Trump-Appointed Judge Blocks Medical Debt Relief, Harming Millions— Especially Black Americans

July 17, 2025

A federal judge has blocked a Consumer Financial Protection Bureau (CFPB) rule that would have removed medical debt from the credit reports of approximately 15 million Americans. Judge Sean Jordan of the U.S. District Court for the Eastern District of Texas sided with credit reporting industry groups, ruling that the CFPB exceeded its authority under the Fair Credit Reporting Act. The decision prevents implementation of a rule designed to stop medical debt—often resulting from billing errors, insurance disputes, or emergencies—from negatively affecting credit scores.

Who is affected

Approximately 15 million Americans who would have had medical debt removed from credit reports
Nearly 20 million adults in the U.S. who owe medical debt (totaling an estimated $220 billion)
Black Americans (13% report having medical debt compared to 8% of white Americans)
Women, people with disabilities, and those living in the South and rural areas
Low-income households and communities of color
People with medical debt who cut back on essentials, drain savings, or skip needed care

What action is being taken

Judge Sean Jordan has blocked the CFPB rule that would have removed medical debt from credit reports
The Trump-appointed judge ruled to vacate the January rule issued under the Biden administration
Private credit bureaus like Equifax, Experian, and TransUnion are taking limited steps such as removing medical collections under $500
Some states like Colorado and New York are implementing their own protections for consumers

Why it matters

Medical debt significantly impacts credit scores despite not being a reliable indicator of financial behavior
More than half of all collection items on credit reports are for medical bills
The burden of medical debt is unequally distributed, with Black Americans and other marginalized groups carrying a disproportionate share
Medical debt forces many Americans to make difficult financial choices, including cutting back on essentials and avoiding necessary medical care
The ruling has racial and economic consequences, leaving millions exposed to credit damage from medical debt

What's next

No explicit next steps stated in the article

Read full article from source: The Washington Informer