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On November 5, 2025, a national debt collection trade group and one of its members filed a lawsuit against the state of Colorado's in an attempt to block its 2023 medical debt credit reporting law, HB 23-1126. The complaint alleges that the law, which bars adverse medical debt information from consumer credit reports and restricts related collection communications, is preempted by the Fair Credit Reporting Act and violates the First Amendment.
In making its claims, the complaint argues that the law conflicts with the CFPB's recent interpretation of the Fair Credit Reporting Act where the agency asserted that FCRA pre-empts state attempts to restrict the reporting of medical debt (previously discussed here), and claims that the law has created economic and operational challenges for multiple types of market participants. Plaintiffs also assert that the Colorado law is a content, purpose, and listener-based restriction on truthful commercial speech, because it bars negative medical tradelines in most credit contexts while allowing positive information and certain mortgage-related reporting.
Putting It Into Practice: As we predicted, the CFPB's recent re-interpretation of FCRA has opened the floodgates of litigation. The lawsuit highlights the increasing tension between state efforts to remove medical debt from credit reports (previously discussed here, here, and here) and a renewed emphasis on national credit reporting standards. Given the plaintiffs' reliance on recent federal developments, similar challenges to other state medical debt reporting laws are likely to follow, particularly in states that have enacted broad suppression requirements.
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