Rhode Island law on medical debt under fire by Trump administration ruling

Rhode Island has enacted strict laws preventing medical debt from appearing on credit reports and protecting residents from home liens and wage garnishments related to such debt. However, these state-level protections are facing a challenge from a new Trump administration ruling, which interprets the federal Fair Credit Reporting Act as overriding state laws about reporting medical debt to credit bureaus.

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Rhode Island’s Medical Debt Law

• Rhode Island’s law bars debt collectors from reporting medical debt to credit bureaus.

• It also prohibits the attachment of liens against primary residences and wage garnishment to collect medical debt judgments.

• The laws are scheduled to take effect on January 1, 2026, and define medical debt broadly to cover various healthcare-related liabilities.​

Trump Administration Ruling

• In late 2025, the Trump administration’s Consumer Financial Protection Bureau (CFPB) issued guidance that restricts states from enforcing laws banning the reporting of medical debt to credit bureaus.

• The CFPB reversed the prior administration’s policy, aligning with credit bureaus in legal challenges and arguing that federal law preempts stricter state rules.​

• This action threatens the enforceability of Rhode Island’s new protections.

State and Federal Tensions

• Existing Rhode Island protections are not immediately invalidated, but officials are concerned about further federal actions undermining state authority in this area.

• Some Rhode Island lawmakers have pledged to defend the law, emphasizing its importance in alleviating hardships for residents with medical debt.​

• The legal and practical fate of these protections will likely depend on federal court decisions and further guidance from the CFPB.

Implications for Residents

• Despite current protections, Rhode Island residents may see their medical debt reflected on credit reports if the Trump administration’s interpretation is upheld federally.

• State officials and advocates continue efforts to shield families from the economic harm associated with medical debt reporting.​

Rhode Island’s law remains in place for now, but its future is uncertain amid ongoing federal challenges driven by the Trump administration’s new stance on medical debt reporting.​

States are challenging the federal guidance by arguing that the Fair Credit Reporting Act (FCRA) does not broadly preempt state laws that restrict medical debt reporting, but only preempts certain narrow areas specifically addressed in the statute. They contend that states retain the authority to provide greater consumer protections under their own laws so long as there is no direct conflict with federal requirements.​

Key Legal Arguments

• Limited Preemption: States claim the FCRA’s preemption provisions are “narrow and targeted,” allowing them to enact laws that go beyond federal requirements and remove or restrict the reporting of medical debts, as long as those laws do not conflict directly with federal mandates.​

• Consumer Protection Authority: States assert that consumer protection is traditionally a state responsibility, and Congress did not intend to eliminate this power in the realm of credit reporting. They emphasize their interest in safeguarding residents from the economic harm caused by medical debt on credit reports.​

• Statutory Interpretation: The legal arguments focus on interpreting the FCRA text, especially its express preemption language at 15 U.S.C. § 1681t(b), which states believe does not bar them from enacting more stringent medical debt reporting restrictions so long as these do not conflict with federally permitted reporting.​

Court Debates

States in federal court are arguing that Congress’ intention was to allow states to continue innovating in the area of consumer protections and that blanket federal preemption was never intended to block all such state law initiatives on medical debt reporting.​