CFBP Credit Score Rule Officially DEAD

Calculator and glasses on credit report document

A federal judge’s decision to strike down the Biden-era ban on medical debt in credit reports has thrown a wrench in progressive dreams—and finally restored some sanity, accountability, and respect for the rule of law in America’s financial system.

At a Glance

Biden’s CFPB rule banning medical debt from credit reports is officially dead after a federal court found the agency exceeded its authority
The move preserves the long-standing ability of lenders to consider medical debt when making credit decisions
This outcome protects the accuracy, fairness, and integrity of the credit reporting system—despite years of activist pressure
Consumers with medical debt will not see their scores artificially boosted, maintaining a level playing field for responsible borrowers

A Federal Judge Restores the Rule of Law to Credit Reporting

The Biden administration’s attempt to use regulatory fiat to rewrite the rules of American finance ended—predictably—in courtroom defeat. On May 1, 2025, the Consumer Financial Protection Bureau’s radical “Regulation V” was officially vacated after a federal judge found the agency had trampled the Fair Credit Reporting Act. The rule, concocted by the Biden CFPB, would have deleted billions of dollars in medical debt from Americans’ credit files and prohibited lenders from even considering medical information when evaluating loan applicants. The stated goal? To give a handout to people with unpaid or disputed medical bills, regardless of whether those debts reflected actual financial responsibility or not.

This scheme was never about protecting consumers—it was about gaming the system, shifting risk onto responsible borrowers, and eroding the basic principle that credit decisions should be based on accurate, comprehensive information. Lenders, credit unions, and the credit reporting industry pushed back hard, challenging the rule in court and arguing, correctly, that the CFPB overstepped its legal authority. The judge agreed, siding with the rule of law over bureaucratic activism. The result: the CFPB withdrew its rule, and the status quo was restored.

What the CFPB Tried to Do—and Why It Failed

The CFPB, helmed by Biden appointee Rohit Chopra, tried to justify its overreach by claiming that medical debt is a poor predictor of creditworthiness and that medical billing is riddled with errors. Never mind that the Fair Credit Reporting Act explicitly allows medical debt to appear on credit reports as long as privacy is protected. Never mind that the three major credit bureaus had already voluntarily removed some forms of paid medical debt. The ideological crusaders at the CFPB wanted to go further—stripping critical information from the credit system and undermining lenders’ ability to assess risk. Sound familiar? It’s the same pattern we saw throughout the Biden years: bureaucrats putting their thumb on the scale in the name of “equity,” while ignoring the real-world consequences for taxpayers and responsible Americans.

Industry groups, including the Consumer Data Industry Association and the Cornerstone Credit Union League, filed suit in the Eastern District of Texas. Their argument was simple and ironclad: the CFPB’s rule violated the plain language of the law. The court swiftly agreed, finding that the agency’s rule contradicted explicit statutory provisions and exceeded its authority. Faced with certain defeat, the CFPB capitulated, agreeing to vacate the rule. The system worked—this time.

What This Means for Consumers, Lenders, and the Country

The immediate impact of the judge’s decision is crystal clear: medical debt, when properly coded, will remain on credit reports. Lenders can continue to use this information to make sound credit decisions, protecting the integrity of the system and ensuring that credit scores actually reflect a borrower’s full financial picture. Consumers who were hoping for a regulatory freebie—a sudden jump in their credit score thanks to the erasure of legitimate debt—are out of luck. The playing field remains level for everyone, and responsible borrowers won’t have to subsidize risky lending practices born out of political activism.

Long-term, the court’s decision sets a critical precedent: regulatory agencies cannot simply ignore the law and legislate from the executive branch. The CFPB’s defeat will chill similar efforts in the future and send a message that Congress—not unelected bureaucrats—writes the rules. For the credit reporting industry, health care providers, and debt collectors, business continues as usual. For American families playing by the rules, the message is clear: your hard work and financial responsibility will not be undermined by government overreach or woke regulatory schemes.

The Broader Battle: Bureaucratic Overreach Versus Common Sense

This episode is just the latest example of the left’s relentless campaign to rewrite the rules of American life through executive action and regulatory diktat. Whether it’s medical debt, immigration, or the Second Amendment, the Biden era was defined by a contempt for constitutional limits and a willingness to sacrifice fairness in the name of political expediency. Now, with the courts stepping in and President Trump back in the White House, there is hope that common sense, accountability, and the rule of law will finally prevail over the chaos and confusion of the last administration. If only every bad idea could be so swiftly dispatched.