Sen. Donna Bailey bill protects Mainers from unfair medical debt reporting after Texas federal judge repeals Biden-era rule

AUGUSTA — On Friday, July 11, 2025, a federal judge in Texas reversed a Biden-era rule that allowed medical debt to be removed from consumer credit reports. The rule, finalized in January and enforced by the Consumer Financial Protection Bureau (CFPB), protected approximately 15 million Americans from unfair medical debt disclosure.

The CFPB has reported that medical debt is not a reliable indicator of whether someone can repay a loan and, had it not been overturned, the Biden-era rule would have prevented lenders denying loans based on preexisting medical debt.

Sen. Donna Bailey, D-Saco, released the following statement after she championed legislation this year that enshrined provisions similar to the Biden-era rule in Maine law. “While I’m disappointed, I’m not surprised,” she said. “I knew the federal rule was under attack and feared the consequences its reversal would have on Maine families. That’s why I introduced LD 558; it protects Mainers in the absence of the federal rule. No one ever plans on going to the emergency room, less so taking on thousands of dollars in debt. This bill ensures that life’s unplanned emergencies don’t prohibit us from living full and healthy lives.”

Data released by Consumers for Affordable Health Care illustrates that nearly half of Maine families have taken on medical debt in the last two years, and one out of four Maine families with medical debt owe $5,000 or more. More than half of Mainers with medical debt report that their credit score has been negatively affected by the debt, and a lower credit score can negatively impact one’s ability to rent or obtain housing. The majority of those surveyed have indicated that their ability to obtain employment or loans has also been negatively impacted by their debt.

LD 558, “An Act to Strengthen Consumer Protections by Prohibiting the Report of Medical Debt on Consumer Reports,” prohibits a consumer reporting agency from listing medical debt on an individual’s consumer report in Maine. It also prohibits medical providers and debt collection agencies from reporting medical debt to any consumer reporting agency.

LD 558 was signed by Governor Mills on June 9 and will go into effect on September 24, 2025.

Sen. Bailey is serving her third term in the Maine Senate and her second as the Chair of the Health Coverage, Insurance, and Financial Services Committee.