On September 24, the Governor of California approved
SB 1061 (the “Act”), which prohibits consumer credit reporting agencies from including medical debt in consumer credit reports. In addition, a consumer reporting agency may no longer furnish (i) bankruptcies older than 10 years, (ii) suits and judgements, paid tax liens, collection accounts, arrest records and “any other adverse information” older than seven years, and (iii) unlawful detainer actions.
Effective July 1, 2025, the Act mandates that any contract creating medical debt must include this specific term: “A holder of this medical debt contract is prohibited… from furnishing any information related to this debt to a consumer credit reporting agency…” and prohibits the furnishing of information related to the debt to a credit reporting agency, rendering the debt void if violated.
As previously covered by InfoBytes, the California Attorney General submitted a comment letter supporting the CFPB’s proposed rule (Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information (Regulation V)) to ban medical information in credit eligibility determinations. Besides the CFPB’s proposed rule, California will be the latest state to ban medical debts in credit reporting, joining the tri-state area of New Jersey (here), Connecticut (here), and New York (here), and other states.
