A federal judge in Texas has struck down a Biden-era policy that aimed to erase medical debt from Americans’ credit reports, effectively halting a key financial relief measure. U.S. District Judge Sean Jordan ruled Friday that the Consumer Financial Protection Bureau (CFPB) overstepped its legal authority by enforcing the regulation, originally finalized in January 2025.
The rule was expected to wipe out nearly $50 billion in medical debt for around 15 million Americans. However, Judge Jordan stated that the Fair Credit Reporting Act does not authorize such sweeping changes, although it allows the CFPB to encourage creditors to consider alternative data.
Dan Smith, president of the Consumer Data Industry Association, praised the ruling. “This is the right outcome for protecting the integrity of the system,” he stated.
Vice President Kamala Harris, a vocal advocate for canceling medical debt, had backed the initiative during her 2024 campaign.
“No one should be denied economic opportunity because they got sick or experienced a medical emergency,” she said earlier this year. She emphasized expanding debt forgiveness and curbing aggressive debt collection practices.
The CFPB has been a frequent target under Trump’s leadership. His administration previously attempted to dismantle the agency before a federal court blocked those efforts in March. The ruling comes just days after Trump signed a major spending bill that included new Medicaid work requirements, threatening coverage for millions.
With the CFPB’s authority under fire, the battle over medical debt relief remains far from over.
