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 for high-value credit transactions. It establishes definitions for key terms such as "collection agency," "consumer," "consumer report," and "medical debt," clarifying the scope of the legislation. 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, the bill imposes requirements on collection agencies regarding the communication of medical debt information. Collection agencies are prohibited from suggesting that medical debt will be reported unless it meets the aforementioned credit transaction criteria. They must also include a specific statement in their initial written communication to consumers, informing them of the legal protections against the reporting of medical debt. Individuals who believe their rights under this act have been violated can pursue civil action for damages or injunctive relief, with the possibility of recovering legal costs if they prevail.