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CFPB Finalizes Medical Debt Information Rule

Michael Christians • January 9, 2025

On January 7th, the Consumer Financial Protection Bureau (CFPB) issued its final rule to amend Regulation V concerning the use of medical information in connection with a determination of eligibility for credit. The final rule, available here, will be effective 60 days following its publication in the Federal Register.

Under the rule, creditors may only obtain and use medical information about a consumer in the following situations:

To determine the validity of a power of attorney designation due to the occurrence of a medical condition or event
To comply with local, state, or federal law
To determine whether a consumer qualifies for a special credit program designed to meet the needs of consumers with certain medical conditions
To prevent or detect fraud
In the case of credit for the purpose of financing a medical product or service, to verify the medical purpose of the loan and use of the loan proceeds
When the consumer specifically asks the creditor to consider his/her medical information to accommodate his/her particular circumstances
To determine whether the consumer qualifies for a forbearance triggered by a medical condition or event
To determine the consumer's eligibility for credit insurance or debt cancellation benefits as a result of a specified medical condition or event
The medical information relates to income payable to the consumer (e.g., disability benefits)

In addition, the rule prohibits consumer reporting agencies from providing a consumer report to a creditor that contains medical debt information about the consumer unless the agency has reason to believe the information will be used in a manner consistent with Regulation V. For this purpose, medical debt information includes information about a debt owed directly to the provider of a medical product, service, or device. It does not include debt payable to a third-party creditor, such as a credit card company.

NOTE: Based on when this rule was issued, it is subject to oversight under the Congressional Review Act (CRA). Under the CRA, both houses of Congress can pass a joint resolution that, if signed by the President, would repeal the rule and prohibit the CFPB from issuing a new rule in substantially the same form.

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