SENATE BILL NO. 451
A bill to prohibit consumer reporting agencies from including certain information related to medical debt in consumer reports; to establish standards for the collection of medical debt; and to provide remedies.
the people of the state of michigan enact:
Sec. 1. This act may be cited as the "medical debt act".
(a) "Collection agency" means that term as defined in section 901 of the occupational code, 1980 PA 299, MCL 339.901.
(b) "Consumer" means a resident of this state.
(c) "Consumer report" means a written, oral, or other communication or any information by a consumer reporting agency that relates to a consumer's creditworthiness, credit standing, credit capacity, debts, character, general reputation, personal characteristics, or mode of living, that is used or expected to be used or collected, in whole or in part, as a factor to establish a consumer's eligibility for credit or insurance for personal, family, or household purposes, an employment purpose, or any other purpose authorized under the fair credit reporting act, 15 USC 1681 to 1681x. Consumer report does not include any of the following:
(i) A report that contains information that relates only to a transaction between the consumer and the person making the report.
(ii) An authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device.
(iii) A report in which a person that has been requested by a third party to make a specific extension of credit directly or indirectly to a consumer conveys a decision with respect to the request, if the third party advises the consumer of the name and address of the person that the request was made to and the person makes any disclosure required under the fair credit reporting act, 15 USC 1681 to 1681x, to the consumer.
(d) "Consumer reporting agency" means a person that, for monetary fees, for dues, or on a cooperative nonprofit basis, regularly engages, in whole or in part, in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties. Consumer reporting agency does not include a business entity that provides only check verification or check guarantee services.
(e) "Creditworthiness" means an entry in a consumer's credit file that impacts the ability of a consumer to obtain and retain credit, employment, business or professional licenses, investment opportunities, or insurance, including, but not limited to, entries related to payment information, defaults, judgments, liens, bankruptcies, collections, records of arrest and indictments, and multiple-credit inquiries.
(f) "Employment purpose" means the purpose of evaluating a consumer for employment, promotion, reassignment, or retention as an employee.
(g) "File" means all of the information on the consumer that is recorded and retained by a consumer reporting agency, regardless of how the information is stored.
(h) "Health care good" includes, but is not limited to, a medical product, a medical device, any durable medical equipment, or a prescription drug.
(i) "Health care service" means any of the following:
(i) A service included in or incidental to the furnishing of any medical, behavioral, mental health, substance use disorder, nursing home, dental, or optometric care.
(ii) A service included in or incidental to hospitalization.
(iii) A service furnished to an individual for the purpose of preventing, alleviating, curing, or healing human physical illness or injury, or behavioral, mental health, or substance use disorder.
(j) "Medical debt" means a debt arising from a health care service or health care good. Medical debt does not include debt charged to a credit card unless the credit card is issued under an open-end or closed-end credit plan offered specifically for the payment of a health care service or health care good.
Sec. 5. (1) Except as otherwise provided in subsection (2), a consumer reporting agency shall not make a consumer report that contains an adverse item of information that the consumer reporting agency knows or should know concerns medical debt.
(2) Subsection (1) does not apply to a consumer report that will be used in connection with a credit transaction involving, or that may reasonably be expected to involve, a principal amount that exceeds the national conforming loan limit value for a 1-unit property, as determined annually by the Federal Housing Finance Authority.
Sec. 9. A collection agency, when attempting to collect debt that the collection agency knows is medical debt, or when attempting to obtain information about a consumer related to the collection of medical debt, shall not represent that the medical debt information will be included in a consumer report, unless the consumer report will be used in connection with a credit transaction that involves, or that may reasonably be expected to involve, a principal amount that exceeds the national conforming loan limit value for a 1-unit property, as determined annually by the Federal Housing Finance Authority.
Sec. 11. A collection agency shall include the following statement in the collection agency's initial written communication to a consumer: "Michigan law prohibits consumer reporting agencies from reporting medical debt information, unless the consumer report will be used in connection with a credit transaction that involves, or that may reasonably be expected to involve, a principal amount that exceeds the national conforming loan limit value for a 1-unit property, as determined annually by the Federal Housing Finance Authority.".
Sec. 13. (1) An individual who alleges a violation of this act may bring a civil action against the person that committed the alleged violation to recover 1 or more of the following:
(a) Actual damages.
(b) Injunctive relief.
(2) For an action under this section in which an individual prevails, the individual may recover the costs of the action, including reasonable attorney fees.