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

July 24, 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, appointed by Trump, ruled in favor of credit reporting industry groups who claimed the CFPB exceeded its authority under the Fair Credit Reporting Act. The now-blocked rule aimed to prevent medical debt, which often stems from billing errors or unavoidable emergencies, from negatively impacting credit scores.

Who is affected

Approximately 15 million Americans who have medical debt on their credit reports
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
The nearly 20 million adults in the U.S. who collectively owe an estimated $220 billion in medical debt
The 3 million people who owe more than $10,000 in medical debt

What action is being taken

Trump-appointed Judge Sean Jordan has blocked the CFPB's rule on medical debt in credit reports
Credit bureaus (Equifax, Experian, and TransUnion) are taking limited steps such as removing medical collections under $500
The CFPB is effectively in a state of paralysis after Trump reinstalled Russ Vought as acting director
Some states like Colorado and New York are implementing their own protections for consumers regarding medical debt

Why it matters

Medical debt represents more than half of all collection items on credit reports
People with medical debt often cut back on essentials, drain savings, borrow from others, or skip needed care
Medical debt is not considered a reliable indicator of someone's likelihood to pay other debts like mortgages
The ruling has significant racial and economic consequences, particularly affecting Black communities
Without this reform, millions remain exposed to credit damage from medical bills that often result from billing errors or unavoidable emergencies
Even those with health insurance can face financial ruin from a serious illness or emergency

What's next

No explicit next steps stated in the article

Read full article from source: The Washington Informer