Statement: Attorney General Rob Bonta, Senator Limon unveil bill to tackle medical debt

Sacramento, Calif – California Attorney General Rob Bont, State Sen. Monique Limon, and a coalition of consumer advocacy organizations unveiled new legislation Monday that will prohibit the appearance of all medical debt on consumer credit reports. The legislation is similar to legislation passed in New York and Colorado, and a federal rulemaking underway at the Consumer Financial Protection Bureau (CFPB).

In 2022, the CFPB issued a report that exposed how widespread the problem of medical debt is for American families. More than $88 billion in medical bills have been included in credit reports. These debts, even when paid, can remain on credit reports for seven years. Consequently,  affected individuals are less likely to get loans, buy a home, or in some cases, to even get a job. The report also showed that medical billing data on a credit report is “less predictive of future repayment than reporting on traditional credit obligations.”

In addition to Attorney General Bonta, this legislation is sponsored by CALPIRG, the National Consumer Law Center, the California Low-Income Consumer Coalition, the Consumer Federation of California, Health Access California, and the California Nurses Association. 

In response to the bill introduction, Jenn Engstrom, State Director for CALPIRG, issued the following statement:

“We’ve known for years that medical debt doesn’t predict credit defaults, nor does it accurately predict a person’s desire and willingness to pay off loans. We’re hopeful that the legislation introduced by Sen. Limon and sponsored by Attorney General Bonta will help create a fair credit system that doesn’t penalize people for life events they can’t control like getting sick.”