HB 6073

substitute for
House BILL NO. 6073
A bill to prohibit consumer reporting agencies from
including certain information related to medical debt in consumer reports; to
prohibit the use of medical debt under certain circumstances; to establish
standards for the collection of medical debt; to regulate certain reporting 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".
Sec. 3. As used in this
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 creditor"
means a person that provides a health care service or health care good and to
whom the consumer owes money for a health care service or health care good, or a
person that provided a health care service or health care good and to whom the
consumer previously owed money if the medical debt has been purchased by 1 or
more debt buyers. As used in this subdivision, "debt buyer" means a
person that purchases medical debt and brings an action to collect the medical
debt.
(k) "Medical debt"
means a debt owed by a consumer to a person whose
primary business is providing a health care service or health care good, or to the person's agent or assignee, for the provision
of a health care service or health care good. Medical debt includes, but is not limited to, medical bills that are not
past due or that have been paid. 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 solely for the payment of a health care service or health
care good.
(l)
"Medical debt collector" means a person that regularly collects or
attempts to collect, directly or indirectly, medical debt.
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) This section 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.
7. A medical creditor or a medical debt collector shall not communicate with or
report any information to a consumer reporting agency regarding a medical debt.
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.
12. (1) If a consumer reporting agency includes medical debt in a consumer
report, the consumer reporting agency shall include in the consumer report only
the amount of medical debt that is owed by the consumer after any discount,
rebate, and payment made by the consumer or a third party on behalf of the
consumer.
(2) This act does not prohibit a
consumer reporting agency from providing a disclaimer in a consumer report that
the consumer report does not contain information on medical debt.
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.
Enacting section 1. This act does not
take effect unless Senate Bill No. 95 of the 103rd Legislature is enacted into
law.