficients estimated in the Technical Appendix (provided in Column 1 of Table 7) to estimate
the annual number of additional credit accounts that would be originated if medical collections
were removed from all consumer reports, all else equal.
Table 1: Estimated Changes in the Number of Originated Loans Under the Proposed
Rule by Credit Account Type214
(1)
Account
type

(2) Estimated
coefficient

(3) Baseline
inquiry success
rate

(4) Expected
percent
change in
originated
accounts

(5) Annual
number of
originated
accounts

Credit
card

-0.047***

26.0%

18.1%

2,014,427

(6)
Expected
change in
annual
originated
accounts
364,611

17.2%

15.1%

144,915

21,882

Mortgage -0.026*

The data used and empirical strategy of the CFPB’s analysis are described in Technical Appendix. This section
describes their estimation of the effect of medical collection reporting on “inquiry success,” or the likelihood that a
hard pull of a consumer report (an inquiry) made by a creditor in response to a consumer’s credit application led to
an originated loan. Under the assumption that inquiries made just before and just after a medical collection is added
to a consumer report have similar underlying delinquency risk and reflect similar consumer preferences for terms
and other loan qualities, differences in inquiry success can be attributed to creditors’ use of medical collections
information in their underwriting processes. These assumptions are justified in the Technical Appendix.
All credit accounts in the CFPB’s CCIP (excluding collections and non-loan information, such as child support
tradelines) are included in one of the three categories of Column 1. Estimated coefficients in Column 2 are taken
from Table 7 in the Technical Appendix. Column 3 includes the baseline inquiry success rate for inquiries made
when medical collections are reported in the sample of the Technical Appendix. These baselines differ from those in
the Technical Appendix because the CFPB reports baseline inquiry success rates for inquiries made when medical
collections are unreported in the Technical Appendix, as it is standard to provide the average of the dependent
variable to the left of the threshold in regression discontinuity analyses. Column 4 calculates the estimated percent
change in the number of loans that would be originated under the proposed rule by first dividing the estimated
coefficient in Column 2 by the baseline average inquiry success rate in Column 3. Column 4 is then multiplied by
negative one because the coefficients in Column 2 were estimated for medical collections moving from being
unreported to reported in the Technical Appendix, but the change here is estimated for medical collections moving
from being reported to unreported. Column 5 includes the number of inquiries made by creditors for consumer
reports with reported medical collections between May 2023 and October 2023 in the CFPB’s CCIP, multiplied by
50 to create a national estimate from the CCIP’s two percent sample, annualized by multiplying by 2, and then
multiplied by the baseline inquiry success rate for people with reported medical collections in Column 3 to estimate
the annual number of credit accounts originated. Column 6 multiplies Column 4 by Column 5 to calculate the
expected change in the number of originated credit accounts under the proposed rule.
(1)
Account
type

(2) Estimated
coefficient

(3) Baseline
inquiry success
rate

(4) Expected
percent
change in
originated
accounts

(5) Annual
number of
originated
accounts

Other
loans

-0.014*

23.9%

5.9%

1,083,879

(6)
Expected
change in
annual
originated
accounts
63,949

Estimates marked with *** are statistically significantly different from zero at the one percent confidence
level. Estimates marked with * are statistically different from zero at the 10 percent confidence level.

For all credit account categories, the CFPB expects that more loans would be originated
if all medical collections were removed from consumer reports provided to creditors under the
proposed rule. The estimates in Columns 5 and 6 are underestimates because not all originated
loans can be connected to an inquiry in the CFPB’s CCIP, as the data only include inquiries
made to one NCRA, and many non-mortgage creditors pull consumer reports from only one or
two NCRAs. Additionally, these estimates assume that credit demand would not change under
the proposed rule. The CFPB’s research in the Technical Appendix finds that consumers are
more likely to apply for credit in the weeks before a medical collection is added to their
consumer report than in the weeks after. However, the characteristics of credit applications made
before and after a medical collection is added (and their associated consumers) do not appear to
have any statistically distinguishable differences between them. This finding suggests that any
increase in credit demand under the proposed rule would not lead to declines in credit application
quality.
To provide further evidence for how credit demand may respond to the proposed rule, the
CFPB used data from the CCIP to estimate if the NCRAs’ voluntary removal of medical
collections under $500 in April 2023 was associated with increased credit demand.215 The CFPB

The CFPB compared the credit demand of “treated” consumers, who had medical collections under $500
included on their consumer reports in the first quarter of 2023, to the credit demand of “control” consumers, who
had medical collections under $500 included on their consumer reports in the last quarter of 2022, but not in 2023.
Neither group had any medical collections over $500 on their consumer reports in 2023. The treated group was
directly affected by the April 2023 removal of medical collections under $500, but the control group was not, though
found that consumers in the treated group were just 0.07 percent less likely to have an associated
inquiry in the six months after medical collections under $500 were removed from their
consumer reports. This suggests that credit demand is not responsive to the removal of medical
collections from consumer reports, at least in the short run.
The CFPB assumes that creditors only make loans at baseline to people with reported
medical collections if they are profitable on average. If the marginal loans that would be made
under the proposed rule have similar revenue potential, the increase in the number of loans made
to people with medical collections would increase creditor profits. To estimate the revenue
potential of originated accounts, the CFPB estimates the likelihood of serious delinquency within
two years of a credit account’s origination date for accounts that are opened in connection with
an inquiry made in the 180 days before or after a medical collection is included on a consumer
report. If creditors effectively use medical collections information in their underwriting decisions
to reduce the delinquency risk of newly opened accounts, one would expect that credit provided
to consumers with outstanding, but unreported, medical collections will have higher delinquency
propensity than credit provided to consumers with outstanding and reported medical collections.
The CFPB’s research in the Technical Appendix finds no statistically significant
evidence to support this hypothesis. Instead, the CFPB’s research finds that credit accounts
provided to people whose medical debts were not included on their consumer reports (as medical
collections tradelines) were no more likely to be seriously delinquent within two years than
credit accounts made to people whose medical collections were included on their consumer
reports, on average. To estimate the effects of the proposed rule, the CFPB estimates the number
of delinquent loans that would be issued if medical collections were not included on consumer
reports, as if the proposed rule is finalized. These ranges also incorporate the evidence from the

both groups likely have similar underlying delinquency risk and credit demand. The CFPB estimated a linear
regression of a binary monthly indicator describing if consumers had an inquiry on their consumer report in each of
the six months between May and October 2023 on a binary indicator describing whether the consumer was in the
treated or control group. The regression further included month fixed effects.

Technical Appendix on how the number of newly originated loans would change, discussed
above. The estimated coefficients from Column 1 of Table 8 in the Technical Appendix are listed
in Table 2 in Column 2.
Table 2: Estimated changes in the number of seriously delinquent loans under the
proposed rule by credit account type216
(1)
Account
type

(2)
Estimated
coefficient

(3) Baseline
D90+ rate

(4)
Expected
change in
annual
originated
accounts

(5) Expected
number of
D90+ accounts
within two
years of
origination at
baseline D90+
rate

Credit card
Mortgage
Other

0.000
0.011
0.012

20.7%
3.1%
17.1%

364,611
21,882
63,949

75,474
678
10,935

(6) Expected
number of
annual D90+
accounts within
two years of
origination at
estimated
delinquency rate
for unreported
medical
collections
75,474
438
10,168

None of the estimated coefficients are statistically significantly different from zero.

The CFPB expects that, at baseline, creditors only provide credit to people with reported
medical collections if they expect a positive profit. As described above and reproduced in
Column 4 of Table 2, the CFPB expects that more accounts are originated under the proposed
rule. If these accounts are delinquent at the same rates as accounts provided to consumers with
reported medical collections, these accounts would increase creditor profits, all else equal.
Instead, the CFPB’s research finds that, for mortgages and other (not credit card and not

All credit accounts in the CFPB’s CCIP (excluding collections and non-loan information, such as child support
tradelines) are included in one of the three categories of Column 1. Estimated coefficients in Column 2 are taken
from Table 8 in the Technical Appendix. Column 3 includes the baseline two-year serious delinquency propensity
for loans opened when medical collections were reported in the sample of the Technical Appendix, though the
CFPB provides baseline inquiry success rates for inquiries made when medical collections are unreported in the
Technical Appendix, as is standard in reporting regression discontinuity results. Column 4 is copied from Column 6
of Table 1. Column 5 multiplies Column 3 by Column 4, describing the expected number of additional accounts that
would be originated under the proposed rule and would be D90+ within two years at the baseline D90+ rate.
Column 6 multiplies Column 4 by the difference between Column 3 and Column 2 (where Column 3 is reflected as
a decimal instead of as a percent, e.g., 20.7 percent is equal to 0.207), describing the expected number of additional
accounts that would be originated under the proposed rule and would be D90+ within two years at the D90+ rate for
accounts originated when consumers have unreported medical collections. Columns 2 and 3 are differenced instead
of added because the coefficients in Column 2 were estimated for medical collections moving from being unreported
to being reported in the Technical Appendix, but the expected impact of the proposed rule is for medical collections
moving from being reported to being unreported.
mortgage) account types, accounts originated by consumers with reported medical collections
have slightly higher delinquency propensity than accounts originated by consumers with
unreported medical collections. These coefficients are not statistically distinguishable from zero,
so the CFPB cannot conclude that the expansion of credit under the proposed rule would yield a
serious delinquency rate that is lower than the serious delinquency rate currently faced by
creditors for accounts they provide to consumers with reported medical collections. However, the
CFPB interprets its findings as evidence against any significant increase in the serious
delinquency rate as compared to the serious delinquency rate for accounts provided to consumers
with reported medical collections at baseline. The CFPB notes that this claim holds if consumer
demand for credit and the supply of credit do not change in response to the proposed rule.
If consumer demand for credit is affected by the proposed rule, the credit applications
that creditors receive may have different underlying delinquency risk. Some consumers may
avoid applying for credit when a medical collection appears on their consumer report if they
understand that this information lowers the likelihood that their credit application will be
approved or provided with favorable terms. Removing medical collections from consumer
reports may lead these consumers to submit credit applications, which could lead to an increase
or decrease in the delinquency risk of applicant pools, depending on how affected consumers’
delinquency propensity compares to that of the average applicant. The CFPB does not have
information available to estimate the direction or magnitude of potential changes.
This may change the propensity for a credit application to lead to an opened credit
account, as well as the performance of opened credit accounts. The CFPB finds that consumers
are less likely to apply for credit after a medical collection is added to their consumer report;
however, the underlying delinquency risk of the remaining credit applications is not statistically
distinguishable from the delinquency risk of credit applications made before the medical
collection is reported. In equilibrium, the CFPB expects that consumer demand for credit may
increase without the use of medical collections information in underwriting, but the CFPB is

unaware of any evidence that either those consumers’ underlying delinquency risk, or creditors’
ability to predict those consumers’ delinquency risk, would change under the proposed rule.
Creditors may change their underwriting processes in response to the proposed rule. The
CFPB’s research in the Technical Appendix analyzed inquiries that were made when some
medical debt information was available to creditors. If creditors instead knew that they could not
generally use any medical debt information in their underwriting processes, they may change
their underwriting models to put more weight on other variables. However, under the assumption
that creditors only change their underwriting models if those changes improve model
performance, creditors’ model updates should only mitigate any potential for reduced account
performance under the proposed rule. That is, any changes that creditors implement will improve
their ability to identify accounts likely to become seriously delinquent, compared to the models
used to evaluate the inquiries observed in the Technical Appendix.
Although the CFPB does not estimate that there would be a significant number of
additional seriously delinquent accounts if the proposed rule were finalized, the CFPB does not
have data available that would enable it to calculate the monetary cost to creditors of such
additional delinquencies as may occur. The CFPB requests information on the dollar cost to
creditors of an account that becomes seriously delinquent within two years of its origination.
Furthermore, the profitability of a loan is not solely defined by its delinquency. For example,
credit card borrowers who carry a balance month-to-month (often termed revolvers), are more
profitable for credit card companies than other types of consumers.217
Under the proposed rule, the CFPB expects that creditors would provide more credit to
consumers without significantly increasing average delinquency rates. The CFPB does not have
data available to quantify the monetary benefit to creditors from these additional accounts. The
CFPB requests comment on this issue.

Robert Adams et al., Bd. of Governors of the Fed. Rsrv. Sys., Credit Card Profitability (Sept. 9, 2022),
https://www.federalreserve.gov/econres/notes/feds-notes/credit-card-profitability-20220909.html.
Aside from the impact on delinquency risk from the change in information, creditors may
incur compliance costs from the proposed rule. Creditors will need to ensure that they are not
unintentionally using medical information in making lending determinations in circumstances
that fall outside the exceptions to the creditor prohibition. These costs should be minor to the
extent that creditors currently only utilize medical debt information provided through consumer
reports. In such cases, so long as the consumer reporting agency providing the consumer report
has complied with the proposed rule, no medical debt information would be conveyed to the
creditor, unless the consumer reporting agency has reason to believe the creditor intends to use
the medical debt information in a manner not prohibited by the creditor prohibition. Creditors
who use consumer reports may have additional costs if they utilize consumer reports from which
the consumer reporting agency has not excluded medical debt information in compliance with
proposed § 1022.38. In such cases creditors would need to employ systems and staff time to
identify and exclude that information. The CFPB requests comment on the compliance costs for
creditors that use consumer reports with this type of information.
In addition, creditors that rely on information outside of consumer reports will face
compliance costs related to identifying medical information from other sources and excluding it
from their underwriting (except as permitted by an exception to the creditor prohibition). The
CFPB does not have data available to quantify the extent or dollar amount of any of these
compliance costs, and requests comment on this issue.
6. Costs and Benefits to Consumers
The proposed rule provides that information about a consumer’s medical debt cannot be
obtained or used by a creditor in connection with any determination of the consumer’s eligibility,
or continued eligibility, for credit, unless one of the narrow, specific exceptions listed in the
regulation apply. This may affect consumers’ access to credit in various ways.
The CFPB expects that the proposed rule would lead to significant benefits for consumers
who have medical debt in collections. The CFPB additionally anticipates significant benefits for

consumers whose medical debt is not in collections and requests information to estimate these
effects. The use of medical debt information in lending determinations compounds the financial
consequences of medical debt, even though medical debt is often incurred without a consumer
having full knowledge of its costs, given the complex nature of medical billing and insurance
coverage. Under the proposed rule, consumers would continue to be liable for their medical
debts. Instead, the proposed rule reduces consumers’ incentives to pay incorrect or erroneous
medical debts and relieves the harm that outstanding medical debt causes to consumers’ credit
access.
As discussed in part VII.E.3, Costs to health care providers, some health care providers
and debt buyers use furnishing of unpaid medical debt, through third-party debt collection
agencies acting as their agents, as a means of inducing payment from consumers. To the extent
that this practice is effective, the proposed rule would reduce those payments induced through
furnishing of unpaid medical debt to consumer reporting agencies. However, consumers with
medical debt would still owe the debt, and health care providers and debt collectors would still
be permitted to collect on that debt. As discussed in parts VII.E.4, Costs to debt collectors and
debt buyers and VII.E.3, Costs to health care providers, some health care providers and debt
collectors may use litigation to induce payment more frequently or instead. The CFPB does not
view any of these scenarios as likely.
The allocation of credit may change across consumers with and without medical debt
relative to the current baseline allocation if creditors change their underwriting practices. Some
consumers may be more likely to be approved for credit, or receive more favorable terms for
credit, if creditors cannot use medical debt information in the manner they do now. The
Technical Appendix estimates meaningful expansions of credit for consumers with reported
medical collections, as described in part VII.E.5, Costs and benefits to creditors, and again
below. Finally, a small number of consumers may become credit invisible or lose their credit
score if medical collections are removed from their consumer reports, though the CFPB expects

that this does not lead to substantial reductions in credit access for affected consumers, as
described below.
The CFPB received feedback from several health care providers during the SBREFA
process stating that the proposed rule would lead them to deny non-emergency care to consumers
who cannot pay upfront or have not paid their previous balances in full. However, these views
are not shared by the CFPB. The CFPB views these outcomes as unlikely given that many health
care providers already require payment before treatment.218
The CFPB expects that the proposed rule would have a small or negligible impact on
consumers’ ability to access emergency medical care, as all hospital emergency rooms that
receive Medicare funds are required to provide emergency medical care, irrespective of an
individual’s ability to pay.219
The CFPB estimates that the impact will be minimal but does not have data or
information available to estimate the exact extent to which the proposed rule would impact the
availability of health care. The CFPB requests comment on this issue, in particular quantitative
estimates of the expected size of these impacts and any disparate regional impact. The CFPB
further requests information from health care providers describing changes in their pricing and
willingness to provide care in response to the voluntary NCRA changes that have greatly reduced
the share of medical debts that are included on consumer reports,220 or in response to the removal
of medical collections from consumer reports subject to restrictions under the laws of states such

Melanie Evans, Hospitals are Refusing to Do Surgeries Unless You Pay in Full First, Wall St. J. (May 9, 2024),
https://www.wsj.com/health/healthcare/hospitals-pay-before-treatment-patients-c477e2d6?mod=hp_lead_pos10.
According to an HFMA survey, 96 percent of health care industry respondents reported having pre-payment or
point-of-service collection policies and procedures. Healthcare Fin. Mgmt. Ass’n, Analyzing pre-payment and pointof-service collections efforts (Aug. 15, 2021), https://www.hfma.org/technology/analyzing-pre-payment-and-pointof-service-collections-efforts/.
Ctrs. for Medicare & Medicaid Servs., Emergency Room Rights, https://www.cms.gov/priorities/your-patientrights/emergency-room-rights (last visited May 9, 2024) (noting Emergency Medical Treatment and Active Labor
Act, 42 U.S.C. 1395dd, protections).
220

See part I.D, Medical debt and consumer reporting (describing the NCRAs’ reporting changes).

as New York or Colorado, or in Connecticut or Virginia after the their laws go into effect in July
2024.221
Some health care providers who submitted comments to the SBREFA Outline stated that
the removal of medical debt from consumer reports would “eliminate” a consumer’s incentive to
pay for a health insurance plan, especially for consumers that are young and in good health. The
providers stated that, as a result, the cost of health insurance will increase for those that do want
or need to be insured. The CFPB does not share this view and expects that the proposed rule
would cause very few consumers to become uninsured. The CFPB understands that the
predominant factor in whether a consumer is likely to have health insurance is whether they have
access to affordable health care coverage, as opposed to other factors. Uninsured consumers cite
“coverage not affordable” and “not eligible for coverage” as the most common reasons for
lacking health insurance.222
In summary, the evidence available to the CFPB finds that people are uninsured largely
because they cannot access health insurance or find it unaffordable, and the CFPB expects that
the proposed rule would be unlikely to affect either of these margins.
The CFPB does not have data to estimate if the proposed rule would reduce on-time
payments for medical services. Even if some consumers were less likely to make on-time
payments, it is not necessarily the case that the proposed rule would significantly reduce health
care providers’ revenues, and thus lead health care providers to take actions. Consumers would
remain liable for their unpaid medical debts under the proposed rule. For patients with ongoing
relationships with providers, health care providers would continue to require payment for pastdue bills at subsequent appointments. Health care providers and debt collectors could continue to

See Colo. Rev. Stat. section 5-18-109; N.Y. Pub. Health Law art. 49-A; 2024 Conn. Act 24-6; 2024 Va. Acts ch.
751.
Jennifer Tolbert et al., Kaiser Fam. Found., Key Facts about the Uninsured Population (Dec. 18, 2023),
https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.
use methods other than furnishing to induce payments, including calls, text messages, letters, and
litigation. Debt collectors who were small entity representatives in the SBREFA process reported
that the average cost of furnishing is $10 per account, compared to $500 for litigation.223 The
CFPB expects that litigation costs may be lower for larger debt collectors, or for larger health
care providers if they sue patients directly, given the potential for economies of scale. Though
the cost of litigation is much higher, so too is the expected recovery. The CFPB understands that,
while consumer reporting sometimes results in the payment of overdue debt, existing research
suggests that consumer debt litigation more often leads to a default judgment in favor of the
plaintiff.224 These judgments can lead to asset seizures or wage garnishment.225 The CFPB
expects that these remaining alternative mechanisms of inducing payment would ensure that
consumers continue to maintain health insurance coverage, apply for financial assistance, and
pay their medical debt under the proposed rule, as the consequences of litigation may be more
severe than the consequences of creditors’ use of medical debt information on consumer reports
in underwriting.
The CFPB expects that the threat of litigation faced by consumers would mitigate
potential costs to health care providers arising from consumers’ failure to pay for medical
services and prevent those costs from being passed on to consumers in the form of reduced care
or higher prices. However, litigation is more costly than furnishing medical debt information to
consumer reporting agencies for consumers, health care providers, and debt collectors. Because
medical debt litigation can impose large costs on consumers, the CFPB has considered if such
litigation would become more common under the proposed rule. In the current baseline, medical

SBREFA Report at 38.

