Federal Judge Overturns Biden-Era Medical Debt Credit Rule Affecting 15 Million Americans

A federal judge appointed by President Donald Trump has overturned a Biden-era Consumer Financial Protection Bureau (CFPB) rule that would have removed roughly $49 billion in medical debt from the credit reports of about 15 million Americans. Judge Sean Jordan ruled that the CFPB exceeded its authority under the Fair Credit Reporting Act by attempting to ban certain types of medical debt and restrict lenders from using medical information in loan decisions, stating that only Congress can enact such changes. The now-vacated rule aimed to improve credit scores by an average of 20 points for those with medical debt and was expected to increase mortgage approvals by approximately 22,000 annually. Despite this, the three major credit bureaus have voluntarily removed medical debts under $500 from credit reports, affecting about 70% of medical debts in collections. President Trump and his supporters praised the ruling as protecting the integrity of the credit system, while the Biden administration and CFPB Director Rohit Chopra argued the rule would have helped prevent medical debt from unfairly damaging Americans’ financial futures. This decision comes amid broader efforts by the Trump administration to roll back regulations and government agency powers, including attempts to dismantle the CFPB and actions that could impact Medicaid coverage.