Consumer Reports Not Include Medical Debt Information

Section 1 of the bill defines "medical debt" as any obligation or alleged obligation of a consumer to pay any amount whatsoever arising from the receipt of health-care goods or services. debt arising from health-care services or health-care goods, including products, devices, durable medical equipment, and prescription medications.

Current law prohibits a consumer reporting agency from making any consumer report containing any of certain items of information. However, this prohibition does not apply to:

• A credit transaction involving, or that may reasonably be expected to involve, a principal amount of $150,000 or more; or
• The underwriting of life insurance involving, or that may reasonably be expected to involve, a face amount of $150,000 or more.

Section 2 eliminates both of these exceptions to the prohibition and substitutes a new exception, which applies to a credit transaction involving, or that may reasonably be expected to involve, a principal amount that exceeds the national conforming loan limit value determined annually by the federal housing finance agency. Section 2 also prohibits a consumer reporting agency from making any consumer report containing any information concerning medical debt.Section 3 prohibits a debt collector or collection agency, when attempting to collect debt that the debt collector or collection agency knows or should know is medical debt or to obtain information about a consumer in relation to an attempt to collect medical debt from

• Making making a false, deceptive, or misleading representation that the medical debt will be included in a consumer report or factored into a consumer's credit score ; or
• Failing to disclose that the medical debt will not be included in a consumer report and therefore not factored into a consumer's credit score.

The bill makes exceptions to these prohibitions when unless the information is used in connection with a credit transaction involving, or that may reasonably be expected to involve, a principal amount that exceeds the national conforming loan limit value determined annually by the federal housing finance agency.Section 4 requires a debt collector or collection agency, in its initial written communication to a consumer, to include a statement regarding the new prohibitions.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)