The Pew Charitable Trusts, How Debt Collectors Are Transforming the Business of State Courts (May 6, 2020),
https://www.pewtrusts.org/en/research-and-analysis/reports/2020/05/how-debt-collectors-are-transforming-thebusiness-of-state-courts.
225

Id.

collections are removed from the NCRAs’ consumer reports when paid.226 Consumers seeking
credit may pay medical collections included on their consumer reports to ensure these collections
are removed and unobservable to creditors and improve their credit scores. These consumers
may be more sensitive to the threat of medical debts being furnished or the availability of
medical debt information to creditors than they are to the threat of litigation. The CFPB
understands that, at baseline, some consumers may be pressured to pay debts they do not actually
owe if they have an immediate credit demand, and the removal of furnishing may reduce the
likelihood that these consumers pay spurious debts.227 For the subset of consumers who legally
owe the debt, the proposed rule may lead to increased debt resolution costs if the consumers are
required to pay for the plaintiff’s court filing fees or legal fees, which may occur for the majority
of cases that end in a default judgement against the consumers, as discussed in part VII.E.4 Costs
to debt collectors and debt buyers. At least one debt collector suggested that the proposed rule
may also lead to increased costs for consumers, if debt collectors are currently more likely to
settle medical debts for less than the dollar amount owed when consumers respond to medical
debt collections added to their consumer reports, but may not be willing to settle or will settle
only for relatively high amounts during the course of litigation.228
The CFPB does not have data or information available to estimate the exact extent to
which the proposed rule may affect the use of litigation, relative to the baseline, by debt
collectors who seek to induce payment of medical debts. Because recovery rates on medical
debts are already quite low, as noted above, it is unlikely that any increase in litigation would be

Business Wire, Equifax, Experian, and TransUnion Support U.S. Consumers with Changes to Medical Collection
Debt Reporting (Mar. 18, 2022), https://www.businesswire.com/news/home/20220318005244/en/Equifax-Experianand-TransUnion-Support-U.S.-Consumers-With-Changes-to-Medical-Collection-Debt-Reporting.
See, e.g., Consumer Fin. Prot. Bureau, Fair Debt Collection Practices Act: CFPB Annual Report 2023, at 2-5
(Nov. 2023), https://files.consumerfinance.gov/f/documents/cfpb_fdcpa-annual-report_2023-11.pdf (describing
consumer medical collection complaints received by the CFPB).
Comment from Jennifer Whipple, Collection Bureau Servs., Inc., RE: Small Entity Representative Jennifer
Whipple’s Comment to CFPB regarding the Small Business Review Panel regarding the Fair Credit Reporting Act
Proposal, SBREFA Report app. A.
substantial. The CFPB requests comment on this issue, particularly data or quantitative estimates
of the expected changes in litigation were the rule to go into effect. The CFPB is particularly
interested in data regarding any changes in litigation propensity that have occurred in response to
the voluntary NCRA changes, or the removal of medical collections from consumer reports
subject to restrictions under New York or Colorado law, or in Connecticut or Virginia after their
laws are implemented in July 2024.229
During the SBREFA process, debt collectors expressed concern that creditors would be
concerned about the possibility of providing credit to consumers who cannot pay their medical
debt under the proposed rule. Commenters expected that this may lead creditors to raise interest
rates and fees to account for anticipated increased delinquency rates. However, as described
above in part VII.E.5, Costs and benefits to creditors, the CFPB does not expect that creditors
would experience any significant decline in applicant quality or account performance under the
proposed rule. Instead, the evidence available to the CFPB and described in the Technical
Appendix suggests that creditors would experience an increase in profitable loan volume under
the proposed rule, as market frictions have prevented creditors from fully reaching this more
profitable equilibrium at baseline as described above in part VII.A, Statement of Need.
Therefore, the CFPB expects that the proposed rule would enable creditors to make more loans
that have similar delinquency risk to loans in their existing lending portfolio, and would not lead
to higher credit costs for consumers.
Because commonly used commercial credit scoring models require a minimal number of
credit tradelines to generate a score, some consumers may lose their credit scores if medical
collections are removed from their consumer reports. For instance, FICO will only provide a
credit score if the consumer has at least one credit account that is at least six months old and

See Colo. Rev. Stat. section 5-18-109; N.Y. Pub. Health Law art. 49-A; 2024 Conn. Act 24-6; 2024 Va. Acts ch.
751.
there has been activity on the credit account in the previous six months.230 Similarly,
VantageScore requires at least one tradeline with any activity before providing a score.231 For
consumers with few tradelines, the removal of medical collections could lead them to lose their
credit score. To provide some evidence for the scale of this effect, the CFPB analyzed CCIP data
from the months immediately before and after the NCRAs’ voluntary removal of medical
collections under $500 in April 2023. This internal analysis estimated that these reporting
changes caused approximately 5,500 consumers to lose their credit score, representing
0.03 percent of consumers who had all their medical collections removed because of the April
2023 reporting changes. The median credit score for these consumers before their medical
collections were removed was 581. The CFPB estimates using consumer reports from January
2024 in CFPB’s CCIP as the current baseline, that fewer than 1,000 consumers may lose their
credit scores if all medical collections were to be removed from consumer reports. The median
credit score for these consumers in January 2024 was 573. Though not having a credit score can
reduce access to credit, so too does having a subprime credit score, and the generally low
baseline credit scores of affected consumers indicate that any increase in the population without
credit scores under the proposed rule may not lead to an overall reduction in consumers’ access
to credit. Indeed, as stated by one NCRA, generally “no credit is better than bad credit” for the
purposes of accessing credit.232 The CFPB expects that any reduction in access to credit because
of an increase in the population without credit scores would be very small but requests additional
information.
Despite these potential negative effects, the CFPB expects that consumers with medical
collections included on their consumer reports would experience increased access to credit under

Louis DeNicola, Experian, Improve Credit: How to Establish Credit if You’re Unscoreable (Feb. 12, 2024),
https://www.experian.com/blogs/ask-experian/how-to-establish-credit-if-youre-unscoreable/.
231

Id.

Jim Akin, Experian, Credit Reports & Scores: Is No Credit Better than Bad Credit (Oct. 3, 2022),
https://www.experian.com/blogs/ask-experian/is-no-credit-better-than-bad-credit/.
the proposed rule, in part caused by increases in their credit scores. Consumers with medical
collections on their consumer reports in August 2022 had credit scores that were 30 points higher
in August 2023 than in August 2022, after the implementation of the voluntary removal of
medical collections under $500 in April 2023; consumers without medical collections on their
consumer reports in August 2022 experienced a one-point decline in their average credit scores
by August 2023.233 Evidence from CFPB research suggests that consumers experience a 25-point
increase in their credit score, on average, after their last medical collection is removed from their
consumer report.234 However, the causes of the studied medical collection removals were
unknown, and there may be unobservable factors that caused both the medical collection removal
and increases in consumer credit scores, so these results cannot be interpreted causally. Other
CFPB research has leveraged the recent voluntary removal of medical collections tradelines
below $500, finding that consumers for whom all medical collections were below $500 prior to
the changes saw their credit scores increase 20 points more than consumers who had some
medical collections tradelines above $500.235 For a sample of fewer than 3,000 consumers who
had their medical debts removed from their consumer reports after their debt was relieved by a
nonprofit organization, Kluender et al. (2024) found that credit scores increased by an average of
just three points; however, this sample was not representative of all consumers with medical
debts, as the reported collections were much older on average than most medical collections on
consumer reports.236 VantageScore removed all medical collections from its credit scoring model

Fredric Blavin et al., Urban Wire, Urban Inst., Medical Debt Was Erased from Credit Records for Most
Consumers, Potentially Improving Many Americans’ Lives (Nov. 2, 2023), https://www.urban.org/urbanwire/medical-debt-was-erased-credit-records-most-consumers-potentially-improving-many.
Alyssa Brown & Eric Wilson, Consumer Fin. Prot. Bureau, Consumer Credit and the Removal of Medical
Collections from Credit Reports (Apr. 2023), https://files.consumerfinance.gov/f/documents/cfpb_consumer-creditremoval-medical-collections-from-credit-reports_2023-04.pdf.
Consumer Fin. Prot. Bureau, Data Spotlight: Early Impacts of Removing Low-balance medical collections (May
16, 2023), https://www.consumerfinance.gov/data-research/research-reports/data-spotlight-early-impacts-ofremoving-low-balance-medical-collections/.
Raymond Kluender et al., The effects of medical debt relief: evidence from two randomized experiments, Nat’l
Bureau of Econ. Rsch. Working Paper No. 32315 (Apr. 2024),
https://www.nber.org/system/files/working_papers/w32315/w32315.pdf.
in 2022 and reported that “millions of consumers may see an increase of up to 20 points in their
VantageScore credit scores.”237 The CFPB expects that consumers may experience similar
increases in their credit scores from other credit scoring companies if medical debt information is
removed from consumer reports under the proposed rule. Higher credit scores can lead to higher
loan approval rates and more favorable terms.238 The CFPB requests information on the dollar
value to consumers of higher credit scores.
As described above in the discussion of costs and benefits to creditors, creditors currently
appear to use medical collections information to either deny consumers’ applications for credit or
provide worse terms. Without any changes in the underlying quality of consumer credit
applications or in creditor underwriting practices, consumer credit applications would be more
likely to lead to originated loans if the proposed rule were in effect and creditors could not
observe medical debt information. The CFPB does not have data available to estimate the dollar
value of this increased access to credit, and requests information on the dollar benefit to
consumers of additional lending.
Increases in access to credit through either of these channels may be short-term if credit
scoring companies change their models or creditors change their underwriting practices in
response to the proposed rule. Other consumer report information could receive more or less
weight to compensate for the loss of medical collection information, which could attenuate these
increases or even reduce access to credit for some consumers. However, the CFPB understands
that credit scoring companies and creditors would only implement these changes if the benefit
from doing so outweighed the likely substantial costs of changing these models and procedures.
The results shown in the Technical Appendix suggest that medical collections reporting does not

VantageScore, VantageScore Excluding Medical Debt from Credit Scores (Aug. 12, 2022),
https://www.vantagescore.com/press_releases/vantagescore-excluding-medical-debt-from-credit-scores/.
Consumer Fin. Prot. Bureau, What is a credit score? (Aug. 28, 2023), https://www.consumerfinance.gov/askcfpb/what-is-a-credit-score-en-315/.
enable creditors to make fewer delinquent loans, implying that creditors would not experience
any decline in revenue from the absence of this information. The expected small (or zero) benefit
of recalibrating credit scoring models and underwriting practices may lead to longer-term
increases in access to credit for consumers with medical debt.
Furthermore, consumers facing debt collection attempts may pay or settle debts to
remove the tradelines from their consumer report. Previous research from the CFPB found
evidence indicating that consumers may act to remove medical collections from their consumer
reports when they plan to apply for a mortgage.239 Additionally, a debt collector commenter in
the SBREFA process stated that there would be a “significant decrease in the number of
individuals with overdue medical debt who take proactive steps to resolve their accounts.” This
suggests that furnishing is an effective tool for inducing payment of debts, though other
collection mechanisms, such as litigation, would remain available under the proposed rule.
Consumers with a current need for credit would benefit under the proposed rule from reduced
pressure to pay medical debts before applying for credit. The CFPB does not have data available
to estimate the size of this benefit.
The CFPB understands that many medical collections included on consumer reports
reflect incorrect billing, debts that were already paid by either the consumer or by insurance
companies, or debts that are not owed by the consumer. Nearly half of consumers who made
formal complaints to the CFPB about medical debt collection in 2021 reported that they did not
owe the debt, and many consumers did not know that they had outstanding medical debt until
they discovered a collections tradeline on their consumer report.240 Consumers whose reported
medical debts contain inaccurate information may dispute the information with NCRAs and debt

Alyssa Brown & Eric Wilson, Consumer Fin. Prot. Bureau, Consumer Credit and the Removal of Medical
Collections from Credit Reports (Apr. 2023), https://files.consumerfinance.gov/f/documents/cfpb_consumer-creditremoval-medical-collections-from-credit-reports_2023-04.pdf.
Consumer Fin. Prot. Bureau, Complaint Bulletin: Medical billing and collection issues described in consumer
complaints (Apr. 2022), https://files.consumerfinance.gov/f/documents/cfpb_complaint-bulletin-medicalbilling_report_2022-04.pdf.
collectors at baseline, as discussed above. Consumers would benefit from not needing to dispute
these debts under the proposed rule. The CFPB does not have information available to estimate
how many medical debts are paid despite containing inaccurate information, but expects that
fewer of these erroneous debts would be paid without debt collectors’ use of furnishing. The
CFPB requests comment and submissions of data, or any other relevant information, that may be
helpful in estimating this reduction in erroneous debts paid.
F. Specific Impacts on Consumers in Rural Areas
The potential costs and benefits to consumers of the proposed rule would likely be the
same, on average, for consumers regardless of where they reside. However, consumers who have
outstanding medical debt may be more likely to be affected by the rule. Research by the CFPB
and others shows that medical collections on consumer reports are more common for consumers
who reside in rural areas, compared to those who reside in non-rural areas.241 Therefore, in the
aggregate, the proposed rule may have a disproportionate impact on consumers in rural areas.
Additionally, to the extent that the proposed rule would lead to consumers being denied services
by a health care provider, that cost could be greater for consumers in rural areas, where there are
often fewer options for medical care. The CFPB requests comment as to whether the proposed
rule would have distinct impacts on rural consumers.
G. Specific Impacts on Depository Institutions with $10 Billion or Less in Assets
The CFPB does not expect that the proposed rule would have significantly different
impacts on depository institutions with $10 billion or less in assets, compared to larger
institutions. The CFPB preliminarily concludes that the costs to creditors, described above,
would apply equally to these smaller institutions. The CFPB requests comment as to whether this
conclusion is accurate, and whether there are other costs, not described above, that would apply
specifically to such smaller institutions.

See, e.g., Matthew Liu et al., Consumer Fin. Prot. Bureau, Consumer Finances in Rural Appalachia (Sept. 2022),
https://www.consumerfinance.gov/data-research/research-reports/consumer-finances-in-rural-appalachia/.
H. Specific Impacts on Access to Credit
The CFPB discusses impacts on access to credit in detail above in part VII.F in reference
to potential costs and benefits to consumers. In brief, the CFPB expects that some consumers
would lose their credit score if the proposed rule is finalized, although it is unclear whether this
would decrease these consumers’ access to credit relative to only having medical collections
tradelines. Other consumers would likely see increased access to credit due in part to increased
credit scores.
VIII. Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (RFA) requires the CFPB to conduct an initial regulatory
flexibility analysis (IRFA) and convene a panel to consult with small entity representatives
before proposing a rule subject to notice-and-comment requirements,242 unless it certifies that the
rule will not have a significant economic impact on a substantial number of small entities.243
The CFPB Director hereby certifies that this proposed rule, if adopted, would not have a
significant economic impact on a substantial number of small entities. Thus, neither an IRFA nor
a Small Business Advisory Review Panel (SBREFA Panel) is required. Nonetheless, the CFPB
decided for prudential reasons to include this proposed rule in the SBREFA Panel convened to
address a number of topics under the FCRA on October 18 and 19, 2023, and to provide an
analysis consistent with the requirements of an IRFA. The CFPB requests comments or any
relevant data that may further inform its determination regarding whether the proposed rule
would have a significant economic impact on a substantial number of small entities.
The Small Business Review Panel for this proposed rule is discussed in part III.A.
Among other things, the IRFA contains estimates of the number of small entities that may be

5 U.S.C. 603, 609(b), (d)(2).

5 U.S.C. 605(b).

subject to the proposed rule and describes the impact on those entities. The IRFA for this
proposed rule is set forth in this part.
A. Small Business Review Panel
Under section 609(b) of the RFA, as amended by SBREFA and the CFPA, the CFPB
must seek, prior to publishing the IRFA, information from representatives of small entities that
may potentially be affected by its proposed rules to assess the potential impacts of that rule on
such small entities. While this requirement does not apply where, as here, the agency certifies
that the proposed rule, if adopted, would not have a significant economic impact on a substantial
number of small entities, the CFPB complied with this requirement when it included the
proposed rule in the Small Business Review Panel convened on October 18 and 19, 2023. Details
on the SBREFA Panel and SBREFA Panel Report for this proposed rule are described in part
III.A.
B. Initial Regulatory Flexibility Analysis
1. Description of the Reasons Why Agency Action is Being Considered
The creditor prohibition in section 604(g)(2) of the FCRA reflects Congress’ intention to
protect the privacy of sensitive medical information.244 The creditor prohibition generally
prevents creditors from considering medical information pertaining to a consumer in determining
the consumer’s eligibility, or continued eligibility, for credit. As described in more detail in part
IV.B, Congress allowed certain Agencies, and later the CFPB, to make exceptions to this
prohibition, consistent with the congressional intent “to restrict the use of medical information
for inappropriate purposes.”245 In 2005, the Federal financial agencies and the National Credit
Union Administration promulgated the financial information exception, restated in the CFPB’s
regulations at § 1022.30(d), which allows a creditor to consider certain medical information,
including medical debt information and information relating to expenses, assets, and collateral,

FCRA section 604(g)(2) (15 U.S.C. 1681b(g)(2)).

