FOR IMMEDIATE RELEASE: Oct. 30, 2025 

Contact: Jack Cardinal, jcardinal@communitycatalyst.org

CFPB Tries to Reverse Course and Block States from Protecting People from Harmful Medical Debt Reporting 

Boston, MA — This week, the Consumer Financial Protection Bureau (CFPB) issued an interpretative rule that discourages states from protecting people with medical debt. The CFPB claims that federal law should block states from stopping medical debt from showing up on credit reports. The rule isn’t legally binding and doesn’t change any of the 15 state laws already in effect, but it invites court challenges to these important state protections.  

Statement of Mona Shah, Senior Director of Policy and Strategy at Community Catalyst:  

“No one should see their credit ruined — or be trapped in debt — simply because they got sick. It’s both fiscally and morally wrong, dragging down family budgets and local economies instead of addressing the real problem: lack of affordable, comprehensive health care. At a time when millions are losing coverage due to political decisions to cut Medicaid and when vital ACA Marketplace tax credits are set to expire, policymakers should be finding ways to make care more affordable, not punishing people for getting it. 

“Instead of attacking state protections that benefit everyday people, we urge the Trump administration to work with Congress to address the root causes of medical debt. That starts with reversing harmful Medicaid cuts, permanently extending the enhanced premium tax credits that make coverage affordable for millions, and holding hospitals and health systems accountable for predatory billing and collection practices. Real relief comes from policy choices that put people over profit.” 

The Impact of Medical Debt on Families and the U.S. Economy 

Medical debt is one of the leading causes of bankruptcy in the United States, affecting over 100 million people in every community — both insured and uninsured. Millions of people are blocked from buying homes, starting businesses, or securing loans simply because they got the essential care they needed. Families are forced to drain savings, skip essentials like food, or sign up for high-interest credit cards just to pay medical bills. 

This is exactly the opposite of what people want and need. Voters overwhelmingly agree that no one should face financial ruin for getting sick. Instead of trapping people in debt, we should be creating pathways to stability and opportunity — by ensuring affordable coverage, holding health systems accountable, and removing medical debt from credit reports for everyone once and for all. 

A Call to Action 

For more than 15 years, Community Catalyst has led the national fight to eliminate medical debt — partnering with advocates, policymakers, and communities to advance reforms that put people over profit. 

Community Catalyst calls on policymakers to act swiftly to ensure that medical debt does not hurt people’s credit scores. Federal legislation is needed to remove medical debt from credit reports across the country. Additionally, states should continue to pass laws that prohibit credit reporting of medical debt.  No one should face financial ruin simply for getting the care they need.  

States that have already taken steps to protect their residents from medical debt reporting —including Colorado’s trailblazing 2023 law prohibiting medical debt from credit reports — should continue enforcing their laws with confidence. This federal action should not deter state legislatures from passing similar protections to keep families from being punished for getting the care they need.  

Know Your Rights: Medical Bills and Deferred Interest Credit Cards 

When it comes to medical bills, you have rights. If you’re unsure whether you qualify for help, ask about charity care or financial assistance policies — many hospitals are required by law to offer them. 

Be cautious about using predatory deferred interest medical credit cards to pay health care costs. These cards may seem like an easy fix but often come with hidden traps — if the balance isn’t paid in full by the end of the promotional period, you can often be hit with back interest at high rates, adding hundreds or even thousands of dollars to your bill. 

Community Catalyst and our partners are working to end these predatory practices and push for greater transparency, stronger financial protections, and fair billing standards that keep families out of debt. 

###

About Community Catalyst: 

Community Catalyst is a national organization dedicated to building the power of people to create a health system rooted in race equity and health justice, and a society where health is a right for all. We’re an experienced, trusted partner to organizations across the country, a change agent to policymakers at the local, state, and national level, and both an adversary and a collaborator to health systems in our efforts to advance health justice. We partner with local, state and national organizations and leaders to leverage and build power so that people are at the center of important decisions about health and health care, whether they are made by health care executives, in state houses, or on Capitol Hill. Together with partners, we’re building a powerful, united movement with a shared vision of and strategy for a health system accountable to all people. Learn more at www.communitycatalyst.org.