CRAs Sue to Stop Maine Medical Debt Law

The Consumer Data Industry Association has sued the state of Maine to prevent new consumer laws from going into effect. As reported by WGME 13, the new laws are:

One of the laws prevents reporting agencies from reporting medical debt on a consumer report until the debt is 180 days old and instructs agencies to treat medical debt the same as a credit transaction if the consumer is paying the debt off regularly.

The other instructs reporting agencies to investigate if a person claims their debt is the result of economic abuse. This can include instances where access to money or bank accounts is obstructed, resources like food or shelter are withheld or an abuser creates fraudulent debt in a victim’s name, according to the law’s text. If abuse is found, the agencies have to remove any references to debt generated as a result of the abuse from the victim’s credit report.

The first one is fairly straightforward and the second one requires a little more subjective reasoning.

The CDIA’s position is:

The Industry Association argues that the Fair Credit Reporting Act preempts states from regulating credit reports and that the new state laws will create “other impracticalities and unreasonable burdens” on credit reporting agencies. They say the rules will make it difficult to assess credit risk, resulting in increased delinquencies and potentially increasing the price and decreasing the availability of consumer credit.

As for now, this law, if enacted, would not directly impact other states but their effect may encourage the CRAs to change nationwide procedures on how they handle medical debt and other debt.