The proposed bill, known as the "Medical Debt Act," aims to prohibit consumer reporting agencies from including medical debt information in consumer reports, with specific exceptions. It defines key terms such as "collection agency," "consumer," "consumer report," and "medical debt," establishing a clear framework for understanding the implications of medical debt on consumer credit. Notably, the bill stipulates that a consumer reporting agency cannot report adverse information related to medical debt unless it pertains to credit transactions exceeding the national conforming loan limit set by the Federal Housing Finance Authority.

Additionally, the bill mandates that collection agencies must inform consumers that medical debt information will not be reported unless it meets the aforementioned credit transaction criteria. It also allows individuals who believe their rights under this act have been violated to pursue civil action for actual damages or injunctive relief, with the possibility of recovering legal costs if they prevail. The bill emphasizes consumer protection in the context of medical debt, ensuring that individuals are not unfairly penalized in their credit reports for medical-related financial obligations.