On April 30, the CFPB and two industry associations filed a joint motion with the U.S. District Court for the Eastern District of Texas requesting that the court vacate the Bureau’s medical debt rule. The associations, representing credit unions, consumer reporting agencies (CRAs) and furnishers of credit information, challenged the CFPB’s final rule that restricted the reporting and use of medical debt information by CRAs and creditors (final rule covered by InfoBytes here). The plaintiffs argued the final rule violated the FCRA by prohibiting actions that the statute expressly permits, such as the reporting of coded medical debt information and allowing creditors to consider such information in credit decisions.
The parties requested that the court declare the medical debt rule unlawful and vacate it, asserting that the rule exceeded the Bureau’s statutory authority and contravened the APA. In February, a legal aid group and two individuals with medical debt filed to intervene in the case. As a result of the joint motion, the court ordered all parties to submit supplemental briefs by May 7 addressing how the CFPB’s change in position affects the request to intervene.
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