The Oregon Senate voted Wednesday to shield patients’ medical debt from credit reports.
Senate Bill 605, which passed the chamber 18-10, would prohibit medical providers — like hospitals and clinics — and debt collecting agencies from reporting unpaid bills to credit bureaus.
The bill now heads to the Oregon House.
Supporters say SB 605 would protect consumers from the financial repercussions of medical debt that, unlike other forms of personal debt, they have little choice but to shoulder.
“One big hospital bill can wreck your finances, even if you’re chipping away at the debt over time,” Sen. Wlnsvey Campos, D-Beaverton and the bill’s chief sponsor, said in a statement. “It should not stop you from qualifying for a car loan or getting a good interest rate on a mortgage.”
The bill was backed by the federal Consumer Financial Protection Bureau and would codify in state law a rule the CFPB finalized earlier this year. The federal watchdog agency’s rule proposes to ban credit agencies from including medical debts on consumers’ credit reports and prohibit lenders from considering medical information in assessing borrowers.
The federal rule was due to go into effect in March but has been delayed by challenges in federal courts. With the CFPB rule’s fate uncertain, SB 605 would provide state-level protections to consumers around credit reporting.
The Trump administration also has moved to slash the workforce at the CFPB and deprioritize its policies on medical debt.
SB 605 would also allow consumers to sue hospitals, clinics and debt collectors if they notify consumer reporting agencies about money owed for treatment, medical devices, medications and other health-related services. It also bans credit agencies from including medical debt in credit reports if they know it is related to health care.
The restrictions would apply to credit card charges used to pay for medical expenses.
Opponents of the bill include consumer reporting agencies and hospitals.
The Consumer Data Industry Association, which represents consumer reporting agencies, argue that removing medical debt from credit reports would increase risk to lenders and creditors. The organization also testified that the bill could result in less credit availability or higher interest rates for Oregonians.
It said that credit bureaus have been removing any paid-off medical debt from consumer credit reports since 2022.
Meanwhile, the Hospital Association of Oregon, which represents hospitals across the state, argued that the bill would add more administrative work for hospitals and increase their risk of lawsuits at a time when hospitals are already financially struggling.
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