ACA International and Creditors Bureau USA yesterday filed a lawsuit challenging Colorado’s medical debt credit reporting law on the grounds that it is preempted by the Fair Credit Reporting Act. The suit was filed days after the Consumer Financial Protection Bureau formally withdrew guidance and stated that the FCRA preempts state laws governing credit reporting.
The background: The complaint, filed in the District Court for the District of Colorado, targets House Bill 23-1126, which bars credit reporting agencies from including adverse information about medical debt on consumer credit reports. The law, which took effect in August 2023, makes Colorado one of a handful of states to implement such a restriction.
- The plaintiffs argue that the state’s ban conflicts directly with federal law. The FCRA explicitly allows credit reporting agencies to include medical debt information, so long as it is properly coded to protect consumer privacy. The plaintiffs say that Congress struck a careful balance between consumer protection and credit market transparency, a balance that Colorado upended by outlawing the reporting of truthful, coded medical debt information.
- The complaint also references the CFPB’s recent policy reversal. After briefly suggesting in 2022 that the FCRA allowed more state-level variation, the Bureau’s October 2025 interpretive rule reaffirmed that the FCRA establishes national standards for credit reporting and preempts conflicting state laws.
The claims: The plaintiffs asserts two major claims.
- First, they argue HB 23-1126 is preempted by the FCRA because it prohibits conduct that federal law explicitly permits. The complaint cites federal case law emphasizing that the FCRA “leaves no room for overlapping state regulations” and seeks a court declaration that the Colorado statute cannot be enforced.
- Second, the plaintiffs contend the law violates the First Amendment by restricting truthful commercial speech. They argue that HB 23-1126 discriminates based on both the content and purpose of speech, allowing credit bureaus to report positive medical payment information but not negative medical debts, and even permitting such reporting only in limited “favored” contexts like large mortgage transactions.
- The complaint says Colorado lawmakers were “clouded by fervor rather than grounded in reason” and that the law “hurts patients and Coloradans more than it helps” by disrupting transparency in the credit market and undermining healthcare providers’ ability to collect payments.
- The suit seeks to block the law’s enforcement, arguing that its continued application will cause “irreparable harm” to creditors, collectors, and consumers alike.