FCRA section 604(g)(5) (15 U.S.C. 1681b(g)(5)).

pertaining to a consumer in crediting decisions, provided the conditions of a three-part test are
met.246 The CFPB has preliminarily determined that an exception for creditors to consider this
type of medical information for credit eligibility determinations is not “necessary and
appropriate” to protect legitimate operational, transactional, risk, consumer, or other needs, nor is
an exception consistent with the intent of the creditor prohibition to restrict the use of medical
information for inappropriate purposes as required for an exception under FCRA section
604(g)(5). The CFPB has also preliminarily determined that an exception for creditors to
consider medical information relating to a consumer’s expenses, assets, and collateral would not
meet the requirements for an exception under FCRA section 604(g)(5). As a result, the CFPB is
proposing to remove the financial information exception and limit the circumstances under
which consumer reporting agencies can include medical collections information in consumer
reports provided to creditors. Further details may be found in parts I.B and V.
2. Succinct Statement of the Objectives of, and Legal Basis for, the Proposed Rule
The primary objectives of this proposed rule are to enhance consumer privacy with
respect to sensitive medical information and enable creditors to make appropriate credit
decisions based on accurate information, in line with the purposes of the FCRA. The CFPB is
authorized under section 604(g)(5) of the FCRA to promulgate exceptions to the creditor
prohibition “that are determined to be necessary and appropriate to protect legitimate
operational, transactional, risk, consumer, and other needs . . . consistent with the intent of [the
prohibition] to restrict the use of medical information for inappropriate purposes.” The CFPB
also has authority under section 621(e) of the FCRA to issue regulations to carry out the
purposes and objectives of, and to prevent evasions of or to facilitate compliance with, the
FCRA. A discussion of the background leading to the proposed rule may be found in part I, and a
discussion of the legal authority relevant to this proposed rule may be found in part IV.

This background and the three-part test are discussed in part V.A.

3. Description and, Where Feasible, Provision of an Estimate of the Number of Small
Entities to which the Proposed Rule Will Apply
The proposed rule would affect small entities that participate as creditors as that term is
defined in section 702 of the ECOA, except for small entities excluded from coverage by section
1029 of the CFPA, because it would prohibit them from considering certain medical information
in their underwriting decisions. This information has been available to creditors under the
financial information exception. In limiting the circumstances under which medical debt
information can be included on consumer reports, the proposed rule would also affect some
small consumer reporting agencies. Specifically, consumer reporting agencies that currently
provide medical debt information to creditors for credit eligibility determinations would
generally no longer be able to do so.
For the purposes of assessing the impacts of the proposed rule on small entities, “small
entities” are defined in the RFA to include small businesses, small nonprofit organizations, and
small government jurisdictions.247 A “small business” is determined by application of Small
Business Administration (SBA) regulations in reference to the North American Industry
Classification System (NAICS) classification and size standards. 248
There are several NAICS categories of small entities that may be subject to this proposed
rule. Consumer reporting agencies receive and assemble various types of consumer information
and provide consumer reports to third parties for various purposes. Consumer reporting agencies
are mostly contained within the NAICS category “credit bureaus” (561450). However, not all
entities within this NAICS code are consumer reporting agencies, and some consumer reporting
agencies that may fall within this NAICS code may not identify themselves as such.249 Some

5 U.S.C. 601(6)

See U.S. Small Bus. Admin., Table of size standards, https://www.sba.gov/document/support-table-sizestandards (last visited May 13, 2024).
NAICS 561450 also includes mercantile credit reporting bureaus. There may also be a small number of consumer
reporting agencies classified under Investigation and Personal Background Check Services (NAICS 561611).
consumer reporting agencies specialize in providing consumer reports to facilitate other
operations, such as employment screening, check and bank account screening, and insurance.250
Many small consumer reporting agencies would not be affected by the proposed rule, either
because they do not currently furnish consumer reports containing medical debt information or
because, under the proposed rule, consumer reports containing medical debt information may
continue to be provided for purposes other than credit eligibility, such as employment screening
or insurance.
Creditors potentially affected by the proposals under consideration are contained in
multiple NAICS categories. These include depository institutions, such as commercial banks and
credit unions, and non-depository institutions, such as mortgage and non-mortgage loan brokers,
as well as firms that are primarily engaged in sales lending, consumer lending, or real estate
credit. Creditors that currently use medical information related to debts, expenses, assets, and
collateral in connection with a determination of a consumer’s eligibility, or continued eligibility,
for credit would be directly affected by the proposed rule.
The SBA size standards use asset thresholds for depository institutions and revenue
thresholds for non-depository institutions. Depository institutions are small if they have less than
$850 million in assets. Consumer reporting agencies are small if they receive less than $47
million in annual revenues. Non-depository institutions in many industries are small if they
receive less than $47 million in annual revenues, but the threshold is lower for some NAICS
categories of non-depository institutions.
Table 3 shows the number of small businesses within NAICS categories that may be
subject to the proposed rule according to the December 2023 NCUA and FFIEC Call Report data
and the 2017 Economic Census data from the U.S. Census Bureau, which are the most recent

An overview of the types of consumer reporting agencies may be found at: Consumer Fin. Prot. Bureau, List of
consumer reporting companies, https://www.consumerfinance.gov/consumer-tools/credit-reports-andscores/consumer-reporting-companies/ (last visited Apr. 15, 2024). This list is not intended to be all-inclusive and
does not cover every company in the industry.
sources of data available to the CFPB. Entity counts are provided for the specific asset amount
that the SBA uses to define small depository institutions. However, entity counts are not
provided for the specific revenue amounts that the SBA uses to define small entities. For these
entities, Table 3 includes the closest upper and lower estimates for each revenue limit (e.g., a
NAICS category with a maximum size of $47 million in receipts has both the count of entities
with less than $50 million in revenue and the count of entities with less than $40 million in
revenue).
Table 3: Number of Entities within NAICS Industry Codes that May be Subject to the
Proposed Rule

A. Consumer Reporting Agencies
Credit bureaus (561450)
< $35M (Revenues)
< $75M (Revenues)
B. Creditors
Depository Firms
Commercial Banking (522110)
< $850M (Assets)
Credit Unions (522130)
< $850M (Assets)
Savings Institutions and Other Depository Credit
Intermediation (522180)
< $850M (Assets)
Credit Card Issuing (522210)
< $850M (Assets)
Non-Depository Firms
Sales Financing (522220)
< $40M (Revenues)
< $50M (Revenues)
Consumer Lending (522291)
< 40M (Revenues)
< 50M (Revenues)
Real Estate Credit (522292)
< $40M (Revenues)
< $50M (Revenues)
Mortgage and Nonmortgage Loan Brokers (522310)

Number of
Entities

Percent of
Entities

307
279
90.9
92.2

4248
1078
4702
500
322
83
6
1
2367
2112
2124
3037
2905
2915
3289
2872
2904
25.4
10.6

25.8
16.7

89.2
89.7
95.7
96.0
87.3
88.3

< $15M (Revenues)
Financial Transactions Processing, Reserve, and
Clearinghouse Activities (522320)
< $40M (Revenues)
< $50M (Revenues)
Other Activities Related to Credit Intermediation (522390)
< $25M (Revenues)
< $30M (Revenues)

Number of
Entities
6670
3068
2916
2928
3772
3610
Percent of
Entities
98.0

95.0
95.4
95.7
96.0

Table 4 provides the estimated number of small entities within the categories of credit
bureaus, depository institutions, and non-depository institutions, as well as the NAICS codes
these entities may fall within. Under the proposed rule, small consumer reporting agencies would
no longer be able to provide to creditors consumer reports that contain medical debt information
under the financial information exception. The CFPB is not able to precisely estimate the number
of small consumer reporting agencies whose activities would be affected by the proposed rule.
As discussed above, many consumer reporting agencies currently specialize in providing
consumer reports for purposes that would not be affected by the proposed rule. Additionally,
consumer credit markets currently rely heavily on consumer reports from consumer reporting
agencies which are not small entities.251 For these reasons, the CFPB estimates that only a small
fraction of the small consumer reporting agencies identified in Table 4 would be affected by the
proposed rule. The CFPB requests data to more precisely quantify the number of small consumer
reporting agencies that would be affected by the proposed rule.
Small creditors that would be affected by the proposed rule are included in several
NAICS categories that can be broadly divided into depository and non-depository institutions.
Small creditors would be generally prohibited from considering medical information from
consumer reports (and other sources) in credit eligibility determinations under the proposed rule,

Impacts to consumer reporting agencies are also described within part VII.E.

unless a specific exception applies. However, some small creditors currently do not consider
medical information that would be prohibited under the proposed rule, and others only consider
medical debt information if consumers disclose that they have made monthly payment
arrangements with medical debt holders.252
While all small creditors would be subject to the proposed rule, the CFPB lacks the data
to precisely quantify how many small creditors currently make credit decisions in ways that
would be affected by the proposed rule. Small creditors who are currently in compliance,
whether in whole or in part, with the proposed rule might not be impacted as much as small
creditors who currently consider medical debt information (and certain other categories of
medical information) from consumer reports or other sources. The CFPB requests data to
precisely quantify the number of small creditors that may be directly affected by the proposed
rule.
Table 4: Estimated Number of Small Entities by Category253
NAICS
Consumer Reporting
Agencies
Depository Institutions

Non-depository Institutions

561450
522110,
522130,
522180,
522210
522220,
522291,
522292,
522310,
522320,

Small Entity
Threshold

Est. Number of Small
Entities

$41M in revenue
(NAICS 561450)

$850M in assets

$15M in revenue
(NAICS 522310);
$28.5M in revenue
(NAICS 522390)
$47M in revenue

Two small entity representatives provided this context in their comment letters. Written Submission of Evelyn
Schroeder, Vice President, First Security Bank and Trust, to the CFPB, “Re: CFPB’s Outline of Proposals and
Alternatives Under Consideration, Small Business Advisory Review Panel for Consumer Reporting Rulemaking” at
7 (Nov. 6, 2023). Written Submission of Jeff Jacobson, Vice President, New Market Bank, to the CFPB, “RE: SER
response to SBREFA Outline for Consumer Reporting Rulemaking” at 5 (Nov. 6, 2023).
The estimated number of small entities is calculated by taking the sum of the number of entities whose assets
held or annual revenues fall below the relevant SBA thresholds for each NAICS code under the three categories,
using the data presented in Table 3. When entity counts for a NAICS category in Table 3 are reported for two
revenue limits (an upper and a lower bound), the average of the two entity counts is taken to estimate the number of
small entities in that NAICS category.
NAICS
Small Entity
Threshold
(NAICS 522220,
522291, 522292,
522320)

Est. Number of Small
Entities

4. Projected Reporting, Recordkeeping, and Other Compliance Requirements of the
Proposed Rule, Including an Estimate of the Classes of Small Entities which will be
Subject to the Requirement and the Type of Professional Skills Necessary for the
Preparation of the Report
The proposed rule may impose reporting, recordkeeping, and other compliance
requirements on small entities subject to the proposal. These requirements generally differ for
entities in two classes: credit bureaus that function as consumer reporting agencies, and
depository or non-depository institutions that function as creditors. Based on Table 4, these
requirements would be imposed on, at most, an estimated 281 small consumer reporting agencies
and 16,116 small creditors.
Requirements for Consumer Reporting Agencies
Under the proposed rule, consumer reporting agencies would only be able to provide to
creditors (in connection with credit eligibility determinations) consumer reports that contain
medical debt information if they have reason to believe that the creditor intends to use the
medical debt information in a manner that is not prohibited. Thus, if consumer reporting agencies
continue to receive and record medical debt information from furnishers, consumer reporting
agencies may need to devise policies and procedures to ensure that they appropriately restrict the
provision of medical debt information to creditors. However, these compliance costs may only
apply to consumer reporting agencies who, at baseline, provide consumer reports containing
medical debt information to creditors based on the existing financial information exception.
Compliance for affected small consumer reporting agencies would generally require professional
skills related to software development, legal expertise, compliance, and customer support. The
CFPB does not have the data to estimate the costs of reporting, recordkeeping, and other

compliance requirements for small consumer reporting agencies, and requests data to quantify
these costs.
Requirements for Creditors
The proposed rule would generally prohibit creditors from using information related to
medical debt (among other categories of medical information) in credit eligibility decisions.
Creditors may have to change their underwriting procedures to ensure that they are in
compliance with the proposed rule. Currently, many creditors use medical debt information from
consumer reporting agencies that would no longer be available under the proposed rule. The
proposed rule would not change any existing law or guidance regarding the information that
creditors must request from applicants. Creditors may use (or continue to use) certain
information, including information relating to medical debt, that consumers provide in credit
applications to satisfy ability to repay requirements. The proposed rule may cause creditors to
modify their underwriting procedures to rely more heavily on consumer information that they
obtain from credit applications. These changes would generally require professional skills related
to compliance, underwriting, and legal expertise. The CFPB requests data and evidence to
estimate these costs.
5. Identification, to the Extent Practicable, of All Relevant Federal Rules which May
Duplicate, Overlap, or Conflict with the Proposed Rule
In its SBREFA Report, which addressed proposals under consideration for other aspects
of a FCRA rulemaking as well as for the instant rulemaking regarding medical debt, the Panel
identified certain Federal statutes and regulations that address consumer credit eligibility, debt
collection, and privacy issues related to medical or financial information, as having provisions
that may duplicate, overlap, or conflict with certain aspects of the proposals under
consideration.254 Each of the statutes and regulations identified in the SBREFA Report, as well
as additional statutes and regulations that may be relevant, is discussed below.

SBREFA Report at 36.

TILA255 and the CFPB’s implementing regulation, Regulation Z, 12 CFR part 1026,
impose disclosure and other requirements on creditors. For example, TILA and Regulation Z
generally prohibit creditors from making mortgage loans unless they make a reasonable and
good faith determination that the consumer will have the ability to repay the loan. TILA and
Regulation Z also contain ability-to-pay requirements for credit cards.
ECOA256 and the CFPB’s implementing regulation, Regulation B, 12 CFR part 1002,
prohibit creditors from discriminating in any aspect of a credit transaction, including a businesspurpose transaction, on the basis of race, color, religion, national origin, sex, marital status, age
(if the applicant is old enough to enter into a contract), receipt of income from any public
assistance program, or the exercise in good faith of a right under the Consumer Credit Protection
Act.
The Fair Debt Collection Practices Act (FDCPA)257 and the CFPB’s implementing
regulation, Regulation F, 12 CFR part 1006, govern certain activities of debt collectors, as that
term is defined in the FDCPA. Among other things, the FDCPA and Regulation F prohibit debt
collectors from engaging in unfair, deceptive, or abusive conduct when collecting or attempting
to collect debts and require debt collectors to make certain disclosures to consumers in debt
collection.
The Gramm-Leach-Bliley Act (GLBA)258 and the CFPB’s implementing regulation,
Regulation P, 12 CFR part 1016, require financial institutions subject to the CFPB’s jurisdiction
to provide their customers with notices concerning their privacy policies and practices, among
other things. They also place certain limitations on the disclosure of nonpublic personal
information to nonaffiliated third parties, and on the redisclosure and reuse of such information.

15 U.S.C. 1601 et seq.

15 U.S.C. 1691 et seq.

15 U.S.C. 1692 et seq.

15 U.S.C. 6801 et seq.

Other parts of the GLBA, as implemented by regulations and guidelines of certain other Federal
agencies (e.g., the Federal Trade Commission’s Safeguards Rule and the prudential regulators’
Safeguards Guidelines), set forth standards for administrative, technical, and physical safeguards
with respect to financial institutions’ customer information.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA)259 and the
Department of Health and Human Services’ implementing regulations,260 also limit or regulate
the use, collection, and sharing of certain health information. Among other things, HIPAA, as
implemented by HHS regulations, sets national standards for the protection of individually
identifiable health information by health plans, health care clearinghouses, and health care
providers, as well as the security of electronic protected health information.
The Americans with Disabilities Act261 and its implementing regulations, 28 CFR parts
35 and 36, prohibit discrimination against people with disabilities in many aspects of public life.
Similarly, the Fair Housing Act prohibits unlawful discrimination in all aspects of residential real
estate-related transactions.262
Small entity representatives also provided suggestions of other potentially related Federal
statutes and regulations, such as the Patient Protection and Affordable Care Act,263 the No
Surprises Act,264 and Medicare cost reporting rules.265
The CFPB requests comment to identify any additional such Federal statutes or
regulations that may impose duplicative, overlapping, or conflicting requirements on financial
institutions and potential changes to the proposed rules in light of such duplicative, overlapping,

Pub. L. 104-191, 110 Stat. 1936 (1996)

See 45 CFR parts 160 and 164.

42 U.S.C. 12101 et seq.

42 U.S.C. 3605 (prohibiting discrimination because of race, color, religion, national origin, sex, handicap, or
familial status in residential real estate-related transactions); see also 24 CFR part 100.
263

Pub. L. 111-148, 124 Stat. 119 (2010).

