CFPB Agrees To Delay New Medical Debt Collection Rules

As we have previously reported, 2 lawsuits have been filed in federal court in Washington D.C. challenging the CFPB’s Advisory Opinion issued in October. That Order creates new and substantive requirements for medical debt collectors. The new rules, which effectively prohibit collecting medical debt, were scheduled to be effective December 3.

In both cases, motions were filed seeking a preliminary injunction and temporary restraining order to prevent the rules from going into effect.  

The Sessions Firm, representing a small, employee-owned medical debt collector in California, argued with the ACA for the motions on November 20.

The medical debt collector and the ACA suggested to the Court that a short-term solution could be for the CFPB to agree to delay the effective date to give the parties and the Court more time to consider the sufficiency of the legal foundation of the CFPB’s Advisory Opinion. Today, the CFPB agreed to the delay and will set a new effective date for January 2, 2025.

Importantly, as part of the Bureau’s filing, the CFPB informed the Court: “Defendants’ [the CFPB] position is the Advisory Opinion does not itself create any binding legal obligations or create new obligations that Plaintiffs or their members will need to comply with as of the applicable date.”

This is not the end of the war, as the CFPB continues to oppose any limitation on the new rules arguing, inexplicably, that the Advisory Opinion did not create any new obligations.

Sessions will continue to press forward with the case to make this one month delay permanent.

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