Maryland bill would bar medical debt from consumer reports as advocates push for state action after federal rollback

Delegate Julie Palakovich Carr told the Economic Matters Committee HB1020 would bar reporting of medical‑debt information on consumer credit reports, citing federal rule changes and a need for state action to protect consumers.

Sponsor case: The bill would prohibit inclusion of medical debt on consumer reports. Palakovich Carr said the Consumer Financial Protection Bureau had issued a rule to remove medical debt on consumer reports but implementation is paused; in the sponsor’s view, states should act rather than rely on uncertain federal protection. "One in five Americans have some amount of medical debt... this bill will make sure that these kinds of adverse reporting is not found on credit reports," she said.

Supporters: Advocates including Economic Action Maryland, Maryland Legal Aid, AARP Maryland, and federally qualified health centers testified in favor. Marceline White (Economic Action) and William Steinwiddle (Maryland Legal Aid) cited studies showing medical debt often results from involuntary events and that small amounts (median reported under $1,000 in prior analyses) can lead to lawsuits, bankruptcies and wage garnishments. AARP said older adults are disproportionately affected and removing medical debt from reports would ease obstacles to housing, credit and other needs.

Opponents and industry concerns: The Consumer Data Industry Association (CDIA) argued the Fair Credit Reporting Act (FCRA) governs what may appear on consumer reports and said the bill appears preempted by federal law; CDIA also noted voluntary reforms by the major credit reporting agencies that already removed a large share of medical debt from reports. PRA Group, representing receivables purchasers, raised concerns about the bill’s definition of medical debt and urged alignment with the federal rule to avoid inconsistent definitions.

Sponsor response and legal note: Delegate Palakovich Carr submitted an Attorney General opinion in the bill materials asserting federal law does not preempt state action to limit medical debt reporting; she also pointed to an interpretive CFPB rule indicating states may act to restrict medical debt on consumer reports. The sponsor said the bill does not prohibit collection; it only addresses what appears on credit reports.

Ending: Supporters argued the bill protects vulnerable Marylanders from credit harms caused by medical bills; industry groups urged attention to federal preemption and consistent definitions and asked for technical amendments. The committee heard extensive testimony but no formal vote is recorded in the provided transcript.