By Mike Reeves | ComplianceJournal.news
The U.S. District Court for the Eastern District of Texas vacated the CFPB's rule prohibiting creditors and consumer reporting agencies from furnishing and considering certain medical debt information on credit reports. The court acted on the joint request of the bureau and plaintiffs in Cornerstone Credit Union League v. CFPB, agreeing that the rule exceeded the CFPB's statutory authority under the Fair Credit Reporting Act. The FCRA permits furnishing of medical debt information so long as it does not identify the specific provider or the nature of services — a standard the CFPB's rule had attempted to circumvent.
For CRAs and furnishers, the vacatur means the medical debt reporting prohibition will not take effect as proposed. Medical debt information that complies with the FCRA's existing standards — anonymized to the extent required by the statute — may continue to be furnished and considered in credit decisions. The practical effect is a return to the pre-rule status quo pending any future rulemaking.
The more significant long-term question is what the vacatur means for state medical debt laws. Several states — including Colorado, New York, and California — have enacted or proposed their own restrictions on medical debt credit reporting, relying partly on the assumption that the CFPB's 2022 guidance limiting FCRA preemption would protect those laws. The CFPB's October 2025 interpretive rule broadening preemption has already put those state laws in jeopardy. The medical debt rule vacatur adds another layer of uncertainty about whether state protections survive. Expect litigation on this intersection throughout 2026.
Source: CFPB Consumer Finance Resources — Read the CFPB's update →