42 U.S.C. 300gg-111 et seq.

See 42 CFR ch. IV.

or conflicting requirements, if any. The CFPB further requests comment on methods to minimize
such conflicts to the extent they might exist.
6. Description of Any Significant Alternatives to the Proposed Rule which Accomplish the
Stated Objectives of Applicable Statutes and Minimize Any Significant Economic Impact
of the Proposed Rule on Small Entities
The CFPB considered several alternatives to the proposed rule that would possibly result
in lower costs for small entities. These alternatives include: (1) alternative compliance timelines,
(2) allowing creditors to consider specific types of medical information, (3) codifying and
broadening the voluntary changes in medical collections reporting implemented by the NCRAs
in 2022 and 2023, (4) requiring consumer reporting agencies to independently investigate the
accuracy of furnished medical debt collections, and (5) defining when a furnisher must
investigate the accuracy of furnished medical collections information. The CFPB also considered
exemptions for small entities. However, the CFPB has preliminarily determined that such
exemptions would not achieve the objective of FCRA section 604(g)(2) and the proposed rule to
protect consumer privacy with respect to sensitive medical information.
The CFPB considered making the proposed rule effective more than 60 days after the
issuance of a final rule. During the SBREFA process, several small creditors stated that they
would need time to comply with the proposals discussed at the panel. One small creditor stated
that their compliance department is already working at full capacity to comply with recently
issued rules, and that they and others in the financial industry will need additional time to
comply with further rules. The CFPB has preliminarily determined that compliance with the
proposed rule would not impose a significant economic impact on a substantial number of small
entities. Further, allowing additional time for compliance would extend the period during which
sensitive medical information may continue to be used for credit eligibility determinations.
As described in the SBREFA Outline, the CFPB considered removing the financial
information exception only with respect to medical information relating to debts, while
continuing to allow creditors to consider medical information relating to expenses, assets,

collateral, income, benefits, and the purpose of the loan. The CFPB has preliminarily determined
that a creditor’s consideration of medical information relating to expenses, assets, and collateral
is not warranted, and has therefore proposed to remove the financial information exception with
respect to these additional categories of medical information.
The final three alternatives considered may not achieve some of the objectives of the
proposed rule. These alternatives were included in the discussions with small entity
representatives and the SBREFA Panel. As discussed in part VII.D, the NCRAs voluntarily
implemented changes in the credit reporting of medical debt. Because their changes were
voluntary, codifying and broadening the changes may protect consumers from the possibility that
NCRAs might choose to reverse their policies in the future. The last two alternatives would serve
to increase the accuracy of medical collections information on credit reports. The CFPB has
preliminarily determined that these three alternatives would not achieve the objective of
protecting consumer privacy with respect to sensitive medical information.
7. Discussion of Impact on Cost of Credit for Small Entities
Because the proposed rule would only affect how small creditors and small consumer
reporting agencies obtain or use consumers’ medical information, the CFPB does not expect that
the proposed rule would affect the business lending market. The CFPB preliminarily concludes
that the costs of credit for small creditors and small consumer reporting agencies would not be
impacted by the proposed rule. The CFPB requests comment as to whether this conclusion is
accurate, and any information that may inform this analysis.
IX. Severability
The CFPB preliminarily intends that, if the consumer reporting agency prohibition on
furnishing medical debt information proposed in § 1022.38 (or any provision or application of
that section) is stayed or determined to be invalid, the proposed amendments to § 1022.30 are
severable and shall continue in effect. But because proposed § 1022.38 relies on the proposed
amendments to § 1022.30, if the proposed amendments to § 1022.30 (or any provisions or

applications of those amendments) were stayed or determined to be invalid, the CFPB
preliminarily intends that § 1022.38 would not take (or continue in) effect. Furthermore, if the
result of a stay or judicial determination is that creditors are generally able to obtain or use
medical information in connection with determinations of consumers’ eligibility, or continued
eligibility, for credit, the CFPB intends the current version of § 1022.30(d) to continue in effect.
X. Paperwork Reduction Act
The CFPB has determined that the proposed rule would have de minimis burden and
therefore, would not impose any new information collections or revise any existing
recordkeeping, reporting, or disclosure requirements on covered entities or members of the
public that would be collections of information requiring approval by the Office of Management
and Budget under the Paperwork Reduction Act.266
XI. Technical Appendix
This appendix describes the technical details of the CFPB’s analysis that aims to estimate
how medical collection consumer reporting affects consumer access to credit, considering an
“equilibrium” in which all medical collections are removed from consumer reports, as under the
proposed rule. The analysis also compares the performance of new credit accounts that can be
traced to creditors’ inquiries for consumers that have medical collections. The analysis exploits a
change in consumer reporting practices that occurred in 2017 that has prevented medical
collections that are less than 180 days past their date of first delinquency from appearing on
consumer reports obtained from the nationwide consumer reporting agencies (NCRAs).267 As a
result of this change, when consumers applied for credit in the 180 days before a medical
collection was added to their consumer report, they had an outstanding medical debt that was in

44 U.S.C. 3501.

Assurance of Voluntary Compliance/Assurance of Voluntary Discontinuance (May 20, 2015), In re Equifax Info.
Servs., https://www.ohioattorneygeneral.gov/Files/Briefing-Room/News-Releases/Consumer-Protection/2015-0520-CRAs-AVC.aspx.https://www.ohioattorneygeneral.gov/Files/Briefing-Room/News-Releases/ConsumerProtection/2015-05-20-CRAs-AVC.aspx.
collections, but creditors would not have seen evidence of those medical collections on consumer
reports when making determinations about whether to extend credit to the consumers.268
1. Data Used
The data for this analysis are derived from the CFPB’s Consumer Credit Information
Panel (CCIP), a 1-in-50 de-identified nationally representative sample of credit records from one
of the three NCRAs. The data include information on consumers’ credit accounts, collections,
public records, credit scores, and inquiries, which are creditor requests for consumer reports.
Each credit account is described by a “tradeline,” which includes the account’s product type,
balance amount, initial credit limit or loan principal, date of origination, anonymized firm
identifier, and delinquency status.269 Collections are also described by tradelines, which include
the collection’s balance amount, the original creditor’s industry classification, and the date that
the collection was added to the consumer report. Each inquiry includes the product type for
which the consumer applied and the date that the inquiry was made. The sample used in the
analysis includes all inquiries made by creditors within 180 days of a medical collection’s
addition to a consumer report. In other words, the sample includes inquiries made within 180
days of the time each medical collection became visible to creditors.
The CFPB created two datasets to estimate the effect of medical collection reporting on
access to credit and credit account performance. The first dataset includes all inquiries made in
the 180 days before and after each medical collection’s addition to a consumer report (inquiry
dataset). The second dataset includes the two-year performance of all credit account tradelines

This practice continued through June 2022, when the 180-day period was extended to one year. PR Newswire,
Equifax, Experian and TransUnion Remove Medical Collections Debt Under $500 From U.S. Credit Reports (Apr.
11, 2023), https://www.prnewswire.com/news-releases/equifax-experian-and-transunion-remove-medicalcollections-debt-under-500-from-us-credit-reports-301793769.html.
Credit record data are described in detail by Christa Gibbs et al., Consumer Fin. Prot. Bureau, Consumer Credit
Reporting Data (Dec. 6, 2023), https://bguttmankenney.github.io/Public/CreditDataJEL.pdf.
that can be traced back to an inquiry in the inquiry dataset (performance dataset).270 Both
datasets only include inquiries made and credit account tradelines opened in response to credit
applications from consumers with medical collections.
The analysis is limited to inquiries associated with medical collections first reported at
least six months after the final implementation of the NCAP in September 2017, which ensured
that all medical collections were identifiable as such and that all consumers with reported
medical collections had a past-due medical bill for at least 180 days prior to the medical
collection’s appearance on their consumer report.271 Given these constraints, the dataset includes
inquiries associated with medical collections that were furnished to the NCRA that provides the
CFPB’s CCIP between March 2018 and July 2023.272
Each dataset includes a subsample of inquiries and tradelines that were associated with
medical collections having initial balances over $500 and that were made when any other
medical collections on the consumer report had initial balances over $500. This specification is
referred to as the “over-$500” sample and mimics the current reporting environment in which

The CFPB considered two-year delinquency as an outcome because it is the standard used in credit scoring
models. VantageScore, Credit Score Basics, Part 1: What’s Behind Credit Scores? (Nov. 2011),
https://www.transunion.com/docs/rev/business/financialservices/VantageScore_CreditScoreBasics-Part1.pdf.
Prior to NCAP, the field in credit record data indicating the original creditor type of a collections tradeline was
optional and was left blank by the furnisher for around a quarter of all collections tradelines in the CCIP. Some of
these tradelines with unreported original creditor type were likely medical collections tradelines. One component of
the NCAP was to make the original creditor type a mandatory field, such that all medical collections reported after
September 2017 can be identified as such.
The sample is limited to inquiries associated with medical collections added to consumer reports between March
2018 and July 2023 because the dataset needs to include all inquiries made within a 361-day window of each
medical collection. A medical collection reported before March 2018 may have an associated inquiry that was made
before the September 2017 reporting change, while a medical collection reported after July 2023 may have an
associated inquiry that was made after the final date of the CFPB’s CCIP at the time of the research analysis,
January 2024. The sample includes inquiries made in the 180 days before a medical collection is reported because
all consumers have an outstanding medical collection during that period, and includes inquiries made in the 180
days after a medical collection is reported in order to have a balanced window. Additionally, note that the sample
may omit some inquiries associated with medical collections. Some collections may not have been reported to all
three NCRAs, so the CFPB may not observe all consumers’ medical collections. Consumer Fin. Prot. Bureau, Paid
and Low-Balance Medical Collections on Consumer Credit Reports (July 27, 2022),
https://www.consumerfinance.gov/data-research/research-reports/paid-and-low-balance-medical-collections-onconsumer-credit-reports/.
medical collections under $500 are not included on consumer reports.273 This is the primary
sample considered in the analysis, but results for the full sample (which includes inquiries
associated with medical collections under $500 and inquiries made when medical collections
under $500 appeared on the consumer report) are also provided.
The inquiry and performance datasets are structured at the inquiry or credit account
tradeline level, and not at the consumer or medical collection level. This means the analysis can
be interpreted as modeling credit decisions and outcomes from creditors’ perspective, rather than
modeling the decisions of consumers or debt collectors.
When a consumer has multiple medical collections, the data contain duplicates of the
inquiries and credit account tradelines if they occur within 180 days of different medical
collections. For example, suppose a consumer has two medical collections that are first reported
on May 1 and on September 1. Suppose a creditor makes an inquiry on August 1. This inquiry
will appear in the inquiry dataset twice: once for the May 1 collection, and once for the
September 1 collection. Inquiries and credit account tradelines are also duplicated when
consumers have multiple medical collections reported on the same day.
Three reporting changes occurred during the sample period that removed certain types of
medical collections from consumer reports.274 However, because the analysis exploits the date
that a medical collection was added to a consumer report instead of the date it was removed from
a consumer report, these changes do not undermine the general methodology of the analysis. The
reporting changes do affect the types of medical collections that were on consumer reports when

The NCRAs removed medical collections with balances below $500 from consumer reports in April 2023. The
datasets include inquiries made through January 2024, and so a small portion of the inquiries in the datasets were
subject to this removal. All of these inquiries are included in the “over-$500” sample of the results. See PR
Newswire, Equifax, Experian and TransUnion Remove Medical Collections Debt Under $500 From U.S. Credit
Reports (Apr. 11, 2023), https://www.prnewswire.com/news-releases/equifax-experian-and-transunion-removemedical-collections-debt-under-500-from-us-credit-reports-301793769.html.
PR Newswire, Equifax, Experian and TransUnion Remove Medical Collections Debt Under $500 From U.S.
Credit Reports (Apr. 11, 2023), https://www.prnewswire.com/news-releases/equifax-experian-and-transunionremove-medical-collections-debt-under-500-from-us-credit-reports-301793769.html.
inquiries were made.275 The CFPB first describes each of these three changes and their impact,
before addressing the consequences for the analysis. First, all paid medical collections were
removed from consumer reports in June 2022. Fewer than 2.5 percent of medical collections
reported between January 2017 and March 2022 were ever marked as paid.276 Second, medical
collections that were between 180 days and 365 days past due were removed from consumer
reports in June 2022, and the delay before medical collections could be added to consumer
reports was permanently extended to one year. The CFPB does not have an estimate of how
many medical collections were affected by this change, as the number of days that the medical
debt is past due is not provided in the CCIP. Finally, all medical collections under $500 were
removed from the NCRAs’ consumer reports in April 2023. Combined, these reporting changes
contributed to a large decline in the number of consumers with medical collections on their
consumer report, from 14 percent of consumers in March 2022 to 5 percent of consumers in June
2023.277
Because of these reporting changes for some inquiries that were made after a medical
collection tradeline was first reported, the medical collection may not have been present on the
consumer report by the date of the inquiry. For example, if a consumer had a medical collection
with an initial balance less than $500 first reported in February 2023, and an inquiry in May
2023, the inquiry would be classified as occurring about three months after the collection but
would not in fact have that collection included on the consumer report at the time of the inquiry.

Furthermore, the reporting changes may impact how creditors used medical collections in their credit eligibility
determinations. For example, suppose creditors weighted medical collections more heavily in their determinations
after the April 2023 reporting change. Then inquiries made with reported medical collections after April 2023 may
have a lower success rate than inquiries made prior to the change. The estimated coefficient provides an average
impact of medical collection reporting on inquiry success and cannot identify these potential changes in creditor
behavior.
Lucas Nathe & Ryan Sandler, Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on
Consumer Credit Reports (July 2022), https://www.consumerfinance.gov/data-research/research-reports/paid-andlow-balance-medical-collections-on-consumer-credit-reports/.
Ryan Sandler & Zachary Blizard, Consumer Fin. Prot. Bureau, Recent Changes in Medical Collections on
Consumer Credit Records Data Point, at 3-4, 17 (Mar. 2024),
https://files.consumerfinance.gov/f/documents/cfpb_recent-changes-medical-collections-on-consumer-creditreports_2024-03.pdf.
The CFPB expects this to attenuate the results, as inquiries made “with medical collection
reporting” would have outcomes more similar to inquiries with the medical collection not yet
reported. Medical collections reported before January 2022 would not have associated inquiries
affected by any of these reporting changes.
The analysis of the performance dataset is not affected by the recent reporting changes.
Because the focus is on two-year performance, the performance analysis only included tradelines
opened before January 2022, as they require sufficient time to measure two-year performance.
Therefore, the performance regressions are not impacted by these medical collection removals.
2. Construction of the Inquiry Dataset
Because inquiries in the dataset are made in the 180 days before and after a medical
collection is reported, the inquiries in the dataset occurred between September 2017 and January
2024. The dataset includes the number and type of medical and nonmedical collections that were
included on the consumer report at the time each inquiry was made.
Identifying unique medical collections over time in the CCIP may be imprecise; the
CFPB assumes that unique medical collections are characterized by their dollar amounts, dates of
medical collection account opening (usually the date the medical collection was assigned to the
debt collector or other furnisher), and dates of the account’s addition to the consumer report.
Medical collections are rarely consistently reported for the full seven-year period for reporting
adverse information permitted by the Fair Credit Reporting Act.278 This poses challenges in
tracking the same medical debt over time, as debts can disappear and reappear. Medical debts in
collections are often transferred between debt collectors (e.g., reassigned to a different collector
by the health care provider or sold to a debt buyer), and when this happens the dates and dollar
amounts associated with the medical collection tradelines may change, making it difficult to link

Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on Consumer Credit Reports (July 27,
2022), https://www.consumerfinance.gov/data-research/research-reports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/.
these records. While these may be experienced as unique collections by the consumer as a new
debt collector attempts to make contact, they may not be representative of the number of unique
medical debts that each consumer has, as many of the debts are reflected by multiple subsequent
collections.279
The inquiry dataset is used to estimate the impact of medical collection reporting on
consumers’ access to credit, as measured by inquiry success. The CFPB classifies an inquiry as
“successful” if the inquiry leads to an open tradeline. This definition of “success” does not
necessarily mean that the specific credit application that generated the inquiry was being
approved. The CFPB cannot directly observe whether the specific credit application that
generated the inquiry in question was approved, and it is challenging to infer approval for a
specific inquiry for several reasons. First, the CCIP does not include inquiries made to other
NCRAs, and creditors do not always make inquiries to all three NCRAs. The CCIP therefore
includes credit account tradelines that cannot be matched to an inquiry. These tradelines cannot
be included in the CFPB’s analysis because the empirical strategy requires that one know the
date of each tradeline’s associated inquiry. Second, the CCIP does not include creditor names,
but instead has an anonymized company identifier; however, a particular creditor often has a
different identifier for inquiries and for opened credit account tradelines. Thus, even if the
consumer opened a tradeline with the same creditor that pulled their consumer report, it may not
be identifiable as such in the data. Therefore, the CFPB cannot be certain that the observed
inquiry is associated with a specific opened tradeline. The CFPB instead follows approaches
used in academic research and the CFPB’s Consumer Credit Trends credit tightness series and
assumes that a credit account is associated with an inquiry if it is opened within a certain

A challenge in studying the impact of medical collections tradelines is that a shock to consumers’ health, such as
an injury or illness that results in hospitalization, may affect credit outcomes independently. Given this challenge,
one benefit of these collection debt transfers is that it means that the medical expense that resulted in the medical
collections tradeline is relatively more likely to have occurred long before the medical collection appeared.
number of days after the observed inquiry and is of the same credit account type.280 The number
of days varies for different account types because of differences in the typical length of time
between an account application and origination.281 Finally, when consumers shop for credit,
multiple inquiries may be made in a narrow window of time, even though the consumer only
intends to open one account. The CFPB assumes that multiple inquiries for one consumer within
a certain shopping window indicate the consumer’s shopping behavior, and therefore only the
last of these inquiries is included in the datasets, where each credit account type’s window length
is equivalent to its maximum time-to-origination.282 For example, if a consumer had inquiries
from mortgage lenders on April 1 and May 1, these would be treated as one observation, dated
May 1, and it would be counted as a successful inquiry if a mortgage account was opened by
August 29.
3. Construction of the Performance Dataset
The performance dataset includes all originated credit account tradelines that are
associated with successful inquiries in the inquiry dataset. The match between credit account
tradelines and inquiries is one-to-one: each tradeline is matched to one inquiry, and each inquiry
is matched to, at most, one tradeline.283 The CFPB calculated the two-year performance for each

See Charles Romeo & Ryan Sandler, Off. of Rsch., Consumer Fin. Prot. Bureau, The effect of debt collection
laws on access to credit, 195 J. Econ. (2021), https://ssrn.com/abstract=3124954; Consumer Fin. Prot. Bureau,
Credit Trends: Market dashboards (Dec. 10, 2019), https://www.consumerfinance.gov/data-research/consumercredit-trends/.
The inquiries are considered to be within a shopping window if they are within 14 days for credit cards and auto
loans, 120 days for mortgages, and 30 days for all other loan types, following approaches used in academic research
and the CFPB’s Consumer Credit Trends credit tightness series, both of which use data similar to the CCIP. See
Charles Romeo & Ryan Sandler, Off. of Rsch., Consumer Fin. Prot. Bureau, The effect of debt collection laws on
access to credit, 195 J. Econ. (2021), https://ssrn.com/abstract=3124954; Consumer Fin. Prot. Bureau, Credit
Trends: Market dashboards (Dec. 10, 2019), https://www.consumerfinance.gov/data-research/consumer-credittrends/.
This follows approaches used in academic research and the CFPB’s Consumer Credit Trends credit tightness
series, both of which use data similar to the CCIP. See Charles Romeo & Ryan Sandler, Off. of Rsch., Consumer
Fin. Prot. Bureau, The effect of debt collection laws on access to credit, 195 J. Econ. (2021),
https://ssrn.com/abstract=3124954; Consumer Fin. Prot. Bureau, Credit Trends: Market dashboards (Dec. 10,
2019), https://www.consumerfinance.gov/data-research/consumer-credit-trends/.
When multiple credit account tradelines within a time 14, 30, or 120 days of an inquiry (as appropriate for the
type of credit) are observed, the tradeline with the earliest origination date is kept.
originated credit account tradeline, with performance success measured by whether the tradeline
was ever 90 or more days delinquent (seriously delinquent) within the first two years of its
origination date.284 Because the CFPB focuses on two-year performance, credit account
tradelines opened after January 2022 are not included in the analysis as the CFPB cannot observe
a full two years after origination. The CFPB was able to identify the two-year performance of
over 94 percent of the credit account tradelines opened before January 2022. The exceptions are
accounts that stopped being reported by the furnisher before the end of two years.
The inquiry and performance datasets are structured at the inquiry or credit account
tradeline level, and not at the consumer or medical collection level. This means the econometric
analysis can be interpreted as modeling creditor decisions and creditor outcomes, as viewed from
creditors’ perspectives, rather than modeling the decisions of consumers or debt collectors.
When a consumer has multiple medical collections, the data contain duplicates of the
inquiries and credit account tradelines if they occur within 180 days of different medical
collections. For example, suppose a consumer has two medical collections that are first reported
on May 1 and on September 1. Suppose a creditor makes an inquiry on August 1. This inquiry
will appear in the inquiry dataset twice: once for the May 1 collection, and once for the
September 1 collection. Inquiries and credit account tradelines are also duplicated when
consumers have multiple medical collections reported on the same day.

