Minnesota Bans Medical Debt on Credit Reports

Source: Minnesota Legislature
Citation: 2024 Minn. Laws ch. 114, art. 3, §§ 77–81 (codified at Minn. Stat. ch. 332C)
Decided: May 21, 2024
Bottom line: Minnesota consumers have a state-law right to keep medical debt off their credit reports, though credit industry groups argue the FCRA preempts laws like it.

Background

The three national credit bureaus voluntarily stopped reporting paid medical collections and medical collections under $500 in 2022 and 2023. Larger unpaid medical collections can still appear. A federal CFPB rule that would have kept most medical debt off lender-facing reports was vacated by a Texas federal court in July 2025, so state laws have become the main source of broader protection.

Minnesota’s Debt Fairness Act was enacted as part of a larger 2024 commerce bill, S.F. 4097 (Session Law chapter 114). The Governor signed it on May 21, 2024. The medical debt provisions were codified as a new chapter 332C of the Minnesota Statutes, and the credit reporting ban took effect October 1, 2024. The Act also changed wage garnishment and bankruptcy exemption rules and barred automatically holding a spouse liable for a patient’s medical debt.

What the law does

Reporting ban. Section 332C.03 provides that “[a] collecting party is prohibited from reporting medical debt to a consumer reporting agency,” and that “[a] consumer reporting agency is prohibited from making a consumer report containing an item of information that the consumer reporting agency knows or should know concerns medical debt.” “Consumer report” and “consumer reporting agency” have their FCRA meanings. The ban expressly applies to licensed collection agencies and debt buyers.

What counts as medical debt. Medical debt is debt “incurred primarily for medically necessary health treatment or services.” It includes balances charged on or after October 1, 2024 to a credit card or loan offered specifically to pay for health care. It does not include general-purpose credit cards, home equity lines of credit, veterinary services, or dental services.

Collection rules. Section 332C.02 lists prohibited collection practices for anyone collecting medical debt, including a separate ban on reporting debt originally owed to a health care provider.

Remedies. The Attorney General may enforce the chapter. A collecting party that violates it is strictly liable to the debtor for actual damages, additional damages of up to $1,000 per violation (adjusted for inflation), and costs and reasonable attorney fees, with treble damages for willful and malicious violations. Collecting parties have a bona fide error defense and a defense for relying on incorrect information from a provider, insurer, or prior collector. The private remedy in § 332C.05 is written against “collecting part[ies],” so claims against a credit bureau for including medical debt would generally proceed through the Attorney General or other law.

Our take

Minnesota’s law is one of the broadest in the country because it reaches both furnishers and credit bureaus and does not depend on the size or age of the debt. The private remedy against collectors gives consumers practical leverage.

The open question is preemption. The FCRA preempts state laws on certain subjects, including the contents of credit reports covered by § 1681c and furnisher duties under § 1681s-2. The Consumer Data Industry Association told a Minnesota Senate committee in March 2024 that the reporting provisions of the standalone bill, S.F. 4065, were preempted by § 1681t(b)(1)(E) and (F). In October 2025 the CFPB issued an interpretive rule reading FCRA preemption broadly, and in August 2026 a federal court in Texas held that the FCRA preempts a narrower Texas medical debt reporting law. Neither ruling addresses Minnesota’s statute, which remains on the books. But consumers should expect collectors and bureaus to raise preemption as a defense.

What it means if your report is wrong

If you live in Minnesota and see a medical collection on your credit report, dispute it in writing with the credit bureau and send a copy of the dispute to the collector. Note when the debt was incurred and whether it was for medical care. Keep any letters from the collector. Even apart from state law, medical debts that are paid, under $500, covered by insurance, or not yours should not appear. A free case review can assess whether a reported medical debt supports a claim under state law or the FCRA, and there is no fee unless we win.

Sources

Primary

Commentary we reviewed

Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.