Bill Introduced in House, Senate to Amend FCRA, FDCPA Over Collection of Medical Debts

Legislation was introduced in both the House of Representatives and the Senate yesterday that seeks to amend the Fair Credit Reporting Act and Fair Debt Collection Practices Act with respect to how medical debts are collected.

The bills, called the Medical Debt Relief Act, were introduced by Sen. Jeff Merkley [D-Ore.] in the Senate and Rep. Katie Porter [D-Calif.] in the House. A copy of S.214 can be accessed by clicking here, and a copy of H.R. 773 can be accessed by clicking here.

The full text of the bills was not yet available, but a summary of the proposed legislation said that they would amend the FCRA to implement “a one-year waiting period before medical debt will be reported on a consumer’s credit report and to remove paid-off and settled medical debts from credit reports that have been fully paid or settled.” Meanwhile, the FDCPA would be amended to “provide a timetable for verification of medical debt and to increase the efficiency of credit markets with more perfect information, and for other purposes.”

Unlike credit cards or other types of debt, healthcare debts are usually incurred outside the control of a consumer, who suffers an accident or other type of medical emergency. Giving people more time to pay off medical debts before they start to impact a consumer’s credit report may keep more Americans from having to file for bankruptcy protection, Sen. Merkley said.

“There is nothing more outrageous than the fact that after a family has paid their medical debt, their credit is still destroyed as if that debt remains unpaid,” said Sen. Merkley, in a statement. “Credit agencies are repeatedly kicking families when they’re down and struggling to get back up, and in the middle of this devastating pandemic, it’s long past time we fix that.”

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