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CFPB's Medical Debt Rule on Life Support

Michael Christians • May 7, 2025

In January, the Consumer Financial Protection Bureau (CFPB) issued a final rule to amend Regulation V concerning the use of medical information in connection with a determination of eligibility for credit. Under the rule, the instances in which a creditor can use medical information about a consumer are significantly limited. In addition, the rule generally prohibits consumer reporting agencies from providing a creditor with a report that contains medical debt information.

The rule was originally scheduled to take effect on March 17th. However, due to litigation filed in the US District Court for the Eastern District of Texas, the rule was stayed for 90 days until June 15th.

The CFPB now agrees that it exceeded its statutory authority when promulgating the rule. The parties have filed a joint motion asking the court to find that the rule is contrary to federal law. In light of this development, Judge Jordan has cancelled a scheduled hearing regarding the preliminary injunction and has asked all parties involved to fully brief the case for final resolution.

If this case follows in the footsteps of the credit card late fee rule, the CFPB's decision to not defend the rule in federal court is likely a death knell. Final resolution of the litigation is anticipated in advance of the June 15th expiration of the preliminary injunction.

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CFPB Withdraws Three Proposed Rules, Search for a Permanent Director Continues

By Michael Christians • May 15, 2025

On May 15, 2025, the Consumer Financial Protection Bureau (CFPB) published notice in the Federal Register that it is withdrawing three proposals introduced under the previous administration. First, the CFPB is withdrawing a proposed interpretive rule regarding applicability of the Electronic Fund Transfers Act to emerging payment mechanisms. Under the January 2025 proposal, a stablecoin, bitcoin, or other cryptocurrency transaction conducted in connection with a consumer asset account would be considered an electronic fund transfer subject to Regulation E’s requirements. Next, the CFPB is withdrawing a proposed rule that would have banned unfair provisions in credit contracts and specifically prohibited certain terms and conditions. Under the January 2025 proposal, a credit contract could not contain provisions such as a confession of judgment or waiver of exemption. In addition, a covered financial institution would not be able to enforce any term or condition that permits it to unilaterally amend a contract or restrain expression. Finally, the CFPB is withdrawing its proposed rule concerning harmful data broker practices. The proposal, issued in December 2024, would have treated data brokers as consumer reporting agencies, required a permissible purpose to obtain credit header data (e.g., name, address, date of birth, and social security number of a consumer) from a consumer reporting agency, and emphasized that marketing is not a permissible purpose to obtain a credit report under the FCRA. On May 9, 2025, the White House announced that President Trump is nominating Jonathan McKernan as Undersecretary of Treasury for Domestic Policy. It was later confirmed that as a result, Mr. McKernan’s previous nomination to head the CFBP is being withdrawn. Russell Vought, the Director of the White House Office of Management and Budget, is currently serving as acting director of the Bureau. He may continue to do so for an additional 210 days under the Federal Vacancies Reform Act. The White House has yet to announce a new nominee for CFPB director.

CFPB Withdraws 67 Previously Issued Guidance Documents

By Michael Christians • May 12, 2025

On May 12th, the Consumer Financial Protection Bureau (CFPB) published notice in the Federal Register that it is withdrawing dozens of interpretive rules, policy statements, and advisory opinions, dating as far back as 2011. The Bureau is withdrawing its guidance in light of the President’s directive to deregulate and streamline bureaucracy. In the future, the agency intends to only issue guidance when absolutely necessary, and only to reduce compliance burden. While the amount of guidance being withdrawn by the Bureau is too voluminous to fully detail here, below is a flavor of the agency's previous interpretations that no longer carry any precedential value: Policy Statements (8 withdrawn in total) Statement of Policy Regarding Prohibition on Abusive Acts or Practices – issued in April 2023, this statement provided an analytical framework of what constitutes an abusive act and/or practice Interpretive Rules (7 withdrawn in total) ECOA (Regulation B); Discrimination on the Bases of Sexual Orientation and Gender Identity – issued in March 2021, this interpretive rule expanded Regulation B’s prohibition against sex discrimination to include both sexual orientation and gender identity Advisory Opinions (13 withdrawn in total) Circulars (16 withdrawn in total) Reopening Deposit Accounts that Consumers Previously Closed – issued in May 20243, this circular indicated that it is likely an unfair act and/or practice to unilaterally reopen a deposit account that was previously closed by the consumer Bulletins (23 withdrawn in total) Prohibition of Unfair, Deceptive, or Abusive Acts or Practices in the Collection of Consumer Debts – issued in July 2013, this bulletin outlined several debt collection practices that the agency would consider to be unfair, deceptive, and/or abusive

Parties Reach Deal to Vacate Credit Card Late Fee Rule

By Michael Christians • April 15, 2025

On April 14 th , the Chamber of Commerce of the United States and the Consumer Financial Protection Bureau (CFPB) filed a joint motion for entry of consent judgment to resolve litigation in the US District Court for the Northern District of Texas regarding the CFPB’s credit card late fee rule. In March 2024, the CFPB issued a final rule that would have limited large card issuers (those with more than 1 million open and active credit card accounts) from charging a late fee that exceeds $8. Almost immediately, a lawsuit was brought by the US Chamber of Commerce in federal district court asserting that the rule violated the CARD Act. To resolve this litigation, the parties have jointly asked the court to vacate the rule. Once the terms of the settlement have been approved by the court, card issuers will return to the safe harbor fee amounts outlined in 12 CFR 1026.52.

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