California Attorney General Rob Bonta today issued a consumer alert reminding consumers, healthcare providers, and credit reporting agencies that in California it remains illegal for medical debt to appear on credit reports. Recently, the Trump Administration’s Consumer Financial Protection Bureau (CFPB) issued an interpretive rule claiming that federal law generally preempts state medical debt laws — it does not.
“In California, it is illegal for medical debt to appear on your credit report. Medical debt — which the law generally defines as debt owed to a provider of medical services, products, or devices — is generally unforeseen; it is not a reliable predictor of credit risk and can make it harder for people who are already struggling to secure housing, a job, or a car to get to work," said Attorney General Bonta. "California banned medical debt from appearing on credit reports because we recognized this practice as harmful to struggling consumers and not helpful in determining creditworthiness. Let me be clear: This remains the law in California. I urge consumers to understand their rights and to regularly check their credit reports to ensure medical debt does not make an appearance. The California Department of Justice is committed to protecting and enforcing all of California’s laws — including this one.”