A District Court judge in Maine has granted a trade association’s motion for judgment after it sued the state for enacting laws that governed how, among other things, medical debts are reported to credit reporting agencies by collection agencies.
A copy of the ruling in the case of Consumer Data Industry Association v. Aaron M. Frey and William N. Lund can be accessed by clicking here.
The CDIA filed its lawsuit last year, after the state legislature enacted a pair of amendments to the Maine Fair Credit Reporting Act. The first law restricts furnishers from reporting a medical debt until it is at least 180 days old and requires furnishers to report payments on medical debts the same as a regular credit-based transaction, as long as the individual is making timely payments. The second law requires furnishers to investigate if a person claims a debt is a result of economic abuse, such as when an individual takes out a credit card in his or her spouse’s name. In such instances, the debt is to be removed from the victim’s credit report.
Because the laws attempted to regulate the content of an individual’s credit report, which is pre-empted by the Fair Credit Reporting Act, the CDIA filed its lawsuit against the state.
What essentially seemed to convince Judge George Z. Singal of the District Court for the District of Maine that the plaintiff’s argument was stronger was an amendment to the Fair Credit Reporting Act that was made by Congress in 2018 that governed how medical debts incurred by veterans was reported. Such a provision “reflects that Congress has ‘expressly considered’ the extent to which medical debts ought to be reported on consumer debts,” the plaintiffs argued. Judge Singal disagreed with the defendant’s argument that the plaintiff’s assertion was an “exaggeration.”
