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A federal court has granted two individuals and two consumer advocacy groups the authority to defend a CFPB rule that would ban medical debt from appearing on consumer credit reports. The groups stepped in after the CFPB itself declined to continue defending the rule.
The case, filed in the U.S. District Court for the Eastern District of Texas, pitted consumer advocates against the Consumer Data Industry Association (CDIA) and the Cornerstone Credit Union League, which represents credit unions in Texas, Oklahoma and Arkansas. The two trade groups filed suit in January seeking to overturn the rule, finalized by the CFPB in January 2025, which would prevent credit bureaus from including medical debt in credit files and prohibit lenders from considering such debt in lending decisions.
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Consumer advocates argued the rule is essential. “We intervened in this case for this exact purpose: To defend the CFPB’s rule where the current CFPB would not,” Ariel Levinson-Waldman of Tzedek DC said.
Jennifer Wagner, senior attorney at the National Consumer Law Center, said the court’s decision “allows us to stand up for ordinary people left behind as the current Administration turns its back on consumers.”
The legal intervention followed the CFPB’s decision last week to stop defending its own rule, effectively siding with the trade associations challenging it.
The court’s approval allowed Harvey Coleman and David Deeds, along with Tzedek DC and the New Mexico Center on Law and Poverty, to continue the legal fight to preserve the rule, which they said would provide financial relief to millions.
As of June 2023, 15 million people had more than $49 billion in medical debt on their credit reports, despite recent voluntary removals by major credit bureaus.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
