Industry win: CFPB medical debt rule overturned

The CFPB’s medical debt rule is now overturned as a Texas judge vacated the rule following a successful legal challenge from the Cornerstone League and Consumer Data Industry Association.  America’s Credit Unions also opposed the rule, which would have prohibited creditors from using medical debt information in credit eligibility determinations and consumer reporting agencies from including medical debt in reports to creditors making credit determinations.  

Before the bureau issued the rule, America’s Credit Unions asked for issued guidance instead of a rulemaking to allow for more accurate, complete information when credit unions and other financial institutions make lending decisions.

The rule would have had a seismic negative impact on borrowers looking to buy a home, start a small business, or pay for higher education, America’s Credit Unions Vice President of Policy Engagement and Credit Union Operations Ann Petros wrote in July in CUInsight.