The Consumer Financial Protection Bureau will revoke its advisory opinion (PDF) on medical debt in a decision that will bring more regulatory clarity back to the industry after pushback from stakeholders.
On Friday, the CFPB announced its decision to revoke the opinion in response to the litigation.
The bureau also requested for the parties to stay the litigation until the opinion is revoked.
“Here, the bureau’s revocation of the advisory opinion will moot the issues raised by plaintiffs in their respective cases,” the bureau states. “Staying this matter to allow the bureau time to revoke the advisory opinion is appropriate to preserve the court’s and the parties’ time.”
ACA and Collection Bureau Services Inc., represented by Brownstein Hyatt Farber Schreck LLP, filed a lawsuit (PDF) in the U.S. District Court for the District of Columbia to halt the CFPB’s politically motivated advisory opinion concerning medical debt collections in November 2024.
ACA also outlined to supporters in Congress and the Trump administration Office of Management and Budget why the advisory opinion should be rescinded.
Additionally, ACA member Progressive Management Systems, represented by Sessions, Israel & Shartle LLC, filed a similar suit after the ACA suit last year.
While the court reviewed the cases, the CFPB delayed the effective date of the advisory opinion from Dec. 1, 2024, to Jan. 2, 2025.
The court also issued a decision on a preliminary injunction (PDF) that explained the force and effect of the advisory opinion.
The court stated that the advisory opinion does not effectively amend prior rules or laws. And as noted previously, multiple portions of the advisory opinion state that it is suggestive and not mandatory.
Last week, the White House also issued a memorandum directing agencies to review rules for legality under 10 recent watershed Supreme Court decisions, including Loper Bright Enterprises v. Raimondo in 2024, which overturned the Chevron doctrine. Accordingly, agencies must repeal any regulation that is not consonant with the “single, best meaning” of the statute authorizing it.
Additionally, in line with ACA’s advocacy, on Friday the CFPB announced that with respect to the regulation titled Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders, it will not prioritize enforcement or supervision actions for entities that do not satisfy future deadlines to submit registration information.
This policy applies, but is not limited to, the April 14, 2025, registration deadline for entities subject to 12 CFR 1092.206(a)(2) and July 14, 2025, registration deadline for entities subject to 12 CFR 1092.206(a)(3).
The bureau stated that it will continue to focus its enforcement and supervision activities on pressing threats to consumers. The bureau is further considering a notice of proposed rulemaking to rescind the regulation or narrow its scope.
ACA filed comments (PDF) outlining concerns with the registry and recently sent a joint letter with several other trade associations asking the Trump administration to rescind this rule.
What’s Next?
ACA and the parties challenging the medical debt advisory opinion have filed a joint motion to stay the litigation until the CFPB revokes the advisory opinion.
“The bureau’s decision to revoke the advisory opinion shows ACA and its members’ attention to actions that represent government overreach works,” said ACA CEO Scott Purcell. “The CFPB’s advisory opinion ultimately would have created new rules for medical account servicers and debt collectors beyond and in conflict with the FDCPA and Regulation F requirements when conducting medical bill collections. It was duplicative given that the bureau has already finalized a rule on medical debt collection prohibitions.”
Purcell added, “ACA’s members, including co-plaintiff Collection Bureau Services, Inc., a strong team of volunteer advocates, and partners at Brownstein Hyatt Farber Schreck LLP, worked tirelessly to pull back this misguided opinion. ACA’s 360-degree efforts in Congress, the courts, and with the administration left no stone unturned, which will benefit ACA members and their clients for years to come.”
