A federal judge in Texas recently overturned rules enacted during the Biden administration that allowed for the removal of medical debt from credit reports, according to court filings.
US District Judge Sean Jordan, appointed by Trump in 2019, stated that the previous administration’s regulations exceeded the authority of the Consumer Financial Protection Bureau (CFPB). This independent agency had finalized its regulations in January as former President Biden was preparing to leave office.
The Biden administration had estimated that this lawsuit could lead to almost $50 billion in medical debt being removed from the credit reports of approximately 15 million Americans.
In his ruling, Judge Jordan contended that the Fair Credit Reporting Act, which was amended in 2003, does not permit the CFPB to erase medical debts from reports. He noted, however, that the agency might “allow” or encourage the use of other types of information.
Since taking office, the Trump administration has focused on eliminating what it termed waste and fraud within the federal government. The CFPB, in particular, was targeted early on and faced significant layoffs as a result.
A federal judge intervened in March to prevent the Trump administration from effectively dismantling the CFPB.
Former Vice President Harris, during her time in office, supported efforts to write off medical debts, making it a central theme of her campaign for the 2024 presidential election. In outlining her proposed economic agenda, she expressed commitment to enhancing Biden’s healthcare initiatives, including the complete elimination of medical debt.
“No one should face financial difficulties due to an illness or medical crisis,” Harris stated back in January.
Dan Smith, the head of the Consumer Data Industry Association, praised the judge’s decision, asserting that the repeal of these rules was a step in the right direction.
“This outcome helps safeguard the integrity of the system,” Smith declared in a statement.
This ruling by Judge Jordan comes just days after Trump signed a major spending and tax bill that included significant cuts to Medicaid, with newly introduced work requirements that could potentially leave millions without coverage.
