Consumer Reports Not Include Medical Debt Information

The act prohibits debt collectors and collection agencies, when attempting to collect debt that they know or should know is medical debt or to obtain information about a consumer in relation to an attempt to collect medical debt, from 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 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. "Medical debt" is debt arising from health-care services or health-care goods, including products, devices, durable medical equipment, and prescription drugs.

The act also prohibits a consumer reporting agency from making any consumer report containing any adverse information that the agency knows or should know concerns medical debt. The department of revenue is required to study the effect of prohibiting medical debt reporting and, on or before January 1, 2028, report its conclusions from the study to certain legislative committees. In its initial written communication to a consumer, a debt collector or collection agency is required to include a statement regarding the new prohibitions.

Current law prohibits a consumer reporting agency from reporting certain types of information. However, the 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.

The act 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 for a one-unit property as determined annually by the federal housing finance agency.

APPROVED by Governor June 5, 2023

EFFECTIVE August 7, 2023

NOTE: This act was passed without a safety clause and takes effect 90 days after sine die.
(Note: This summary applies to this bill as enacted.)