MONTPELIER – The Trump administration recently issued a new interpretive rule advising that the Federal Credit Reporting Act preempts state measures to remove medical debt from credit reports.
This guidance, issued by Consumer Financial Protection Bureau (CFPB) Acting Director Russell Vought, directly challenges laws passed in several states, including Vermont, that prohibit the reporting of medical debt on credit scores.
While the administration’s interpretation is not legally binding, it signals an intent to override state efforts to relieve medical debt for workers and families.
Treasurer Pieciak condemned the ruling, issuing the following statement:
“Earlier this year, Vermont passed a bipartisan plan to eliminate $100 million in medical debt for working Vermonters and to protect their credit scores from medical debt. I was proud to lead on this initiative, which will help tens of thousands of Vermonters move forward with their lives free from the burden of medical debt.
The Trump administration’s attempt to override this commonsense protection of Vermonters’ credit scores is a cruel and unnecessary attack on the health and financial well-being of working families.
While the administration’s interpretative rule does not overturn state law, its actions are clearly meant to undercut our efforts to ease the burden of medical debt. I intend to fight tooth and nail against this attempt to put medical debt back on people’s credit scores and fully expect all reporting entities to honor Vermont law and continue keeping medical debt off Vermonters’ credit reports.
At a time when health care costs are skyrocketing, and Republican cuts to Medicaid and the Affordable Care Act will make that worse, my office remains committed to protecting Vermonters from medical debt and its devastating impact on household budgets.”
The CFPB was established by President Obama in response to the 2008 financial crisis. It has since recovered over $21 billion in relief for American taxpayers. Since taking office, President Trump has suspended nearly all CFPB activities, halting investigations, enforcement actions, and oversight of financial institutions.
