Oregon is the latest state attempting to fill the void being left by the Consumer Financial Protection Bureau with a medical debt credit reporting and collection bill, which this week passed the state Senate.
Driving the news:
The Oregon Senate on Wednesday passed Senate Bill 605, which prohibits medical providers, hospitals, and debt collectors from reporting medical debt to consumer credit reporting agencies. The legislation cleared the chamber with an 18-10 vote and now moves to the Oregon House of Representatives.
Key details:
- The bill makes it unlawful for any party to report the existence or amount of medical debt owed by an Oregon resident to a credit bureau.
- Credit bureaus would also be prohibited from including known or reasonably knowable medical debt in a consumer credit report.
- Consumers would be allowed to sue providers, collectors, or credit bureaus that violate the law.
- Courts could declare any medical debt reported in violation of the law to be void and uncollectible.
- The definition of “medical debt” under the bill includes amounts owed for medical treatment (excluding cosmetic procedures unless reconstructive), medical devices, medications, and related services. It does not cover general credit card debt unless the credit was extended specifically for medical expenses.
What they’re saying: “Bouncing back from a serious illness is hard enough,” said Sen. Deb Patterson, chair of the Senate Health Care Committee. “We’re stopping that experience from dimming the financial future of responsible borrowers.”
Sen. Wlnsvey Campos, the bill’s chief sponsor, added, “Using medical debt as a metric in these decisions is deeply flawed. Penalizing someone’s credit score doesn’t help them pay off their bill. It only makes it harder to recover.”
Zoom out: The bill mirrors the Consumer Financial Protection Bureau’s medical debt credit reporting rule, which remains in limbo. That rule, which would affect 15 million Americans and remove $49 billion in medical debt from credit reports, has been delayed due to legal and administrative challenges.
Opposition voices:
- The Consumer Data Industry Association, representing credit bureaus, opposed the bill, claiming it would lead to increased risk and reduced access to credit.
- The Hospital Association of Oregon argued that the legislation would add to administrative burdens and expose hospitals to lawsuits, especially when they are already facing financial hardships.
What’s next: The bill now heads to the Oregon House of Representatives for further debate and consideration.
