Bill Summary
The Medical Debt Relief Act of 2019 is a proposed bill that seeks to amend the Fair Credit Reporting Act and the Fair Debt Collection Practices Act in order to address issues related to medical debt and credit reporting. The bill would require a 1-year waiting period before medical debt can be reported on a consumer's credit report, as well as removing paid-off and settled medical debts from credit reports. It also establishes a timeline for verification of medical debt and aims to improve the efficiency of credit markets by providing more accurate and up-to-date information. This bill would ultimately provide relief for consumers who have medical debt and protect them from potential negative impacts on their credit.
Possible Impacts
1. People with medical debt may have their credit scores negatively impacted for a shorter period of time, as medical debt will not be reported until after a 1-year waiting period.
2. Consumers may have more time to resolve and pay off their medical debt before it is reported to a credit reporting agency, allowing them to avoid potential credit damage.
3. Medical debt collectors may have more restrictions on when and how they can communicate with or report information to credit reporting agencies, potentially leading to a decrease in aggressive debt collection practices.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1581 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 1581
To amend the Fair Credit Reporting Act to institute a 1-year waiting
period before medical debt will be reported on a consumer's credit
report and to remove paid-off and settled medical debts from credit
reports that have been fully paid or settled, to amend the Fair Debt
Collection Practices Act to provide a timetable for verification of
medical debt and to increase the efficiency of credit markets with more
perfect information, and for other purposes.
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IN THE SENATE OF THE UNITED STATES
May 21, 2019
Mr. Merkley (for himself, Mr. Blumenthal, Ms. Warren, Mr. Menendez, and
Mr. Durbin) introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Fair Credit Reporting Act to institute a 1-year waiting
period before medical debt will be reported on a consumer's credit
report and to remove paid-off and settled medical debts from credit
reports that have been fully paid or settled, to amend the Fair Debt
Collection Practices Act to provide a timetable for verification of
medical debt and to increase the efficiency of credit markets with more
perfect information, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medical Debt Relief Act of 2019''.
SEC. 2. AMENDMENTS TO FAIR CREDIT REPORTING ACT.
(a) Medical Debt Defined.--Section 603 of the Fair Credit Reporting
Act (15 U.S.C. 1681a) is amended by adding at the end the following:
``(bb) Medical Debt.--The term `medical debt' means a debt
described in section 604(g)(1)(C).''.
(b) Exclusion for Paid or Settled Medical Debt.--Section 605(a) of
the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is amended by adding
at the end the following:
``(9) Any information relating to a medical debt if the date on
which the debt was placed for collection, charged to profit or loss, or
subjected to any similar action antedates the report by less than 1
year.
``(10) Any information relating to a fully paid or settled medical
debt that had been characterized as delinquent, charged off, or in
collection which, from the date of payment or settlement, antedates the
report by more than 45 days.''.
SEC. 3. AMENDMENTS TO THE FAIR DEBT COLLECTION PRACTICES ACT.
(a) In General.--Section 809 of the Fair Debt Collection Practices
Act (15 U.S.C. 1692g) is amended by adding at the end the following:
``(f) Additional Notice Requirements for Medical Debt.--
``(1) Definitions.--In this subsection:
``(A) Consumer reporting agency.--The term
`consumer reporting agency' has the meaning given the
term in section 603(f) of the Fair Credit Reporting Act
(15 U.S.C. 1681a(f)).
``(B) Medical debt.--The term `medical debt' means
a debt arising from the receipt of medical services,
products, or devices.
``(2) Notice about credit reporting.--Before furnishing
information regarding a medical debt of a consumer to a
consumer reporting agency, the person furnishing the
information shall send a statement to the consumer that
includes the following:
``(A) A notification that the medical debt may not
be reported to a consumer reporting agency until the
end of the 1-year period beginning on the date on which
the person sends the statement.
``(B) The specific date that is the end of the 1-
year period beginning on the date on which the person
sends the statement.
``(C) A notification that, if the debt is settled
or paid by the consumer or an insurance company during
the 1-year period beginning on the date on which the
person sends the statement--
``(i) the debt may not be reported to a
consumer reporting agency; and
``(ii) the consumer may, during that 1-year
period--
``(I) communicate with an insurance
company to determine coverage for the
debt; or
``(II) apply for financial
assistance.
``(3) No reporting during 1-year period.--
``(A) In general.--During the 1-year period
described in paragraph (2), no person may communicate
with, or report any information to, any consumer
reporting agency regarding a debt described in that
paragraph.
``(B) Rule of construction.--Nothing in
subparagraph (A) may be construed to affect when a debt
collector may engage in activities to collect or
attempt to collect any debt owed or due or asserted to
be owed.
``(4) Reporting after the 1-year period.--Nothing in this
subsection shall prohibit a person from communicating with, or
reporting any information to, a consumer reporting agency
regarding a medical debt of a consumer after the end of the 1-
year period described in paragraph (2) with respect to the
debt.''.
SEC. 4. EFFECTIVE DATE.
The amendments made by this Act shall take effect on the date that
is 180 days after the date of enactment of this Act.
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