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New Bill Would Amend FCRA by Delaying Reporting of Medical Debt

Senate Bill 1581, introduced by Sen. Jeff Merkley [D-Ore.] and co-sponsored by Sen. Richard Blumenthal [D-Conn.], Sen. Elizabeth Warren [D-Mass.], Sen. Bob Menendez [D-N.J.], and Sen. Dick Durbin [D-Ill.], would amend the Fair Credit Reporting Act by delaying reporting of an individual’s medical debt to credit reporting agencies for one year.  It would also require the removal of medical debt that has been paid off or settled from an individual’s credit report.

The bill would also amend the Fair Debt Collections Practices Act to require debt collectors to send consumers a statement informing them that medical debt will not be reported to a credit bureau for one year from when the statement was sent.  The statement would also inform consumers that if the debt is paid off or settled prior to the end of the one-year period, that it will not be reported to a credit bureau.

Sen. Blumenthal said in a statement: “Medical challenges should not fatally infect financial health. Americans suffering from injury or illness should be free to focus on their recovery, without financial distraction. Medical debt is not the same as credit card debt—getting injured or sick shouldn’t permanently prevent an American from buying a home or a car.”

The bill is supported by the National Consumer Law Center.

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About this Author

John Hawk Attorney Womble Bond Litigator

John Hawk is a skilled litigator with over a decade of experience serving the complex and diverse litigation needs of Fortune 500 companies and smaller lenders. He focuses his practice on consumer finance, lender liability and insurance.

Specifically, John routinely defends cases brought pursuant to ERISA, FCRA, TCPA and FDCPA. His clients include life and disability insurance companies, banks and other lenders, and mortgage servicers.

John’s experience includes frequent appearances in state and federal courts, including the South Carolina Court of Appeals and the Supreme...