The proposed bill, known as the "medical debt act," aims to prohibit consumer reporting agencies from including information related to medical debt in consumer reports, with specific exceptions. It defines key terms such as "collection agency," "consumer," "consumer report," and "medical debt," establishing a framework for how medical debt is treated in credit reporting. Notably, the bill stipulates that a consumer reporting agency cannot report adverse information concerning medical debt unless it pertains to a credit transaction exceeding the national conforming loan limit set by the Federal Housing Finance Authority. Additionally, collection agencies are restricted from implying that medical debt will be reported unless it meets the same financial threshold.

Furthermore, the bill mandates that collection agencies include a specific statement in their initial communications with consumers, informing them of the legal protections against the reporting of medical debt. Individuals who believe their rights under this act have been violated are granted the ability to pursue civil action for actual damages or injunctive relief, and they may recover legal costs if they prevail in their claims. This legislation seeks to provide greater protections for consumers regarding medical debt and its impact on their creditworthiness.