U.S. Judge Halts Bid to Remove Medical Debt from Credit Reports

Advanced | July 24, 2025

✨ Read the article aloud on your own or repeat each paragraph after your tutor.

A Key Ruling for Consumer Credit

Medical Debt Credit Report Rule Blocked: The Background

Federal Judge Vacates CFPB Rule

On Friday, July 11, 2025, a significant legal decision emerged from the U.S. District Court of Texas’ Eastern District. Judge Sean Jordan blocked a Consumer Financial Protection Bureau (CFPB) rule that aimed to remove unpaid medical debt from credit reports. This decision, widely reported as the Medical Debt Credit Report Rule Blocked, directly impacts approximately 15 million Americans who would have seen an estimated $49 billion to $50 billion in medical debt erased from their financial histories. The judge asserted that the CFPB, in creating this rule, exceeded its authority under the Fair Credit Reporting Act (FCRA) of 1970, which explicitly permits credit reporting agencies to use properly coded medical debt information.

What the Rule Intended

The CFPB, under the Biden administration, had finalized this rule in January 2025. Their primary goal was to improve the financial standing of millions, arguing that medical debt is often an unreliable indicator of a consumer’s ability to repay other loans due to frequent inaccuracies and disputes. If implemented, the rule was projected to boost affected individuals’ credit scores by an average of 20 points and potentially lead to an additional 22,000 approved mortgages annually.

The Legal Challenge and Its Fallout

Who Opposed the Rule?

The lawsuit that led to this blockage was filed by the Cornerstone Credit Union League and the Consumer Data Industry Association (CDIA), a trade group representing the credit reporting industry. The CDIA welcomed the court’s decision, emphasizing that it helps lenders maintain a complete and accurate picture when making lending decisions. Interestingly, the Trump administration, which took office in January 2025, chose not to defend the regulation in court.

Impact on Vulnerable Populations

Consumer advocates have voiced strong criticism of the ruling, expressing concern that it eliminates a vital form of relief for individuals burdened by medical debt. This issue disproportionately affects certain groups, including Black Americans, women, people with disabilities, and residents of the South and rural areas. The decision means that for now, medical debt will continue to appear on credit reports, impacting financial opportunities for millions.

Vocabulary

vacate (verb): To cancel or annul a legal judgment or process.
- Example: “The judge decided to vacate the previous ruling, making it invalid.”
exceeded authority (verb phrase): Went beyond the limits of one’s legal power or jurisdiction.
- Example: “Experts accused the committee of exceeding its authority by making decisions outside its mandate.”
credit reporting agencies (noun phrase): Companies that collect and maintain consumer credit information and sell it to lenders.
- Example: “Before issuing a loan, banks often check reports from credit reporting agencies.”
disputes (noun): Arguments or disagreements, especially official ones.
- Example: “Many consumers have disputes with their medical bills due to billing errors.”
boost (verb): To help improve or increase something.
- Example: “The government expects that the new policies will boost the economy.”
assumed office (verb phrase): Began to hold a position of authority or power.
- Example: “The new president assumed office in January, promising immediate reforms.”
consumer advocates (noun phrase): Individuals or groups who work to protect the rights and interests of consumers.
- Example: “Consumer advocates are pushing for stricter regulations on product safety.”
crucial (adjective): Extremely important or necessary.
- Example: “Receiving timely medical care is crucial for recovery.”
burdened (adjective): Heavily loaded or troubled.
- Example: “Many families feel that they are burdened by overwhelming medical debt.”
disproportionately (adverb): To an extent that is too large or too small in comparison with something else.
- Example: “The recent job losses have disproportionately affected younger workers.”

Discussion Questions (About the Article)

What was the main purpose of the CFPB rule that was blocked by Judge Jordan?
According to the judge, why was the CFPB’s rule considered to be beyond its authority?
Which organizations filed the lawsuit to stop the rule, and what was their reasoning?
How did the Trump administration’s stance affect the defense of the regulation in court?
What are some of the potential negative impacts of this ruling, especially for specific demographic groups?

Discussion Questions (About the Topic)

Do you think medical debt should appear on credit reports? Why or why not?
How might the presence of medical debt on credit reports affect an individual’s financial future?
What are some other ways a government could help individuals burdened by medical debt?
How important is a good credit score in your country, and what are its main benefits?
In what ways can inaccurate information on credit reports be problematic for consumers?

Related Idiom

To weigh on someone/something

Meaning: To be a source of worry, pressure, or a heavy burden for someone.
Example: “The news about the blocked rule will undoubtedly weigh on millions of Americans already struggling with medical bills.”

📢 Want more tips like this? 👉 Sign up for the All About English Mastery Newsletter! Click here to join us!

Want to finally Master English but don’t have the time? Mastering English for Busy Professionals is the course for you! Check it out now!

Follow our YouTube Channel @All_About_English for more great insights and tips

This article was inspired by: July 15 2025 – NPR