Credit account tradelines are matched over time either using the tradeline’s account number or the tradeline’s
date of account opening and loan type. Tradelines are matched on origination date and loan type when there is no
match on account number because account numbers can change when an account is lost or transferred, e.g., if a
consumer loses their credit card and has a new card issued.
4. Inquiry Summary Statistics
Table 5: Inquiry Summary Statistics285

Each panel in the table includes one observation per inquiry. All values are means. Panels A and B limit the
sample to consumers with at least one inquiry that is associated with a medical collection over $500 and includes no
medical collections on the consumer report under $500 when the inquiry is made. Panels C and D include the full
sample. Panels A and C includes all inquiries that do not correspond to a tradeline opened within the inquiry type’s
origination window. Panels B and D includes all inquiries that can be matched to an originated tradeline. “Shopping
window (days)” provides the length of the shopping window for each inquiry, where the shopping window is equal
to zero if all inquiries are made on the same day. Variables providing the number of open accounts for a given credit
account type, “No. open”, describe the number of accounts of a given type that appeared on the consumer report in
the month before the inquiry. “Any D90+ trades” is equal to one if the consumer had at least one tradeline (open or
closed) that had been at least 90+ days delinquent in the last seven years included on their consumer report in the
month before the inquiry. “Credit score” is equal to the credit score in the month before the inquiry. “Credit
amount”, “Two-year D90+”, and “Past due amount” describe tradelines that opened in response to the inquiry,
where “Credit amount” provides the credit limit of revolving accounts or credit account principal of installment
accounts, “Two-year D90+” is equal to one if the account is at least 90 days delinquent within two years of its
origination date, and “Past due amount” is the dollar amount past due on the account after two years. These variables
cannot be included in Panels A and C because no account was opened in response to unsuccessful inquiries.
(1) Credit cards

(2) Mortgages

(3) Other
Type

Inq.

Panel A: Unsuccessful,
Over $500 Sample
Shopping window (days)

0.47

16.87

0.89

No. open mortgages

0.03

0.11

0.04

No. open credit cards
No. open other trades
Any D90+ trades
Credit score
Obs. (Unique Inquiries)
Panel B: Successful, Over
$500 Sample
Shopping window (days)
No. open mortgages
No. open credit cards
No. open other trades
Any D90+ delinquent
trades
Credit score
Credit amount
Two-year D90+
Past due amount
Obs. (Unique Inquiries)
Panel C: Unsuccessful,
Full Sample
Shopping window (days)
No. open mortgages
No. open credit cards
No. open other trades
Any D90+ trades
Credit score
Obs. (Unique Inquiries)
Panel D: Successful, Full
Sample
Shopping window (days)
No. open mortgages
No. open credit cards
No. open other trades
Any D90+ trades
Credit score
Credit amount
Two-year D90+
Past due amount
Obs. (Unique Inquiries)

0.73
0.61
0.30
563.89
1.18
0.82
0.29
613.81
0.68
0.64
0.29
566.76
1.00
0.07
1.36
0.71
0.26

42.74
0.23
1.85
0.99
0.20

1.11
0.07
1.11
1.08
0.29

624.44
1645.96
0.21
145.19
673.12
244846.31
0.03
304.43
602.45
5374.88
0.25
661.84
0.46
0.03
0.69
0.56
0.30
562.12
16.09
0.12
1.15
0.80
0.30
607.76
0.86
0.04
0.64
0.60
0.30
563.39
0.97
0.08
1.32
0.70
0.27
621.08
1582.59
0.20
125.17
40.69
0.26
1.84
0.96
0.20
670.13
238199.13
0.03
201.84
1.06
0.06
0.98
1.04
0.30
597.12
5597.18
0.23
598.32
Table 5 provides summary statistics for the unique inquiries in the data. The summary
statistics are provided separately for “unsuccessful” inquiries that do not result in originated

credit account tradelines, which are provided in Panels A and C, and for “successful” inquiries
that can be associated to originated tradelines, which are provided in Panels B and D. Panels A
and B are limited to the over-$500 sample, while Panels C and D provide summary statistics for
the full sample. Table 5 shows that successful inquiries are associated with stronger credit
profiles for every inquiry type and for both considered samples. The average successful credit
applicant has more open pre-existing credit account tradelines, fewer seriously delinquent preexisting credit account tradelines, and a higher credit score in the month or quarter before inquiry
was made than the average unsuccessful credit applicant.286 The table also shows that successful
credit applicants shop for longer than unsuccessful credit applicants in the sample. Panels B and
D further include the average characteristics of credit accounts opened in response to successful
inquiries, measuring the credit limit at time of origination, the past due amount, and serious
delinquency status two years after origination, showing that credit cards are much more likely
than mortgages to be seriously delinquent within two years from opening, perhaps in part
because credit cards are unsecured. However, the average past due amount is lower for credit
cards, perhaps because average credit card monthly minimum payments are much lower than
mortgage monthly payment amounts.

These characteristics are considered as of the month or quarter before the inquiry because they can be affected by
the outcome of the inquiry. The month before the inquiry is used when data is available, but only quarterly data are
available prior to 2020 for some variables.
5. Consumer Summary Statistics
Table 6: Consumer Summary Statistics287

Each panel in the table includes one observation per consumer. All values are means. Panel A limits the sample
to consumers with at least one inquiry that is associated with a medical collection over $500 and includes no medical
collections under $500 on the consumer report when the inquiry is made. Panel B includes the full sample. “No.
medical collections” provides the number of unique medical collections in the sample for each consumer. Because
each observation in the analysis dataset corresponds to an inquiry, consumers may have additional medical
collections that are not represented in the sample if there were no inquiries made in the 180 days before or after
those medical collections were first reported. “Months between date of last med. coll. and date of first med. coll.”
provides the number of months between each consumer’s medical collections, for those medical collections that are
represented in the sample. The “No. inquiries” variables only include inquiries made in the 180 days before or after
a medical collection was first reported; consumers may have other inquiries that are not included in the data if they
did not fall within these 361-day windows. Variables “at first inquiry” are provided for each consumer’s earliest
inclusion in the sample, as they may change within consumers over time. There are fewer consumer observations
corresponding to average credit scores than for the other statistics in both panels because average credit score is only
calculated using data from consumers whose credit scores are non-missing. There are also some consumers with
missing birth year that are not included in the calculation of average age. State regional shares were calculated using
Census Regions; see U.S. Census Bureau, Geographic Levels, https://www.census.gov/programs-surveys/economiccensus/guidance-geographies/levels.html (last revised Oct. 8, 2021).
(1) Mean

(2) Median (3) Obs. (Unique
Consumers)

Panel A: Over $500 Sample
No. medical collections
2.24
1.00
266147
Months between date of last med. coll. and
20.47
0.00
266147
date of first med. coll.
No. credit card inquiries
1.42
1.00
266147
No. mortgage inquiries
0.21
0.00
266147
No. other inquiries
1.11
1.00
266147
Credit score at first inquiry
594.52 588.00
214485
Missing credit score at first inquiry
0.19
0.00
266147
Consumer age at first inquiry
40.29
38.00
261488
Northeastern share at first inquiry
0.08
0.00
266147
Midwestern share at first inquiry
0.15
0.00
266147
Southern share at first inquiry
0.61
1.00
266147
Western share at first inquiry
0.14
0.00
266147
Panel B: Full sample
No. medical collections
4.08
2.00
688682
Months between date of last med. coll. and
35.77
10.92
688682
date of first med. coll. =
No. credit card inquiries
1.89
1.00
688682
No. mortgage inquiries
0.31
0.00
688682
No. other inquiries
1.52
1.00
688682
Credit score at first inquiry
596.10 590.00
558362
Missing credit score at first inquiry
0.19
0.00
688682
Consumer age at first inquiry
41.89
40.00
676075
Northeastern share at first inquiry
0.10
0.00
688682
Midwestern share at first inquiry
0.19
0.00
688682
Southern share at first inquiry
0.54
1.00
688682
Western share at first inquiry
0.16
0.00
688682
Table 6 provides summary statistics at the consumer level, using the first observation for
each consumer observed in the inquiry dataset. On average, a consumer in the over-$500 sample
experiences 2.24 medical collections that appear within 180 days of an inquiry. These medical
collections are, on average, approximately 20 months apart from the earliest to the latest
reported. Nineteen percent of the consumers in the sample do not have a credit score in the
month before their first inclusion in the sample; for consumers who do have a credit score, it is
most often subprime.288 More than 60 percent of consumers in the sample are located in Southern

Consumer Fin. Prot. Bureau, Borrower risk profiles, https://www.consumerfinance.gov/data-research/consumercredit-trends/student-loans/borrower-risk-profiles/ (last visited May 9, 2024).
States, reflecting the disproportionate share of consumers with medical debt in the South
documented in prior research.289 These summary statistics support the generalizability of the
results, as the sample of consumers is generally similar to the overall population of consumers
with medical collections during this time period.290 Furthermore, the summary statistics for
consumers in the full sample are similar to those for the over-$500 sample, but consumers in the
over-$500 have nearly two fewer medical collections reported within 180 days of an inquiry in
the sample. Though this at first may seem counterintuitive, this is because consumers with
several medical collections often have at least one medical collection valued under $500 which
removes them from the over-$500 subsample.
6. Empirical Strategy
The CFPB used a regression discontinuity in time (RDiT) design to estimate the effect of
reported medical collections on consumers’ access to credit and the performance of credit
account tradelines resulting from creditors’ inquiries. Regression discontinuity is a quasiexperimental design that, under certain assumptions, allows estimation of the causal effect of a
treatment or intervention where a treatment is assigned by a threshold value of that variable.291 In
the present context, inquiries are “treated” when a medical collection tradeline is added to the
NCRA’s database. The date that a medical collection is added to a consumer report is the
“threshold” that potentially creates a discontinuous effect on the studied dependent variables:
inquiry success and two-year serious delinquency. Before this date, creditors cannot observe the
medical collection on the consumer report at the time an inquiry is made, but the CFPB can
observe using the CCIP that the consumer did have a medical debt in collections that would

U.S. Census Bureau, 19% of U.S. Households Could Not Afford to Pay for Medical Care Right Away (Apr. 7, 2021),
https://www.census.gov/library/stories/2021/04/who-had-medical-debt-in-united-states.html.
Consumer Fin. Prot. Bureau, Paid and Low-Balance Medical Collections on Consumer Credit Reports (July 27,
2022), https://www.consumerfinance.gov/data-research/research-reports/paid-and-low-balance-medical-collectionson-consumer-credit-reports/.
Guido W. Imbens & Thomas Lemieux, Regression discontinuity designs: A guide to practice, 142(2)
J. Econometrics, at 615-35 (Feb. 2008), https://www.sciencedirect.com/science/article/abs/pii/S0304407607001091.
eventually be reported. The proximity of each inquiry to the threshold, referred to as the
“running variable” in regression discontinuity terminology, is equal to the number of days
between the date that the collection was first included on the consumer report and the date that
the inquiry was made. When the inquiry date occurred after the medical collection reported date
(or in other words, the medical collection was included on the consumer report before the inquiry
was made), this running variable is greater than or equal to the “threshold” zero; for values less
than or equal to zero, the medical collection was not included on the consumer report when the
inquiry was made. The key assumption of a regression discontinuity analysis is that nothing is
changing discontinuously across the threshold besides the treatment.
To analyze inquiry success, the CFPB estimated Equation 1 using the inquiry dataset:
Yijk = α + γDijk + βZijk + δDijk × Zijk + ϵijk (1)
Where i is a consumer, j is an inquiry, and k is the medical collection associated with the
inquiry. Yijk is a binary variable equal to one if the inquiry is successful, i.e., if a tradeline is
originated within 14 days for a credit card or auto loan, 120 days for a mortgage, or 30 days for
other loans. Dijk is the running variable, i.e., the number of days after medical collection k was
added to the consumer report that inquiry j was made. Dijk is negative if the inquiry was made
before the medical collection was added, and positive if the inquiry was made after. Zijk is a
binary variable equal to one if the inquiry j was made after the date when collection k was
reported. The coefficient of interest, β, represents the difference in the likelihood that an inquiry
is successful for inquiries made after a medical collection is added, relative to inquiries made
before. The intercept α allows estimation of a more flexible linear form.
The CFPB also estimated Equation 1 for the performance dataset, using the two-year
performance of tradelines that can be traced to an inquiry included in the inquiry dataset as the
dependent variable. The estimating equation is largely unchanged, though j is interpreted as a
tradeline associated with an inquiry in the inquiry dataset (rather than the inquiry itself), and Yijk
is a binary variable equal to one if the account is at least 90 days delinquent on the tradeline at

any point within the first two years after the tradeline is originated (rather than if the inquiry
is associated with a tradeline origination, as in the inquiry dataset regression).
In the results described below, the CFPB estimated six specifications to estimate impacts
on inquiry success and account performance. The first specification is limited to the over-$500
sample, as defined above. The second and third specifications separate the over-$500 sample into
two groups: inquiries that were made when the consumer had no nonmedical collections on their
consumer report, and inquiries made when consumers had nonmedical collections on their
consumer report. These specifications test whether reported medical collections affect inquiry
success and better predict account performance for consumers with fewer signals of negative
information. The hypothesis is that the effects of a reported medical collection should be larger
for inquiries made without nonmedical collections on the consumer report. If a consumer already
has nonmedical collections, the appearance of a medical collection likely implies a lower
marginal change in expected delinquency risk. Finally, the CFPB then estimated each of these
three specifications for all inquiries in the sample.
The CFPB only reports its estimates of the parameter β, which provides the effect of
medical collection furnishing on inquiry success and account performance. Combined across the
main results and balance tests described later, the CFPB estimated a total of 192 β coefficients,
so the reported standard errors were adjusted using the Benjamini-Hochberg procedure, a method
for accounting for multiple comparisons (under which it is more likely to find a statistically
significant result by chance than in a one-off analysis).292
To justify the robustness of the main specification, the CFPB considers the potential
threats to identification that can arise from RDiT specifications. RDiT varies from a standard
regression discontinuity design because the running variable is not generally continuous. As

See Yoav Benjamini & Yosef Hochberg, Controlling the False Discovery Rate: A Practical and Powerful
Approach to Multiple Testing, 57(1) J. of the Royal Stat. Soc’y Series B (Methodological), at 289-300 (1995),
http://www.jstor.org/stable/2346101.
summarized by an academic paper, RDiT designs can be biased if observations far from the
threshold time period are used for identification, as there may be autoregressive properties or
unobservable confounders.293 This is often required in RDiT designs that have little crosssectional variation, as the sample size can only grow by adding observations further from the
threshold, rather than by adding additional cross-sectional units. However, the data underlying
the analysis discussed in this document contains ample cross-sectional variation, with 663,678
unique inquiries in the inquiry dataset and 401,027 unique tradelines in the performance dataset
for the over-$500 sample. Furthermore, the analysis considers observations that are no more than
180 days from the threshold, minimizing the extent of possible autoregression. In addition to
these features of the datasets that limit the potential for bias arising from the RDiT design, the
CFPB estimates the regressions using econometric best practices as implemented by a
practitioner software package.294 Standard errors are clustered by consumer to account for
correlation within consumer observations over time. Additionally, the CFPB conducted several
robustness checks to support the validity of the main design, described in detail after the
discussion of the main results.
7. Results on Inquiry Success
The CFPB first uses the inquiry dataset to consider how medical collection reporting
affects inquiry success. Importantly, an unsuccessful inquiry does not necessarily imply that the
lender denied the credit application. Consumers may be approved for credit with worse terms
than they would have received absent medical collection reporting and decline the offer of credit
as a result, or consumers may choose not to take up approved credit for idiosyncratic reasons.

Catherine Hausman & David S. Rapson, Regression Discontinuity in Time: Considerations for Empirical
Applications, 10 Ann. Rev. of Res. Econ. (2018), https://www.annualreviews.org/content/journals/10.1146/annurevresource-121517-033306.
Specifically, the regressions are estimated using the Stata package rdrobust, implemented with a triangular
kernel, a common mean-square-error-optimal bandwidth selector, and adjustments for mass points. Sebastian
Calonico et al., rdrobust: Software for regression-discontinuity designs, 17:2 Stata J. (2017),
https://rdpackages.github.io/references/Calonico-Cattaneo-Farrell-Titiunik_2017_Stata.pdf.
However, this is less likely to be an issue with credit cards because the CFPB understands that
credit card accounts are generally issued automatically if the creditor approves an application,
with little opportunity for a consumer to decline. The CFPB assumes that consumers’ underlying
demand for credit is unaffected by medical collection reporting, so changes in inquiry success
across the reporting threshold can be attributed to creditors’ denial of credit account applications
or provision of worse terms, rather than changes in who applies. The CFPB justifies this
assumption below.
Table 7: The Effect of Medical Collection Reporting on Inquiry Success295
(1) Over
$500

(2) Over
(3) Over
$500, no
$500,
NMC
NMC

Panel A:
Credit cards
RD Estimate -0.047∗∗∗
-0.072∗∗∗
(0.006)
(0.009)
[-0.059,-0.036] [-0.090,-0.055]
Avg. success 0.294
0.381
Observations 601230
267276
Panel B:
Mortgages
RD Estimate -0.026∗
-0.040∗
(0.012)
(0.018)
[-0.049,-0.004][-0.074,-0.006]
Avg. success 0.186
0.248
Observations 79372
46003
Panel C:
Other credit
accounts
RD Estimate -0.014∗
-0.020∗

(4) All

(5) No
NMC

(6) NMC

-0.029∗∗∗
-0.033∗∗∗ -0.049∗∗∗
-0.022∗∗∗
(0.006)
(0.003)
(0.005)
(0.003)
[-0.041,-0.018] [-0.038,-0.027][-0.059,-0.040] [-0.028,-0.017]
0.222
0.275
0.364
0.214
333954
3026355
1233571
1792784
-0.003
-0.014
-0.013
-0.005
(0.012)
(0.009)
(0.015)
(0.006)
[-0.027,0.022] [-0.031,0.004][-0.043,0.017] [-0.016,0.006]
0.098
0.167
0.235
0.089
33369
439685
237413
-0.010

-0.015∗∗∗

-0.024∗∗∗

-0.010∗∗

The table provides the regression discontinuity estimates for the inquiry dataset, separately by credit account
type. Each coefficient (RD Estimate) estimates a percentage point effect of having an additional medical collection
reported on inquiry success. These effects can be represented as percent changes by comparing to the baseline “Avg.
success”, which is calculated as the success rate of all inquiries made to the left of the regression discontinuity
threshold (or without medical collection reporting). Column 1 limits the sample to inquiries associated with medical
collections over $500 made when the consumer had no medical collections under $500 on their consumer report,
which is then subset into Columns 2 and 3. Column 2 limits the sample to inquiries made when the consumer did not
have a nonmedical collection (NMC) on their consumer report; Column 3, when consumers did have a nonmedical
collection on their consumer report. Column 4 includes the full sample. Columns 5 and 6 are defined equivalently to
Columns 2 and 3 for the full sample. Standard errors are clustered by consumer and adjusted using the BenjaminiHochberg procedure.
(0.006)
(0.009)
[-0.026,-0.003] [-0.038,-0.002]
Avg. success 0.242
0.307
Observations 469290
(0.007)
[-0.024,0.004]
0.197
(0.003)
(0.005)
(0.004)
[-0.021,-0.009][-0.033,-0.015] [-0.017,-0.003]
0.246
0.316
0.205
2484030
908849
Standard errors in parentheses, 95 percent confidence intervals in brackets
∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.01

