The CFPB on April 30, 2025, reached an agreement with lender trade groups to vacate the Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information Rule (the Medical Debt Rule). The joint motion for entry of consent judgment was filed in the U.S. District Court for the Eastern District of Texas one month before the stay on the rule's effective date was set to expire.
The Medical Debt Rule prohibited consumer reporting agencies from "furnishing medical debt information to creditors – even coded information." The Consumer Data Industry Association (CDIA) and Cornerstone Credit Union League filed suit against the CFPB in January 2025, arguing that the Medical Debt Rule violated 15 U.S.C. § 1681(g)(1), which allows consumer reporting agencies to report a consumer's medical debt information on consumer reports on the condition that the medical information is coded to prevent disclosure of the individual's medical condition, procedure or physician. In a joint motion for consent judgment, the parties acknowledged that "the rule contradicts the clear and unambiguous language of the statute."
This consent judgment is one of the most recent efforts the CFPB has taken to eliminate litigation challenging the validity of several final rules. As Holland & Knight previously reported, the CFPB sought to vacate the Credit Cart Late Fee Rule after trade groups and financial institutions filed suit alleging that the rule exceeded the CFPB's statutory authority. These decisions, along with the CFPB's current investigation into guidance documents that infringe upon the rulemaking process, as Holland & Knight previously reported, support the Trump Administration's efforts to scale back the scope and agenda of the CFPB.
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