Medical debt on your credit report: the federal rule is gone, the state laws are contested, your dispute rights are not
In January 2025 the CFPB finalized a rule to keep most medical debt off credit reports. A Texas federal court vacated it in July 2025 before it took effect, and in October 2025 the CFPB said federal law preempts state medical debt reporting bans, while leaving the final word to the courts. What has not changed: a medical debt reported wrong can be disputed under the FCRA, and a collector must report a disputed debt as disputed.
Few areas of credit reporting law moved as much in 2025 as medical debt. A federal rule was finalized, then struck down. The federal agency that wrote it then took the opposite position on state laws that do something similar. For someone looking at a hospital bill on their credit report, the result is confusing. This post sorts out what is settled and what is not.
The federal rule: finalized, stayed, vacated
- January 7, 2025. The CFPB issued a final rule amending Regulation V, the rule under the Fair Credit Reporting Act, to restrict medical debt information on credit reports and its use by lenders.
- March 17, 2025. That was the rule's scheduled effective date. It was stayed until June 15, 2025.
- July 11, 2025. The U.S. District Court for the Eastern District of Texas vacated the rule in Cornerstone Credit Union League v. CFPB. According to the CFPB, the court agreed with both the Bureau and the plaintiffs that the rule exceeded the Bureau's statutory authority and was contrary to the FCRA, because it tried to prohibit furnishing and considering coded medical debt information that the FCRA allows under certain conditions, and because it tried to let the Bureau limit report contents based on state and other law.
By the time of the ruling, the CFPB itself was asking the court to set the rule aside. Its archived announcement now says the materials on the rule are for reference only. The rule never took effect.
October 2025: the CFPB turns on state laws
On October 28, 2025, the CFPB published an interpretive rule titled "Fair Credit Reporting Act; Preemption of State Laws." It says the FCRA generally preempts state laws that touch broad areas of credit reporting, and it confirms withdrawal of a 2022 interpretive rule that had read preemption narrowly. The 2022 rule had said states could forbid credit bureaus from reporting whole categories of information, such as medical debt. The 2022 rule had already been on the list of guidance the CFPB withdrew on May 12, 2025.
The new rule also says something important about its own limits: parties can litigate preemption of particular state laws in court, and withdrawing the 2022 rule has no effect on the legal status of any state law. An interpretive rule is the agency's view. It is not a court judgment striking down a statute.
What this means in plain terms: state medical debt reporting laws have not been repealed. The federal agency now says it thinks they are preempted, and a court will decide if the question is raised in a case.
New York, New Jersey and Florida
| State | Law | What it does |
|---|---|---|
| New York | Fair Medical Debt Reporting Act, S.4907A/A.6275A, signed December 13, 2023 | Bars hospitals, health care professionals and certified ambulance services from reporting medical debt to credit agencies |
| New Jersey | Medical Debt Relief Act, P.L. 2024, c.48, approved July 22, 2024 | Bars medical creditors and collectors from reporting medical debt for services on and after its effective date; bars credit bureaus from reporting paid medical debt or medical debt under $500, whatever its age; caps interest at 3% a year; no wage garnishment for patients under 600% of the federal poverty level |
| Florida | HB 7089, Chapter 2024-183, effective July 1, 2024 | Not a reporting ban. Sets a three-year limit on suits to collect medical debt, counted from referral to a third-party collector, and requires hospitals to take steps before extraordinary collection actions |
When New York's law was signed, the Governor's office cited a 2023 Urban Institute study finding 740,000 New Yorkers with medical debt on their credit reports. New Jersey's interest cap and garnishment limit are collection rules, not reporting rules, so the CFPB's preemption position is not about them. The same is true of Florida's three-year limit. See New York, New Jersey and Florida.
What did not change: accuracy and disputes
Whatever happens to the state laws, federal law still requires two things that matter for most medical debt problems.
- Accuracy. A credit bureau must follow reasonable procedures to assure maximum possible accuracy (15 U.S.C. § 1681e(b)). A medical bill your insurer paid, a balance that is not yours, or a debt listed twice is an accuracy problem, medical or not.
- Real investigations. When you dispute, the bureau must conduct a reasonable reinvestigation, generally within 30 days, and notify the company that furnished the information within 5 business days (§ 1681i). That company must then investigate and report back (§ 1681s-2(b)).
- Disputed means disputed. A debt collector that reports a debt it knows you dispute, without saying it is disputed, is making a false statement under the FDCPA (15 U.S.C. § 1692e(8)).
- Obsolete items drop off. Most negative items cannot be reported after seven years (§ 1681c(a)).
If a bureau or furnisher willfully fails to follow the FCRA, you can recover actual damages or statutory damages of $100 to $1,000, plus punitive damages; for negligence, actual damages. The FCRA requires a company found liable to pay the consumer's reasonable attorney's fees and costs, and so does the FDCPA. The FCRA deadline is two years after you discover the violation, and no more than five years after it happened.
What to do with a medical debt on your report
- Get the reports and the bill. Match the account, date and amount against your explanation of benefits.
- Dispute in writing with each bureau reporting it, with copies of what shows the error. See how to dispute your credit report.
- Tell the collector in writing that you dispute the debt, and keep proof of delivery.
- If you have been sued over a medical bill, do not ignore the papers. The answer deadline is short. See sued by a debt collector.
Credit report errors
The common errors and the rules that cover them.
Read →A dispute that failed
When the bureau "verified" something that is wrong.
Read →All news
Every dated change since 2024, with sources.
Read →Sources: CFPB, Regulation V medical information rule page (link) and archived Jan. 7, 2025 release (link); 90 Fed. Reg., FR Doc. 2025-19671 (Oct. 28, 2025) (text); FR Doc. 2025-08286 (May 12, 2025) (text); N.Y. Governor's release, Dec. 13, 2023 (link); N.J. P.L. 2024, c.48 (text); Fla. HB 7089 (2024) (bill page); 15 U.S.C. §§ 1681c, 1681e(b), 1681i, 1681n, 1681o, 1681p, 1681s-2(b), 1692e(8).
Common questions
Is there still a federal ban on medical debt in credit reports?
No. The CFPB's January 2025 rule was vacated by the U.S. District Court for the Eastern District of Texas on July 11, 2025, and it never took effect. The CFPB's own page now says its materials on the rule are for reference only.
Do the New York and New Jersey medical debt laws still apply?
They are on the books. In October 2025 the CFPB said it believes the FCRA generally preempts state credit reporting laws, but its rule also says the status of any particular state law is a question for the courts. We do not predict how a court will rule. If a medical provider or collector in New York or New Jersey reports a debt those laws cover, talk to a lawyer about both the state law and the FCRA.
What can I do about a medical debt on my report that I do not owe?
Dispute it in writing with the credit bureau, which must conduct a reasonable reinvestigation, generally within 30 days, and notify the company that reported it. If the bureau or the furnisher does not do its job, the FCRA provides damages, and it requires a company found liable to pay the consumer's reasonable attorney's fees and costs.
Tell us what they did.
One conversation with an attorney, in your language. We tell you which laws the collector or the credit bureau broke, which deadline runs first, and what to save this week. If it is not a case we can take, we say so and tell you where to go.
(718) 484-7510The FDCPA and the FCRA require a company found liable to pay the consumer’s reasonable attorney’s fees and costs. Our fee arrangement is confirmed in a written retainer before we begin. English, Russian and Spanish in-house; an interpreter for any other language.