Table 7 provides the results of the main regression discontinuity analysis on inquiry
success. Each panel represents a different loan type, as products generally have different
underwriting procedures. At a high level, several summary observations can be made. First, just
over half of the inquiries in the full sample of the inquiry dataset are for credit cards. Only
7.4 percent of the inquiries in this sample are for mortgages, compared to almost 17 percent of
all inquiries in the CCIP. This likely reflects the fact that most consumers in the sample have thin
credit files296 and subprime credit scores, and therefore may be less likely to apply for mortgages
than for other types of credit, given the higher underwriting standards of mortgages.297 Inquiry
success rates are higher for all loan types when inquiries are made without nonmedical
collections on the consumer report than when nonmedical collections are present, with
differences as large as 15.9 percentage points. This is expected because consumers with less
negative information on their consumer reports are more likely to be approved for credit or
receive favorable terms. Perhaps less intuitively, average success rates for credit cards and
mortgages are also generally higher for the subsample of inquiries made by consumers who only
have medical collections valued over $500, if they have any. As discussed above, inquiries made
by consumers with many medical collections are often excluded from the over-$500 sample
because at least one of those medical collections is under $500. The average number of medical

A thin credit file is a consumer report that contains fewer than five credit accounts. Jennifer White, Experian,
What is a Thin Credit File? (May 25, 2022), https://www.experian.com/blogs/ask-experian/what-is-a-thin-creditfile-and-how-will-it-impact-your-life/.
Consumers with credit scores below 500 may not be approved for a mortgage but can usually access secured
credit cards. Louis DeNicola, Experian, How to Buy a House with Bad Credit (Oct. 7, 2023),
https://www.experian.com/blogs/ask-experian/how-to-get-a-home-loan-with-bad-credit/; Consumer Fin. Prot.
Bureau, How to rebuild your credit (July 2020), https://files.consumerfinance.gov/f/documents/cfpb_how-torebuild-your-credit.pdf.
collections on a consumer report when an inquiry is made in the full sample, in Column 4, across
all loan types, is 5.03. Conversely, the average number of medical collections on a consumer
report when an inquiry is made, for inquiries made with all medical collections greater than
$500, in Column 1 is 1.08. Thus, the over-$500 sample is positively selected, i.e., consumers in
this sample have less negative information than consumers in the full sample, at least as
measured by the number of medical collections present on their consumer reports. Despite the
positive selection into the over-$500 sample, the CFPB expects these results to most closely
represent the effects of removing all medical collections from consumer reports given the
parallel with the NCRAs’ current practice for under-$500 medical collections.
Turning to the regression estimates in Table 7, Column 1 of Panel A (credit cards) shows
that a medical collection being reported causes a 4.7 percentage point decline in the likelihood of
inquiry success for the over-$500 sample. This represents a 16.0 percent decline from relative to
the average success rate for inquiries to the left of the regression discontinuity threshold (i.e.,
inquiries made before the medical collection was reported). The effect is larger in absolute value
for inquiries made when the consumer had no nonmedical collections on their consumer report,
shown in Column 2, than when consumers had nonmedical collections on their consumer report,
shown in Column 3. This supports the hypothesis that medical collection reporting has a larger
effect on consumers without outstanding nonmedical collections. Columns 4 through 6 repeat the
groups from Columns 1 through 3 but include the full sample. The regression result shown in
Column 4 of Panel A describes a 3.3 percentage point, or 12.0 percent, decline in inquiry success
for inquiries made with these larger medical collections reported relative to inquiries made
without these medical collections reported. Again, effects are larger in absolute value for
inquiries made when consumers did not have nonmedical collections on their consumer report
than when nonmedical collections were present.
The first three Columns of Panel B (mortgages) find relatively small and no more than
marginally significant effects of medical collection reporting on mortgage inquiry success.

Medical collection reporting reduces mortgage inquiry success by 2.6 percentage points, or
14.0 percent of its baseline level. The effect appears to be driven by inquiries made when there
were no nonmedical collections on the consumer report, as the coefficient in Column 3 is
statistically insignificant and small. However, the estimates in Columns 1 and 2 are only
statistically significant at the 10 percent level.298 All estimates for the full sample in Columns 4
through 6 are statistically insignificant. Using the 95 percent confidence interval for the
coefficient in Column 4 of Panel B, it is possible to reject effects larger than a 3.1 percentage
point, or 18.6 percent, decline in inquiry success for the full sample.299
Panel C provides results for all other types of credit accounts. The estimated effects are
all smaller in magnitude than the results for credit cards and vary in statistical significance. The
coefficients imply that medical collection reporting causes a 1.4 percentage point decline in the
likelihood of inquiry success for non-mortgage and non-credit-card credit accounts for the over$500 sample, or a 5.8 percent decline from the baseline inquiry success rate. Estimated effects
are similar for the full sample. As with the effects on credit cards and mortgage inquiries, effects
for both samples are larger for consumers without nonmedical collections.
8. Results on account performance
The estimated effects on inquiry success show that the underwriting procedures for many
credit types penalize consumers for having medical collections on their consumer reports, with
generally larger effects for consumers with medical collections over $500. The CFPB next
considered whether this use of medical collections protects creditors from delinquency risk. If

That is, given the variability in the data, if medical collections had no effect on inquiry success, one would expect
an estimate as large as those show in Columns 1 and 2 less than 10 percent of the time, but more than 5 percent of
the time, through chance alone.
The confidence intervals provided in brackets in the tables contain the true value of the parameter being
estimated with 95 percent confidence, i.e., if the CFPB had sufficient data to run this regression with 100 different
samples, and estimated 100 different confidence intervals, one would expect 95 of these confidence intervals would
contain the true value of the parameter. Therefore, the CFPB can reject coefficients outside of the bounds of its
estimated confidence intervals as unlikely to be consistent with the true effect of medical collections reporting on
inquiry success with 95 percent confidence.
creditors use medical collection information to accurately predict whether consumers have high
delinquency risk and deny their applications, then originated accounts resulting from a successful
inquiry for a consumer with an unreported medical collection at the time of the inquiry would be
more likely to be seriously delinquent than those resulting from a successful inquiry for a
consumer with a reported medical collection. However, to the extent that creditors provide worse
credit terms to consumers with reported medical collections and such worse credit terms increase
the likelihood of serious delinquency, one might expect the opposite: Originated accounts
resulting from an inquiry for a consumer with an unreported medical collection could be less
likely to be seriously delinquent (because they received more affordable credit terms) than those
resulting from an inquiry for a consumer with a reported medical collection (because they
received worse credit terms). These opposing effects make it impossible to determine how the
underlying delinquency risk of consumers with and without unreported medical collections
varies. However, the results of this analysis are still informative as to how two-year delinquency
rates are affected by medical collection reporting, net of the effects of application denials and the
provision of worse terms.

Table 8: The Effect of Medical Collection Reporting on Two-Year Credit Account
Performance300
(1) Over
$500

(2) Over
(3) Over
$500, no $500, NMC
NMC

(4) All

(5) No (6) NMC
NMC

Panel A:
Credit cards
RD Estimate

-0.000
0.002
-0.003
0.002
0.004
-0.005
(0.012)
(0.014)
(0.021)
(0.006)
(0.007)
(0.008)
[-0.023,0.023] [-0.026,0.031] [-0.045,0.038][-0.009,0.013] [-0.010,0.018] [-0.021,0.011]
Avg. D 90+
0.231
0.190
0.293
0.223
0.171
0.284
Observations
96297
56423
39874
565680
305980
259700
Panel B:
Mortgages
RD Estimate
-0.011
-0.021
0.033
0.004
-0.006
0.034
(0.014)
(0.014)
(0.034)
(0.007)
(0.006)
(0.019)
[-0.039,0.017] [-0.049,0.007] [-0.033,0.100] [-0.009,0.017] [-0.018,0.007] [-0.003,0.071]
Avg. D 90+
0.035
0.025
0.069
0.038
0.029
0.065
Observations
10177
7944
2233
56976
43106
13870
Panel C:
Other credit
accounts
RD Estimate
-0.012
-0.011
-0.009
-0.001
-0.002
-0.002
(0.014)
(0.015)
(0.021)
(0.006)
(0.006)
(0.009)
[-0.040,0.015] [-0.041,0.019] [-0.050,0.033] [-0.012,0.011] [-0.014,0.011] [-0.019,0.016]
Avg. D 90+
0.182
0.135
0.235
0.171
0.120
0.216
Observations
71760
36951
34809
459094
213481
245613
Standard errors in parentheses, 95 percent confidence intervals in brackets
∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.01

Table 8 shows the results of the main regression discontinuity analysis in the
performance dataset. Across all loan types and subsamples, the estimated effects of medical
collection reporting on serious delinquency are small and statistically insignificant. Column 1 of
Panel A shows that, in the over-$500 sample, the CFPB can reject effects larger in absolute value

The table provides the regression discontinuity estimates for the performance dataset, separately by credit
account type. The results estimate effects on two-year 90-day delinquency rate for all accounts originated from a
successful inquiry in the inquiry dataset. Each coefficient (RD Estimate) estimates a percentage point effect of
having an additional medical collection reported on inquiry success. These effects can be represented as percent
changes using the baseline “Avg. D90+”, which is calculated as the 90-day delinquency rate of all inquiries made to
the left of the regression discontinuity threshold (or without medical collection reporting). Column 1 limits the
sample to inquiries associated with medical collections over $500 made when the consumer had no medical
collections under $500 on their consumer report, which is then subset into Columns 2 and 3. Column 2 limits the
sample to inquiries made when the consumer did not have a nonmedical collection (NMC) on their consumer report;
Column 3, when consumers did have a nonmedical collection on their consumer report. Column 4 includes the full
sample. Columns 5 and 6 are defined equivalently to Columns 2 and 3 for the full sample.
than 2.3 percentage points, or 10.0 percent of the baseline delinquency rate, with 95 percent
confidence. That is, it would be highly unlikely to find an estimate as small as what is reported in
Table 8 through chance alone if having an unreported medical collection was associated with an
increase in the rate of serious delinquency by 10 percent or more. The confidence interval is
tighter and the central estimate more positive (i.e., unreported medical collections associated
with less delinquency) for inquiries made when consumers did not have nonmedical collections
on their consumer report than when these collections were present. This means that the true
effects for inquiries made without nonmedical collections are more likely to be positive. Further,
if there is a difference in delinquency rate for consumers with unreported medical collections,
these consumers are less likely to be delinquent than consumers with reported medical
collections. This also holds for the full subsample in Columns 4 through 6.
These results broadly find that credit card lenders use medical collection information in
underwriting, but do not reduce their two-year serious delinquency risk for originated credit
account tradelines by doing so. Fewer accounts are originated to consumers with reported
medical collections, but those that are originated are no less likely to be delinquent than accounts
originated to consumers with unreported medical collections. This suggests that removing
medical collections information from credit card underwriting would increase access to credit
without negatively impacting the likelihood of serious delinquency for consumers with medical
collections, all else equal.
The results in Panel B show qualitatively similar estimates for mortgages, but with less
precisely estimated effects. The effects are less precise because the average serious delinquency
rate is much lower for mortgages than for credit cards: only 3.5 percent of mortgages in the over$500 sample are seriously delinquent within two years, compared to 23.1 percent of credit cards.
The lower frequency in the dependent variable as well as the smaller sample size will naturally
lead to wider confidence intervals. Column 1 shows that the CFPB can only reject marginal
reductions in mortgage delinquency rates with reported medical collections that are larger in

absolute value than 3.9 percentage points, or 111.4 percent of the baseline delinquency rate, with
95 percent confidence. For the full sample, the CFPB can reject marginal reductions larger in
absolute value than 0.9 percentage points, or 23.7 percent of baseline delinquency rate. Though
these results are too imprecise to allow the rejection of large effects, their statistical
insignificance can be interpreted as suggestive that removing larger medical collections from
mortgage underwriting would not cause increases in serious delinquency risk.
As for credit cards, the results for non-mortgage and non-credit-card accounts, shown in
Table 8, are mostly statistically insignificant and small in magnitude. Again, the CFPB concludes
that the use of medical collections information in underwriting does not reduce the delinquency
risk of accounts originated to people with reported medical collections.
9. Results Related to Credit Demand and Selection
The results described in the previous two subsections confirm suggest that creditors use
medical collections information in their underwriting procedures, but this information does not
enable them to originate accounts that are less likely to become seriously delinquent. This
interpretation of the regression discontinuity results relies on the identifying assumption
discussed above: the only difference between the inquiries made before and after a medical
collection is added to a consumer report is the medical collection reporting itself, rather than that
the application delinquency risk (quality) is lower for consumers with reported medical
collections. This section discusses evidence supporting this identifying assumption.
Though the analysis benefits from ample observations near the threshold, as discussed
above, RDiT specifications may still be affected by anticipation or selection effects if crosssectional observations can sort themselves on either side of the threshold. In this setting,
consumers may be less likely to apply for credit after a medical collection is added to their
consumer report. If consumers with lower delinquency risk have more knowledge about when a
medical collection will be added to their consumer report, they may be more likely to apply for
credit immediately to the left of the threshold (i.e., just before the medical collection is added to

the consumer report). The CFPB first considered how the magnitude of credit demand changes
across the reporting threshold by plotting the number of inquiries made in each week relative to
the week of the medical collection’s addition to the consumer report.
Figure 1: Inquiry Distribution Across Weeks301

Figure 1 plots the number of inquiries made in each week relative to the week before the
date a medical collection was added to a consumer report, represented as week zero. For all
credit account products, credit demand is largely stable through the 25 weeks before the medical
collection is reported, but there is an immediate reduction in the week that the medical collection
is reported. Credit demand rebounds quickly from this initial drop but remains persistently lower
for the 25 weeks after the medical collection is reported, only approaching its pre-report level by
the final considered week for credit cards and mortgages. Though the reduction in credit demand
is sharp around the week of the medical collection’s first report, it is not large; at most, credit
demand falls by eight percent of the baseline (for mortgages).
Any reduction in credit demand corresponding to medical collection reporting may
appear to threaten the identifying assumption, which requires that applications for credit made by
consumers with reported medical collections only differ from those made by consumers whose
medical collections were not yet reported because of the medical collection reporting itself, and

This figure plots the number of inquiries made in each week within 180 days of the medical collection’s first reported
date. The number of inquiries is provided as a ratio, relative to the number of inquiries made in the week before the
associated medical collection’s first reported date. The first and last week of the 180-day window include only six
days and are not plotted.
not because application quality differs. However, credit demand may fall for reasons that do not
simultaneously affect credit application quality. For example, many NCRAs provide credit
monitoring services that alert a consumer when a collection is added to their consumer report.302
A consumer who planned to apply for credit may no longer do so if they are aware of a medical
collection’s negative effect on their credit score, which would affect their access to credit. The
causality may also flow in the other direction if debt collectors track consumer reports and use
“collection triggers” to focus their medical collection reporting after consumers apply for or open
new credit accounts.303 These mechanisms cannot be observed in the data but could explain the
observed discontinuous decline in credit demand around medical collection reporting.
To estimate if credit application quality changes across the threshold, the CFPB estimated
balance tests using Equation 1, where Yijk is equal to one of several variables that describe the
consumer report at the time of the inquiry j. This estimates how inquiries made with reported
medical collections differ from inquiries made with unreported medical collections. If such
differences are large in absolute value and statistically significant, one might be concerned that
there are underlying differences in the types of credit applications made when medical
collections are reported that could be driving the regression discontinuity results, instead of
the medical collection reporting itself. Finding small or imprecise coefficients would support the
identifying assumption that the only difference in inquiries across the regression discontinuity
threshold is the addition of a medical collection to the consumer report.
Table 9: Inquiry Balance Tests304
(1) Credit
card

(2) Mortgage

(3) Other credit
accounts

See, e.g., Equifax, Equifax CompleteTM, https://www.equifax.com/personal/products/credit/monitoring-and-reports/
(last visited May 15, 2024).
See, e.g., Experian, Collection TriggersSM: Monitoring your collections accounts,
https://www.experian.com/business/products/collection-triggers (last visited May 15, 2024).
The table includes balance tests for the inquiry sample. Panel A limits the sample to inquiries associated with a
medical collection over $500 and no medical collections under $500 on the consumer report when the inquiry is
Panel A: Over $500 sample
RD Estimate
Avg. consumer age
RD Estimate
Avg. credit score
RD Estimate
Avg. missing credit score
RD Estimate
Avg. num. open loans
RD Estimate
Avg. any D90+
RD Estimate
Avg. tot. past due am.
Panel B: Full sample
RD Estimate
Avg. age
RD Estimate
Avg. credit score
RD Estimate
Avg. missing credit score
RD Estimate
Avg. num. open loans
RD Estimate
Avg. any D90+
RD Estimate
Avg. tot. past due am.

(1) Credit
card

(2) Mortgage

(3) Other credit
accounts

0.117
(0.172)
39.295
-3.208∗∗
(1.192)
576.254
0.012∗∗
(0.005)
0.197
0.032
(0.035)
1.328
-0.001
(0.005)
0.265
49.549
(63.234)
1131.626

0.257
(0.464)
41.430
4.034
(3.572)
617.565
-0.001
(0.009)
0.074
0.050
(0.115)
1.997
-0.010
(0.012)
0.256
-259.894∗
(149.575)
1155.664

0.118
(0.172)
38.637
-0.540
(1.255)
569.366
0.008
(0.005)
0.151
0.026
(0.039)
1.275
-0.008
(0.006)
0.268
29.122
(72.823)
1276.969

0.072
(0.077)
41.092
-1.472∗
(0.590)
569.811
0.007∗∗
(0.003)
0.171
-0.010
(0.020)
1.122
0.001
(0.003)
0.262
-33.152
(42.478)
1073.628

-0.111
(0.235)
43.078
1.868
(1.990)
606.276
0.002
(0.004)
0.073
-0.092
(0.047)
1.749
-0.000
(0.006)
0.260
-72.382
(76.899)
1135.919

-0.077
(0.087)
40.784
-0.817
(0.642)
561.472
0.005∗
(0.003)
0.134
-0.010
(0.018)
1.065
0.000
(0.004)
0.267
70.836
(40.274)
1190.611

Standard errors in parentheses
∗

p < 0.1,

∗∗

p < 0.05,

∗∗∗

p < 0.01

made. Panel B includes the full sample. These balance tests estimate Equation 1 using characteristics from the
consumer’s consumer report in the month before the creditor makes an inquiry. “RD Estimate” provides the estimate
for β when the dependent variable is the variable whose average is provided. Each column limits the sample by
inquiry type. “Any D90+” describes whether any open or closed account on the consumer report is at least 90 days
delinquent, and “tot. past due am.” describes the total amount past due or charged off across all accounts. Standard
errors are clustered by consumer and adjusted using the Benjamini-Hochberg procedure.

