Over the past year, several promising advancements were proposed for the credit industry, including the removal of medical debt from credit reports, adjustments to trigger leads (credit offers based on consumer inquiries), and the development of the FHFA Credit Score Initiative aimed at improving credit scoring fairness. However, these initiatives are currently on hold due to recent changes in administration and leadership. It remains crucial to monitor these developments, as they could significantly impact consumer credit health.
Medical Debt
At the beginning of January, the Consumer Financial Protection Bureau (CFPB) announced a ruling that all medical debt—whether paid or unpaid—will be removed from credit reports. This rule, titled “Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information,” amends Regulation V, which implements the Fair Credit Reporting Act (FCRA). The amendment eliminates the exception that previously allowed lenders to consider medical information when making lending decisions. This change is expected to significantly improve consumers’ credit scores and access to credit.
However, the ruling has faced strong opposition from the Consumer Data Industry Association (CDIA) and the Association of Credit and Collection Professionals (ACA), both of which raised concerns about its impact on credit reporting practices. In response, both organizations have filed lawsuits challenging the legality and implications of the ruling.
Due to these lawsuits and recent changes at the CFPB, the ruling is currently on hold. As of February 6, a court issued a 90-day stay on the ruling’s effective date, postponing it to June 15, 2025. Additionally, litigation has been delayed until May 12, 2025.
On February 11, Jonathan McKernan was nominated to serve as the new director of the CFPB, succeeding interim director Russ Vought. McKernan, who previously worked at the Federal Deposit Insurance Corporation (FDIC), has yet to indicate his stance on medical debt regulations. The implementation of the ruling is now delayed until May or June at the earliest, but the timeline could extend further due to pending litigation, which may take months to resolve.
Trigger Leads
As we enter 2025, the issue of trigger leads—data used by lenders to target consumers seeking loans—remains a significant concern. The Federal Communications Commission (FCC) recently issued the “one-to-one consent rule,” which builds on the 2023 Telephone Consumer Protection Act (TCPA). This ruling mandates that consumers provide individual consent before their information can be shared with lenders, aiming to reduce unsolicited calls and messages.
However, just hours before the rule was set to take effect on January 27, 2025, the 11th District Court postponed its implementation until January 26, 2026. This delay follows a legal challenge from the Insurance Marketing Coalition Limited (IMC) against the Federal Trade Commission (FTC), raising questions about the future of consumer protections in the lending industry.
Bill S.3502, the Homeowners Privacy Protection Act, also seeks to enhance consumer privacy by prohibiting credit reporting agencies from sharing borrower information unless the third party certifies the consumer’s consent. The Senate approved the bill unanimously in December, but the House failed to pass it. It will be reintroduced in the current session of the 119th Congress. However, it faces significant opposition from stakeholders like credit bureaus and independent trigger lead companies, who generate substantial revenue from selling trigger leads. This opposition could hinder the bill’s progress.
The issue of trigger leads has long been a source of frustration for consumers. If enacted, this bill would significantly improve consumer privacy and reduce unsolicited offers from lenders.
FHFA Credit Score Initiative
Finally, the FHFA Credit Score Initiative made headlines in January 2025 with the release of a new “Playbook,” which updates the timeline for its implementation. Initially set for full implementation by Q4 2025, the next phases are now classified as “TBD” (to be determined). This initiative aims to improve the fairness and accuracy of credit scoring, a critical development for consumers and the lending industry.
In Q3 2024, Fannie Mae and Freddie Mac released historical data for Vantage 04 for review. However, the release of historical data for FICO 10T is still pending, with no set date. The timeline for both the “Interim Phase” and the “Final Implementation Phase” is uncertain. During the Interim Phase, consumers will have nine credit scores: three FICO 10T scores, three Vantage 04 scores, and three Classic FICO scores. The Final Implementation Phase will phase out Classic Scores, leaving consumers with either three FICO 10T scores and three Vantage 04 scores, or two of each, depending on whether a tri-merge or bi-merge approach is adopted.
There is ongoing debate about the bi-merge option, which lenders generally oppose due to concerns about data completeness. The recent leadership change at the FHFA—Sandra Thompson’s departure and Bill Pulte’s nomination as her successor—raises further uncertainty about the timeline, which may now be pushed to 2026 or later.
Conclusion
Overall, the situation is fluid and volatile. While both the CFPB directive and the Trigger Leads Bill have the potential to greatly benefit consumers, we must take a “wait and see” approach for now, as the outcomes remain uncertain.