Golden State Today

California Attorney General Rob Bonta has expressed support for the Consumer Financial Protection Bureau's (CFPB) Proposed Rule to prohibit the reporting of medical debt on credit reports. This rule aims to provide relief for millions of Americans burdened by unexpected or inaccurate medical bills. Earlier this year, Bonta, alongside Senator Monique Limón (D-Santa Barbara) and various consumer advocacy organizations, introduced SB 1061, legislation designed to protect consumers from having their credit adversely affected by medical debt.

“When someone is scared and in pain, the last thing they should think about is whether seeking care will take away their ability to buy a house or land a job. Unfortunately, this is the reality for many people today,” said Attorney General Bonta. “There is no need for medical debt to appear on credit reports as it is not a good predictor of repayment, and it pushes more and more people into a harmful debt cycle that is very difficult to escape. I thank the Consumer Financial Protection Bureau for their nationwide leadership on this issue and for proposing a rule that sets a floor for consumer protections and allows states to enact stronger protections for their residents.”

Credit reports are intended to assess an individual's ability to repay future debt. However, medical debt—often unforeseen—is not considered a reliable indicator of financial risk yet can prevent consumers from obtaining loans, renting apartments, or securing employment. Statistics show that 52% of adults reported delaying or postponing care due to cost in the past year; 36% had medical debt; and 27% faced issues paying their medical bills.

In his letter, Bonta emphasizes that medical debt affects consumers regardless of payment method and suggests expanding the definition of medical debt to include all forms of payments made to healthcare providers. He notes that individuals might incur different types of debt when settling their bills, such as using credit cards. Currently, 25% of Californians pay their medical or dental bills with credit cards—a figure up from 19% just one year ago—and this percentage is higher among historically marginalized groups.

The letter also addresses CFPB’s concerns regarding the identification of medical debt owed to third-party lenders like credit card companies. Bonta argues that these lenders already have systems in place capable of categorizing types of debt.

Attorney General Bonta remains committed to safeguarding Californians' financial health, particularly vulnerable populations. In April, he supported CFPB's proposed overdraft fee rule aimed at closing regulatory loopholes allowing banks to charge overdraft fees without adequately disclosing basic credit terms. In February, he issued letters warning small banks and credit unions that certain fees may violate California’s Unfair Competition Law and the federal Consumer Financial Protection Act.

A copy of Attorney General Bonta's letter can be found here.

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