Table 10: Performance Balance Tests305

Panel A: Over $500 sample
RD Estimate
Avg. consumer age
RD Estimate
Avg. credit score
RD Estimate
Avg. missing credit score
RD Estimate
Avg. num. open loans
RD Estimate
Avg. any D90+
RD Estimate
Avg. tot. past due am.
Panel B: Full sample
RD Estimate
Avg. consumer age
RD Estimate
Avg. credit score
RD Estimate
Avg. missing credit score
RD Estimate
Avg. num. open loans
RD Estimate
Avg. any D90+
RD Estimate

(1) Credit
card

(2) Mortgage

(3) Other
credit
accounts

0.261
(0.296)
41.404
-3.694
(2.012)
618.329
-0.005
(0.006)
0.078
0.286∗∗∗
(0.092)
1.884
0.017
(0.009)
0.248
175.228
(112.690)
1034.492

0.294
(0.894)
42.692
7.807
(7.099)
668.427
0.005
(0.010)
0.014
0.564∗
(0.340)
2.834
-0.019
(0.027)
0.191
-332.580
(302.978)
673.171

0.200
(0.366)
40.184
0.502
(2.608)
601.025
0.002
(0.007)
0.099
0.089
(0.092)
1.804
-0.002
(0.013)
0.268
16.765
(180.777)
1220.532

0.411∗∗
(0.154)
43.264
-1.670
(0.921)
611.625
-0.001
(0.003)
0.057
-0.027
(0.042)
1.671
0.003
(0.005)
0.256
82.685

0.871
(0.630)
44.083
-0.602
(3.340)
660.599
0.002
(0.005)
0.016
-0.162
(0.157)
2.588
-0.028
(0.016)
0.189
-135.890

0.068
(0.200)
42.246
-1.194
(1.197)
590.484
-0.000
(0.004)
0.087
0.029
(0.045)
1.530
0.007
(0.007)
0.274
35.141

The table includes balance tests for the performance sample. Panel A limits the sample to inquiries associated
with a medical collection over $500 and no medical collections under $500 on the consumer report when the inquiry
is made. Panel B includes the full sample. These balance tests estimate Equation 1 using characteristics from the
consumer’s consumer report in the month before the creditor makes an inquiry. “RD Estimate” provides the estimate
for β when the dependent variable is the variable whose average is provided. Each column limits the sample by
inquiry type. “Any D90+” describes whether any open or closed account on the consumer report is at least 90 days
delinquent, and “tot. past due am.” describes the total amount past due or charged off across all accounts. Standard
errors are clustered by consumer and adjusted using the Benjamini-Hochberg procedure.
(88.985)
1005.487

Avg. tot. past due am.

(138.828)
609.676

(76.515)
1191.860

Standard errors in parentheses
∗ p < 0.1,

∗∗

p < 0.05,

∗∗∗

p < 0.01

Table 9 provides results for the inquiry dataset and Table 10 provides results for the
performance dataset. Nearly all coefficients are not statistically significant, and where there is
statistical significance, the magnitude of the coefficient is never larger than 20 percent of the
mean value. This implies that credit applications submitted by consumers with reported medical
collections are similar to those submitted by consumers whose medical collections are not yet on
their consumer reports at the time of application, and differences in inquiry success and account
performance can be attributed to the medical collection reporting itself.
To further test for the presence of anticipation or selection effects, the CFPB estimated a
“donut” regression that removes from the sample all inquiries made within seven days of their
associated medical collection’s addition to the consumer report. If the regression estimates are
driven by anticipation or selection, the effects would be much smaller when estimated without
observations near the reporting threshold, as application quality would be less selected from the
threshold. In addition, medical collections may not be reported to all three NCRA on precisely
the same date. The creditors that make inquiries to the NCRA that provides the CFPB’s CCIP
may observe a medical collection on an inquiry they make to a different NCRA and use this
information, even though it appears in the CCIP that the medical collection was not reported.
Additionally, the construction of inquiry shopping windows and inherent imprecision in
connecting inquiries to opened tradelines may further limit the accuracy of calculating the
running variable. This is especially important near the reporting threshold because a one-day
error in assigning the date a medical collection was reported or an inquiry was made could be
sufficient to erroneously categorize the medical collection reporting status of an inquiry. The
CFPB further considered variation in dates within inquiry shopping windows below.

Table 11: The Effect of Medical Collection Reporting on Inquiry Success and Credit
Account Performance, Using a 14-Day Donut306

Panel A: Credit cards
RD Estimate
Avg. dep. var.
Observations
Panel B: Mortgages
RD Estimate
Avg. dep. var.
Observations
Panel C: Other Credit
Accounts
RD Estimate
Avg. dep. var.
Observations

(1) Over $500,
Success

(2) Over $500, (3) All, Success (4) All, D90+
D90+

-0.060∗∗∗
(0.0080
[-0.075,-0.045]
0.294
-0.006
(0.015)
[-0.036,0.024]
0.232
-0.041∗∗∗
(0.005)
[-0.050,-0.032]
0.275
0.008
(0.008)
[-0.009,0.024]
0.223
-0.037∗∗
(0.017)
[-0.071,-0.004]
0.186
-0.022
(0.025)
[-0.071]
0.035
-0.043∗∗∗
(0.008)
[-0.060,-0.027]
0.167
-0.003
(0.011)
[-0.026,0.019]
0.038
-0.009
(0.009)
[-0.027,0.009]
0.242
-0.038
(0.025)
[-0.087,0.012]
0.182
-0.010*
(0.004)
[-0.018,-0.002]
0.245
0.008
(0.010)
[-0.012,0.027]
0.171
Standard errors in parentheses, 95 percent confidence intervals in brackets
∗

p < 0.1,

∗∗

p < 0.05,

∗∗∗

p < 0.01

Table 11 provides the “donut” specification regression results. By comparing Column 1
of Table 7 to Column 1 of Table 11 and comparing Column 4 of Table 7 to Column 3 of
Table 11, one can observe that effects on inquiry success are larger in absolute magnitude and
more statistically significant for credit cards and mortgages in the donut specification than in the
main specification. This shows that the main results using the inquiry data are not driven by
selection or anticipation effects. Instead, the results in the main specification may be attenuated

The table provides regression discontinuity estimates for the inquiry and performance datasets, separately by
credit account type, and omitting all inquiries made within seven days of the associated medical collection’s
reporting date, making a 14-day “donut hole” of omitted inquiries. Each coefficient (RD Estimate) estimates a
percentage point effect of having an additional medical collection reported on inquiry success (in Columns 1 and 3)
using the inquiry dataset or 90-day delinquency (in Columns 2 and 4) using the performance dataset. These effects
can be represented as percent changes by comparing to a baseline “Avg. dep. var.”, which is calculated as the
success rate or 90-day delinquency rate of all inquiries made to the left of the regression discontinuity threshold (or
without medical collection reporting). Columns 1 and 2 limit the sample to inquiries associated with medical
collections over $500 made when the consumer had no medical collections under $500 on their consumer report.
Columns 3 and 4 include the full sample. Standard errors are clustered by consumer and adjusted using the
Benjamini-Hochberg procedure.
by fuzziness in the date that the medical collection was reported or that the inquiry was made, as
discussed above.
Despite the modest differences between Table 11 and Table 7 for the inquiry dataset,
there are no meaningful differences in the magnitude or statistical significance of effects for the
performance datasets, as shown by comparing Column 1 of Table 8 to Column 2 of Table 11 and
comparing Column 4 of Table 8 to Column 4 of Table 11. This provides further evidence that the
use of medical collection reporting in underwriting does not improve account performance.
A final concern is that it could be problematic if there is a hidden effect to the number of
days between the first date a medical collection tradeline is reported and the date of an inquiry as
the running variable. The potential issue is that there may be bunching at certain values of the
running variable if the likelihood of a medical collection being reported, or an inquiry being
made, differs across days of the week. For example, fewer than four percent of the medical
collections associated with inquiries in the inquiry dataset were reported on a Sunday, compared
to nearly 28 percent reported on a Tuesday. The distribution of inquiries in the inquiry dataset
(across all inquiry product types) is more even, with a low of 8.5 percent on Sunday, just over
15 percent on Monday through Friday, and nearly 14 percent on Saturday. Combining these two
features, an inquiry made on a Monday is more likely to correspond to a medical collection on
the subsequent day than an inquiry made on a Saturday. If the types of inquiries made on
Mondays differ from those made on Saturdays, there may disproportionately more inquiries
made on Monday for the running variable value immediately before the threshold (equal to -1),
which could cause selection bias in the estimated effect. To test whether this selection biases the
regression results, the CFPB estimated an additional specification that adds binary indicator
variables to the main specification for the day of the week of each observation’s inquiry date and
date of the medical collection report.

Table 12: The Effect of Medical Collection Reporting on Inquiry Success and Credit
Account Performance, Controlling for Day-of-Week Effects307
(1) Over $500, (2) Over
Success
$500, D90+
Panel A:
Credit cards
RD Estimate

-0.048∗∗∗

Avg. dep. var.
Observations
Panel B:
Mortgages
RD Estimate

Avg. dep. var.
Observations
Panel C:
Other credit accounts
RD Estimate

Avg. dep. var.
Observations

-0.002

(3) All, Success (4) All, D90+

-0.034∗∗∗

0.001

(0.006)
(0.012)
[-0.059,-0.038] [-0.024,0.021]
0.294
0.231
601230
(0.003)
(0.006)
[-0.039,-0.028] [-0.010,0.012]
0.275
0.223
3026355
-0.017
-0.027∗
(0.011)
(0.015)
[-0.049,-0.004] [-0.045,0.012]
0.186
0.035
79372
-0.014
(0.009)
[-0.032,0.003]
0.167
0.005
(0.007)
[-0.008,0.018]
0.038
-0.015
-0.014∗
(0.006)
(0.014)
[-0.026,-0.003] [-0.042,0.013]
0.242
0.182
469290
-0.015∗∗∗
(0.003)
[-0.021,-0.010]
0.246
-0.002
(0.006)
[-0.013,0.010]
0.171
Standard errors in parentheses, 95 percent confidence intervals in brackets
∗

p < 0.1,

∗∗

p < 0.05,

∗∗∗

p < 0.01

Table 12 provides the regression results for a version of Equation 1 that includes day-ofthe-week controls. Results are very similar to the main specification, as can be seen by
comparing Column 1 of Table 7 to Column 1 of Table 12, Column 4 of Table 7 to Column 3 of
Table 12, Column 1 of Table 8 to Column 2 of Table 12 and comparing Column 4 of Table 8 to

The table provides regression discontinuity estimates for the inquiry and performance datasets, separately by
credit account type, and including binary control variables for the day of the week that the inquiry was made (or the
inquiry shopping window’s last date) and the day of the week of the associated medical collection’s addition to the
consumer report. Each coefficient (RD Estimate) estimates a percentage point effect of having an additional medical
collection reported on inquiry success (in Columns 1 and 3) in the inquiry dataset or 90-day delinquency (in
Columns 2 and 4) in the performance dataset. These effects can be represented as percent changes by comparing to a
baseline “Avg. dep. var.”, which is calculated as the success rate or 90-day delinquency rate of all inquiries made to
the left of the regression discontinuity threshold (or without medical collection reporting). Columns 1 and 2 limit the
sample to inquiries associated with medical collections over $500 made when the consumer had no medical
collections under $500 on their consumer report. Columns 3 and 4 include the full sample. Standard errors are
clustered by consumer and adjusted using the Benjamini-Hochberg procedure.
Column 4 of Table 12. The CFPB concluded that the main results are not caused by bias in the
distribution of inquiry or medical collection timing across days of the week.
10. Results Related to Credit Shopping
As described above, the main specification defines the running variable using the date of
the last inquiry observed within the inquiry shopping window. This creates imprecision in the
measurement of the inquiry date for inquiry observations that reflect shopping windows with
multiple inquiries if they were not made on the same date.308 Because this imprecision could
attenuate results, the CFPB estimated Equation 1 separately for inquiry observations that reflect
multi-inquiry-date shopping windows (Shopping) and for inquiry observations that reflect
shopping windows that only contain one inquiry date (No Shopping). The CFPB estimated this
robustness check for the inquiry dataset first, and then for the performance dataset.
Table 13: The Effect of Medical Collection Reporting on Inquiry Success, Separated
by Shopping Behavior309

Panel A: Credit cards
RD Estimate
Avg. success
Observations
Panel B: Mortgages
RD Estimate
Avg. success
Observations

(1) Over $500,
Shopping

(2) Over $500,
No shopping

(3) All, Shopping

(4) All, No
shopping

-0.043
(0.020)
[-0.082,-0.003]
0.445
-0.050∗∗∗
(0.005)
[-0.060,-0.039]
0.279
0.000
(0.013)
[-0.025,0.026]
0.422
-0.035∗∗∗
(0.003)
[-0.040,-0.030]
0.262
-0.019
(0.028)
[-0.074,0.037]
0.329
-0.022
(0.011)
[-0.043,-0.001]
0.123
-0.041∗∗∗
(0.014)
[-0.068,-0.014]
0.308
-0.002
(0.011)
[-0.024,0.020]
0.111
Note that there may be imprecision in assignment of inquiry date for all inquiries, even those associated with no
other inquiries within a shopping window, because the CFPB’s CCIP only contains inquiries made to one NCRA.
The table provides regression discontinuity estimates for the inquiry and performance datasets, separately by
credit account type, and separately by shopping behavior. Each coefficient (RD Estimate) estimates a percentage
point effect of having an additional medical collection reported on inquiry success (in Columns 1 and 3) in the
inquiry dataset or 90-day delinquency (in Columns 2 and 4) in the performance dataset. These effects can be
represented as percent changes by comparing to a baseline “Avg. dep. var.”, which is calculated as the success rate
or 90-day delinquency rate of all inquiries made to the left of the regression discontinuity threshold (or without
medical collection reporting). Columns 1 and 2 limit the sample to inquiries associated with medical collections over
$500 made when the consumer had no medical collections under $500 on their consumer report. Columns 3 and 4
include the full sample. Columns 1 and 3 include only inquiries with shopping windows that contained inquiries
made on different dates. Columns 2 and 4 include only inquiries with sole-inquiry shopping windows or inquiry
shopping windows where all inquiries were made on the same date. Standard errors are clustered by consumer and
adjusted using the Benjamini-Hochberg procedure.
(1) Over $500,
Shopping

(2) Over $500,
No shopping

(3) All, Shopping

Panel C: Other credit
accounts
RD Estimate

0.002
-0.015
-0.016∗
(0.015)
(0.007)
(0.006)
[-0.030,0.027]
[-0.029,-0.001]
[-0.029,-0.004]
Avg. success
0.391
0.213
0.394
Observations
77603
391687
400620
Standard errors in parentheses, 95 percent confidence intervals in brackets
∗

p < 0.1,

∗∗

p < 0.05,

∗∗∗

(4) All, No
shopping
-0.015∗∗∗
(0.003)
[-0.021,-0.008]
0.217
p < 0.01

Table 13 shows results for inquiry success for inquiries associated with multi-date versus
single-date shopping windows. For credit cards and other non-mortgage accounts, the results are
only statistically significant for single-date shopping windows and are also larger in absolute
magnitude. Fewer than 10 percent of credit card inquiries are associated with multi-date
shopping windows, which is expected given the small average shopping windows for credit cards
shown in Table 5. Alternatively, the only statistically significant result for mortgages appears for
inquiries associated with multi-date shopping windows in the full sample. This limited ability to
identify a precise effect is reflected in the main specification as well, as shown in Table 7. The
CFPB concluded that, for non-mortgage products, the inability to observe the exact date that an
inquiry was made may attenuate the results in the main specification, and the true effect of
having a medical collection reported may be a larger decrease in inquiry success than what is
reported in Table 7.
Table 14: The Effect of Medical Collection Reporting on Two-Year Credit Account
Performance, Separated by Shopping Behavior310
(1) Over $500, (2) Over $500,
Shopping
No shopping

(3) All,
Shopping

(4) All, No
shopping

The table provides regression discontinuity estimates for the performance dataset, separately by credit account
type, and separating the sample by shopping behavior. Each coefficient (RD Estimate) estimates a percentage point
effect of having an additional medical collection reported on inquiry success. These effects can be represented as
percent changes by comparing to a baseline “Avg. D90+”, which is calculated as the 90-day delinquency rate of all
inquiries made to the left of the regression discontinuity threshold (or without medical collection reporting).
Columns 1 and 2 limit the sample to inquiries associated with medical collections over $500 made when the
consumer had no medical collections under $500 on their consumer report. Columns 3 and 4 include the full sample.
Columns 1 and 3 include only inquiries with shopping windows that contained inquiries made on different dates.
Columns 2 and 4 include only inquiries with sole-inquiry shopping windows or inquiry shopping windows where all
inquiries were made on the same date. Standard errors are clustered by consumer and adjusted using the BenjaminiHochberg procedure.
(1) Over $500, (2) Over $500,
Shopping
No shopping
Panel A: Credit cards
RD Estimate
-0.010
(0.035)
[-0.079,0.059]
Avg. D 90+
0.320
Observations
12288
Panel B: Mortgages
RD Estimate
-0.005
(0.020)
[-0.045,0.036]
Avg. D 90+
0.041
Observations
5673
Panel C: Other credit
Accounts
RD Estimate
-0.013
(0.026)
[-0.065,0.039]
Avg. D 90+
0.216
Observations
(3) All,
Shopping

(4) All, No
shopping

-0.000
(0.013)
[-0.025,0.025]
0.218
0.023
(0.018)
[-0.013,0.059]
0.313
-0.001
(0.006)
[-0.013,0.011]
0.210
-0.025
(0.020)
[-0.063,0.014]
0.027
0.009
(0.011)
[-0.012,0.030]
0.046
0.001
(0.008)
[-0.015,0.018]
0.030
-0.003
(0.014)
[-0.030,0.025]
0.170
-0.000
(0.012)
[-0.023,0.023]
0.207
-0.001
(0.007)
[-0.014,0.012]
0.158
Standard errors in parentheses, 95 percent confidence intervals in brackets
∗

p < 0.1,

∗∗

p < 0.05,

∗∗∗

p < 0.01

Table 14 provides the same robustness check as Table 13 but estimates effects on serious
delinquency using the performance dataset. As in previous robustness checks, the estimated
results on account performance are all statistically insignificant, and nearly all are small in
comparison to the baseline average delinquency rate. The CFPB considers these results as
evidence that imprecision in assigning inquiry dates does not drive the lack of statistical
significance in the main specification.
Finally, the CFPB tested whether classifying the timing of an inquiry shopping window
using the last inquiry makes a difference to the results. Although it makes intuitive sense to focus
on the last inquiry—a consumer finishes shopping, then either gets a new account or does not,
this could impact whether a consumer is considered treated or not by having a medical collection
reported or not. For example, if a consumer applied for accounts that created inquiries on March
5 and March 17, had an account opened on March 19, and had a medical collections tradeline
reported on March 15, in the main specification described above, they would be considered to

have a medical collection at the time of the inquiry. This may be accurate, if the March 17
inquiry (or another inquiry after March 15 that was made with a difference NCRA) resulted in
the open account, but it also may be inaccurate, and influence the results reported above. To
further test how the definition of shopping windows may affect the main results, the CFPB
estimated a version of the analysis using the first date of the shopping window instead of its last
date to define the running variable.
Table 15: The Effect of Medical Collection Reporting on Inquiry Success and Credit
Account Performance, Classifying Shopping Windows by First Inquiry Date311
(1) Over $500,
Success

(2) Over $500, (3) All, Success
D90+

(4) All, D90+

-0.049∗∗∗

0.002

-0.035∗∗∗

0.004

(0.004)

(0.012)

(0.003)

(0.006)

[-0.058,-0.041]

[-0.021,0.025]

[-0.040,-0.030]

[-0.008,0.016]

Avg. dep. var.

