Medical Debt and Credit Reports: CFPB Urges Oregon to Pass Reporting Ban, Says Federal Law Leaves Room for Stricter State Rules

The April 17, 2026 letter, signed by CFPB General Counsel Seth Frotman, addresses SB 605, which would prohibit medical services providers and their debt collectors from reporting medical debt to consumer reporting agencies and would bar those agencies from including such information in consumer reports. The letter is advocacy, not a binding rule or enforcement action.

Frotman wrote to Oregon Senator Wlnsvey Campos and Representative Nathan Sosa that preemption of state law is narrow under both the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, and that states may prohibit or limit the inclusion of medical bill information on consumer reports. The CFPB pointed to a 2022 interpretive rule it issued explaining that state laws prohibiting furnishers from reporting medical debt to consumer reporting agencies would generally not be preempted by the federal FCRA.

The letter also notes that on January 7, 2025, the CFPB finalized a regulation banning medical bills from credit reports used by lenders and prohibiting lenders from using medical information in lending decisions. The CFPB acknowledged that the regulation has since been challenged twice in Texas federal court.

On the preemption question, the letter cites two appellate decisions the agency says support its position. In Consumer Data Industry Association v. Frey, the First Circuit in February 2022 rejected a challenge to Maine's Medical Debt Reporting Act, holding that the FCRA does not categorically preempt all state laws governing information in consumer reports. In Aargon Agency, Inc. v. O'Laughlin, the Ninth Circuit in June 2023 denied a challenge to Nevada Senate Bill 248, which restricts medical debt collection, on the grounds that the legislation was not preempted by federal law.

The CFPB also pushed back on industry arguments that excluding medical debt makes credit reports less accurate. The bureau cited its own research finding that medical debt is less predictive of future credit performance than other tradelines, and noted that the most common consumer complaints about medical debt collection allege the debt was already paid, does not belong to the consumer, or is otherwise incorrect. The letter states that among consumers who report problems paying medical bills, 66 percent acquired their debt because of a one-time or short-term expense arising from an acute medical need.

The letter notes that Colorado and New York passed legislation in 2023 to bar medical bills from consumer reports, and that several other states have followed or are considering similar measures. VantageScore, described in the letter as one of the major credit score providers, eliminated all medical collection data from one of its scoring models in August 2022 and noted that it expected the impact on its models' performance to be minimal for a large segment of the population.