A Federal Judge in Texas on Friday reversed a rule of the Biden era that allowed medical debt to be wiped out of credit reports, according to court documents.
US district judge Sean Jordan, an appointment of President Trump in 2019, said the rule by the previous administration surpassed the authority of the Bureau of Consumer Financial Protection. The CFPB, an independent agency, completed the rule in January, as former president Biden would leave the White House.
The Biden Administration estimated that the action would remove nearly $ 50 billion in medical debt from the credit reports of approximately 15 million Americans.
In his latest decision, Jordan argued that the Fair Credit Report Act, which was amended in 2003, does not allow the CFPB to remove medical debt from reports. However, according to filing, the bureau may ‘allow’ or encourage creditors to use other categories of information.
Since returning to office later this month, Trump has tried to call out the panel of his Department of Government Efficiency (Doge), fraud and abuse within the federal government. The consumer agency found early in the president’s cross chairs and was subject to mass dismissal.
In March, a federal judge blocked the Trump administration to effectively dissolve CFPB.
While in office, former Vice President Harris was also in favor of eradicating medical debt and became part of her messages during the presidential election in 2024.
“No one should be denied economic opportunities because they became ill or experienced a medical emergency,” Harris said in January, adding: “We also reduced the burden of medical debt by increasing the roads to forgiveness and exploring the predator collection tactics.”
Dan Smith, head of the Consumer Data Industry Association, welcomed the decision and said that the rule was a move in the right direction.
“It is the right outcome to protect the integrity of the system,” Smith wrote in a statement, according to Reuters.
Jordan’s decision comes almost a week after Trump signed the massive expenses and tax bill that included the cutting of Medicaid. New job requirements included in the law can deprive millions of their coverage.