0.294

0.231

0.275

0.222

Observations

95973

563942

Panel B: Mortgages
RD Estimate

-0.010

0.003

-0.010

0.003

(0.012)

(0.013)

(0.008)

(0.006)

[-0.033,0.014]

[-0.022,0.028]

[-0.026,0.006]

[-0.009,0.015]

Avg. dep. var.

0.182

0.033

0.163

0.035

Observations

8836

49986

Panel A: Credit cards
RD Estimate

The table provides regression discontinuity estimates for the inquiry and performance datasets, separately by
credit account type, and using the date of the first inquiry observed within an inquiry shopping window instead of
the date of the last inquiry observed, as in the primary specification. The sample is limited to inquiries whose first
date of the inquiry shopping window was within 180 days of the medical collection’s inclusion on the consumer
report. Each coefficient (RD Estimate) estimates a percentage point effect having an additional medical collection
reported on inquiry success (in Columns 1 and 3) in the inquiry dataset or 90-day delinquency (in Columns 2 and 4)
in the performance dataset. These effects can be represented as percent changes by comparing to a baseline “Avg.
dep. var.”, which is calculated as the success rate or 90-day delinquency rate of all inquiries made to the left of the
regression discontinuity threshold (or without medical collection reporting). Columns 1 and 2 limit the sample to
inquiries associated with medical collections over $500 made when the consumer had no medical collections under
$500 on their consumer report. Columns 3 and 4 include the full sample. Standard errors are clustered by consumer
and adjusted using the Benjamini-Hochberg procedure.
(1) Over $500,
Success

(2) Over $500, (3) All, Success
D90+

(4) All, D90+

-0.010

-0.020

-0.012∗∗∗

-0.003

(0.006)

(0.014)

(0.003)

(0.006)

[-0.021,0.002]

[-0.048,0.008]

[-0.018,-0.006]

[-0.015,0.008]

Avg. dep. var.

0.242

0.182

0.246

0.171

Observations

71401

456828

Panel C: Other credit
Accounts
RD Estimate

Standard errors in parentheses, 95 percent confidence intervals in brackets
∗

p < 0.1,

∗∗

p < 0.05,

∗∗∗

p < 0.01

The results in Table 15 are very similar in size to those in the main specification, as seen
by comparing Column 1 of Table 7 to Column 1 of Table 15, Column 4 of Table 7 to Column 3
of Table 15, Column 1 of Table 8 to Column 2 of Table 15 and comparing Column 4 of Table 8
to Column 4 of Table 15. The coefficients in Column 1 of Table 15, estimating the impact of
medical collection reporting on inquiry success, are no longer marginally significant for
mortgages and other credit accounts. This may be because the last inquiry observed within an
inquiry shopping window is a better proxy for the date that the creditor observed the consumer
report for these products, which is sensible if consumers continue to shop when they reject an
earlier credit offer, or their application is rejected. Earlier pulls of consumer reports, and the
information contained on them, do not have any bearing on inquiry success if those earlier
inquiries did not lead to originated account. The CFPB considers these results as evidence that,
given the inherent challenges in assigning inquiry dates, the method of using the last date that an
inquiry was observed within a shopping window is the best available classification.
11. Results Related to Alternative Measures of Account Performance and Inquiry
Success
Moving on from statistical and data construction considerations, the CFPB returns to the
applicability of the results to the considered equilibrium in which all medical collections are
removed from consumer reports. Creditors may respond to reported medical collections by

providing lower amounts of credit, especially for products whose applications do not typically
request a certain amount of credit, such as credit cards (and unlike mortgages). The CCIP does
not contain data on the dollar amount of credit that consumers were offered if consumers decided
not to open an account, but it can observe credit limits and loan principals for originated
accounts. The CFPB estimated Equation 1 using the account’s credit limit (for revolving
accounts) or loan principal (for installment accounts) as the dependent variable. This regression
can only be run for the performance dataset because credit limits and loan principals cannot be
observed for unsuccessful inquiries.
Table 16: The Effect of Medical Collection Reporting on Credit Account Limits and
Loan Principals312
Panel A: Credit cards
RD Estimate

Avg. credit am.
Observations
Panel B: Mortgages
RD Estimate

Avg. credit am.
Observations
Panel C: Other credit accounts
RD Estimate

Avg. credit am.
Observations

(1) Over 500

(2) All

-384.312∗∗∗
(80.367)
[-541.829,-226.795]
1481.169
-247.492∗∗∗
(33.855)
[-313.848,-181.137]
1312.252
-12746.532
(11952.690)
[-36173.374,10680.309]
232565.905
-15734.984

254.621
(398.877)
[-527.164,1036.407]
20994.097
-195.017
(220.971)
[-628.113,238.078]
20380.048
[-33208.174,1738.206]
225877.236
The table provides regression discontinuity estimates for the performance dataset, separately by credit account
type, and using the credit limit or loan principal at time of origination as the dependent variable. Each coefficient
(RD Estimate) estimates a percentage point effect of having an additional medical collection reported on the
account’s credit limit or loan principal. These effects can be represented as percent changes by comparing to a
baseline “Avg. credit am.”, which is calculated as the average of the credit limit or loan principal for all inquiries
made to the left of the regression discontinuity threshold (or without medical collection reporting). Column 1 limits
the sample to inquiries associated with medical collections over $500 made when the consumer had no medical
collections under $500 on their consumer report. Column 2 includes the full sample. The dependent variable is equal
to the credit limit at the time of account origination for credit cards and other revolving accounts. The dependent
variable is equal to the loan principal at the time of account origination for mortgages and other installment
products. Standard errors are clustered by consumer and adjusted using the Benjamini-Hochberg procedure.
Standard error in parentheses, 95 percent confidence intervals in brackets
∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.01

Table 16 provides estimates for the effect of medical collection reporting on credit limits
and loan principals. The results in Panel A show that medical collection reporting leads to lower
credit limits for originated credit cards, with an average reduction in provided credit limits of
$384 for the over-$500 sample and $247 for the full sample. This represents a meaningful
reduction in consumer access to credit, as baseline credit limits are lower than $1,500 for both
samples. As expected, the CFPB does not find statistically significant effects for mortgages or
other non-credit-card account types. Consumers generally apply for a specific dollar amount of
credit for installment products, and the dollar amount of credit provided is not a margin that
would generally be affected by medical collection reporting.
Furthermore, the CFPB understands that the classification of serious delinquency is not
the sole determinant of account performance. Three other measures of performance are
considered in this final set of regressions, estimated on the performance dataset: whether the
account is ever 30 days or more delinquent within two years of its origination, whether the
account is 90 days or more delinquent at the end of its first two years after origination (instead of
whether it was ever 90 days or more delinquent within that two-year period), and the dollar
amount past due or charged off for accounts with nonzero past due or charged off amounts at the
end of its first two years after origination. If the primary classification of serious delinquency is a
good proxy for account performance, then results for the first two alternative measures should be
similar to their counterparts in the main performance results in direction and statistical
significance. The results for past due amounts may be more nuanced, as Table 16 above shows
that medical collection reporting lowers the credit limits of credit cards. This may cause lower
past due amounts in response to medical collection reporting because consumers cannot borrow
as much as they can absent medical collection reporting.

Table 17: The Effect of Medical Collection Reporting on Two-Year Credit Account
Performance, Alternative Classifications313
(1) Over
$500, D30+

(2) Over $500, (3) Over $500, (4) All,
D90+ alt.
Past due am. D30+

(5) All,
D90+ alt.

(6) All, Past
due am.

0.008

-0.006

-215.199∗∗

0.002

-0.003

-62.830∗

(0.013)

(0.011)

(86.597)

(0.006)

(0.005)

(29.197)

[-0.017, 0.032]

[-0.027, 0.015]

[-384.926, -45.472] [-0.010, 0.015] [-0.013, 0.008] [-120.055, -5.604]

Avg. dep. var.

0.321

0.164

713.724

0.316

0.153

643.677

Observations

96297

565680

111342

-0.034

0.002

4477.430

0.012

0.001

261.686

(0.027)

(0.010)

(2894.862)

(0.012)

(0.005)

(1682.921)

[-0.087, 0.018]

[-0.018, 0.022]

[-1196.394,
10151.255]

[-0.012, 0.036] [-0.009, 0012]

[-3036.779,
3560.152]

Avg. dep. var.

0.125

0.021

7511.005

0.118

0.019

6018.840

Observations

10177

56976

1954

Panel A: Credit
cards
RD Estimate

Panel B:
Mortgages
RD Estimate

The table provides regression discontinuity estimates for the performance dataset, separately by credit account
type, and using alternative classifications of account performance. Each coefficient (RD Estimate) estimates a
percentage point effect of having an additional medical collection reported on the account’s credit limit or loan
principal. These effects can be represented as percent changes by comparing to a baseline “Avg. credit am.”, which
is calculated as the average of the credit limit or loan principal for all inquiries made to the left of the regression
discontinuity threshold (or without medical collection reporting). Columns 1 through 3 limit the sample to inquiries
associated with medical collections over $500 made when the consumer had no medical collections under $500 on
their consumer report. Columns 4 through 6 includes the full sample. The dependent variable in Columns 1 and 4,
“D30+”, is whether the account was ever at least 30 days delinquent within two years of its origination. The
dependent variable in Columns 2 and 5, “D90+ alt.”, is whether the account was at least 90 days delinquent exactly
two years after the origination date, in contrast to the primary classification which considers whether the account
was ever at least 90 days delinquent within two years of the origination date. The dependent variable in Columns 3
and 6 is the total amount past due or charged off on the account exactly two years after the account’s origination
date if either value is positive and non-missing. If accounts have positive and non-missing past-due amounts and
charged-off amounts, the classification uses the charged-off amount. Standard errors are clustered by consumer and
adjusted using the Benjamini-Hochberg procedure.
(1) Over
$500, D30+

(2) Over $500, (3) Over $500, (4) All,
D90+ alt.
Past due am. D30+

(5) All,
D90+ alt.

(6) All, Past
due am.

-0.006

-0.002

-803.533

-0.000

0.000

-562.913

(0.016)

(0.013)

(732.117)

(0.008)

(0.005)

(301.400)

[-0.037, 0.025]

[-0.027, 0.023]

[-2238.455, 631390] [-0.016. 0.015] [-0.009, 0.010] [-1153.647, 27.821]

Avg. dep. var.

0.322

0.156

7012.189

0.316

0.145

6510.499

Observations

71760

459094

81546

Panel C: Other
credit Accounts
RD Estimate

Standard errors in parentheses, 95 percent confidence intervals in brackets
∗ p < 0.1, ∗∗ p < 0.05, ∗∗∗ p < 0.01

Table 17 estimates Equation 1 on the performance dataset using alternative measures of
account performance. Columns 1, 2, 4, and 5 show small and statistically significant effects of
medical collection reporting on account performance, as in Columns 1 and 4 of Table 8. In
Panel A, Columns 3 and 6 provide relatively small but at least marginally significant effects,
suggesting that medical collection reporting may lead to lower past-due or charged-off amounts
for credit cards, when those amounts are nonzero. This may be caused by the lower credit limits
provided to consumers with reported medical collections, as shown in Table 16. Though credit
cards originated to consumers with unreported medical collections may be no more likely to
become seriously delinquent within two years, the dollar amount past due when the account is
delinquent may be higher because consumers with unreported medical collections receive higher
credit limits. Additionally, creditors can earn higher revenues when providing higher credit limits
to consumers who revolve their balance from month-to-month and pay interest fees. The results
in Panels B and C show no statistically significant effects on past-due or charged-off amounts for
mortgages, as expected because there were no differences in serious delinquency or in the dollar
amount of credit provided.

List of Subjects in 12 CFR Part 1022
Banks, banking, Consumer protection, Credit unions, Holding companies, National
banks, Privacy, Reporting and recordkeeping requirements, Savings associations.
Authority and Issuance
For the reasons set forth in the preamble, the CFPB proposes to amend 12 CFR part 1022,
as set forth below:
PART 1022—FAIR CREDIT REPORTING (REGULATION V)
1. The authority citation for part 1022 continues to read as follows:
Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1681a, 1681b, 1681c, 1681c–1, 1681c–3,
1681e, 1681g, 1681i, 1681j, 1681m, 1681s, 1681s–2, 1681s–3, and 1681t; Sec. 214, Pub. L.
108–159, 117 Stat. 1952.
Subpart A—General Provisions
2. Amend § 1022.3 by adding paragraph (j) to read as follows:
§ 1022.3 Definitions.
*

*

*

*

*

(j) Medical debt information means medical information that pertains to a debt owed by a
consumer to a person whose primary business is providing medical services, products, or
devices, or to such person’s agent or assignee, for the provision of such medical services,
products, or devices. Medical debt information includes but is not limited to medical bills that
are not past due or that have been paid.
*

*

*

*

*

Subpart D—Medical Information
3. Amend § 1022.30 by:
a. Revising paragraph (c);
b. Removing and reserving paragraph (d);
c. Revising paragraphs (e)(1)(viii) and (ix); and
d. Adding paragraphs (e)(1)(x)(A) through (C) and (e)(6) and (7).

The revisions and additions read as follows:
§ 1022.30 Obtaining or using medical information in connection with a determination of
eligibility for credit.
*

*

*

*

*

(c) Rule of construction for obtaining and using unsolicited medical information—(1) In
general. A creditor does not obtain medical information in violation of the prohibition if it
receives medical information pertaining to a consumer in connection with any determination of
the consumer’s eligibility, or continued eligibility, for credit without specifically requesting
medical information.
(2) Use of unsolicited medical information. A creditor that receives unsolicited medical
information in the manner described in paragraph (c)(1) of this section may use that information
in connection with any determination of the consumer’s eligibility, or continued eligibility, for
credit to the extent the creditor can rely on at least one of the exceptions in § 1022.30(e).
(3) Examples. A creditor does not obtain medical information in violation of the
prohibition if, for example:
(i) In response to a general question regarding a consumer’s debts or expenses, the
creditor receives information that the consumer owes a debt to a hospital.
(ii) In a conversation with the creditor’s loan officer, the consumer informs the creditor
that the consumer has a particular medical condition.
(d) [Reserved].
(e) *

*

*

(1) *

*

*

(viii) To determine the consumer’s eligibility for, the triggering of, or the reactivation of
a debt cancellation contract or debt suspension agreement if a medical condition or event is a
triggering event for the provision of benefits under the contract or agreement;

(ix) To determine the consumer’s eligibility for, the triggering of, or the reactivation of a
credit insurance product if a medical condition or event is a triggering event for the provision of
benefits under the product; or
(x) So long as the conditions in paragraphs (e)(1)(x)(A) through (C) of this section are
met:
(A) The medical information relates to income, benefits, or the purpose of the loan,
including the use of proceeds. Medical information relating to income and benefits include, for
example, the dollar amount and continued eligibility for disability income, workers’
compensation income, or other benefits related to health or a medical condition that is relied on
as a source of repayment.
(B) The creditor uses the medical information in a manner and to an extent that is no less
favorable than it would use comparable information that is not medical information in a credit
transaction.
(C) The creditor does not take the consumer’s physical, mental, or behavioral health,
condition or history, type of treatment, or prognosis into account as part of the determination of
the consumer’s eligibility, or continued eligibility, for credit.
*

*

*

*

*

(6) Example to comply with applicable requirements of local, State, or Federal laws. A
consumer applies for a mortgage loan subject to §§ 1026.43(c) or 1026.34(a)(4) of this chapter,
or an open-end (not home-secured) credit card account subject to § 1026.51(a) of this chapter.
The application does not specifically request medical information, but the consumer provides
unsolicited medical information on the application. The creditor or the card issuer is permitted to
use such medical information in connection with any determination of the consumer’s eligibility,
or continued eligibility, for credit only to the extent required by the applicable Federal law and
implementing regulation. For example, assume a consumer applies for a mortgage loan subject to
§ 1026.43(c) of this chapter. Assume further that the creditor has not specifically requested

medical information on the application, but the consumer provides information on a current debt
obligation, such as a monthly medical payment plan, that is medical information. The creditor is
permitted to consider the existence and the amount of the medical payment plan as required in
considering factors under § 1026.43(c)(2) of this chapter, such as the current debt obligations,
consumer’s monthly debt-to-income ratio, and residual income, in making the repayment ability
determination required under § 1026.43(c)(1) of this chapter. In this circumstance, the creditor
would not be required to independently verify the existence and amount of the monthly medical
payment plan, as provided for under § 1026.43(c)(3)(iii) of this chapter. See also comment
43(c)(3)-6, describing a situation in which a consumer provides a creditor with information on a
debt obligation that is not listed on a consumer report. Further, a creditor or card issuer is not
permitted to obtain or use any medical information from a consumer reporting agency to comply
with the ability-to-repay rule under § 1026.43(c) of this chapter for closed-end mortgages, the
repayment ability rule under § 1026.34(a)(4) of this chapter for open-end, high-cost mortgages,
or the ability-to-pay rule under § 1026.51(a) of this chapter for open-end (not home-secured)
credit card accounts, because the creditor or card issuer can comply with those rules using
information provided by the consumer.
(7) Example of medical information relating to income and benefits. A consumer
indicates on an application for a $200,000 mortgage loan that she receives $15,000 in long-term
disability income each year from her former employer and has no other income. Annual income
of $15,000, regardless of source, would not be sufficient to support the requested amount of
credit. The creditor denies the application on the basis that the projected debt-to-income ratio of
the consumer does not meet the creditor’s underwriting criteria. The creditor has used medical
information in a manner and to an extent that is no less favorable than it would use comparable
non-medical information.
4. Add reserved §§ 1022.33 through 1022.37, and add § 1022.38 to read as follows:

§§ 1022.33-1022.37 [Reserved]
§ 1022.38 Duty of consumer reporting agencies regarding medical debt information.
(a) Scope. This section applies to any consumer reporting agency as defined in section
603(f) of the FCRA, 15 U.S.C. 1681a(f).
(b) Limitation regarding prohibited medical debt information. A consumer reporting
agency may include medical debt information, as defined in § 1022.3(j), in a consumer report
furnished to a creditor only if the consumer reporting agency:
(1) Has reason to believe the creditor intends to use the medical debt information in a
manner not prohibited by § 1022.30; and
(2) Is not otherwise prohibited from furnishing to the creditor a consumer report
containing the medical debt information, including by a State law that prohibits furnishing to the
creditor a consumer report containing medical debt information.

Rohit Chopra,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2024-13208 Filed: 6/17/2024 8:45 am; Publication Date: 6/18/2024]