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.
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:
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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 medical debt or to obtain information about a consumer in relation to an attempt to collect medical debt from:
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Making a false 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 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.
