Aside from the Fair Credit Reporting Act—the federal law governing credit reporting practices—state laws can impose additional restrictions on credit reporting. For example, some state laws limit the type of information that may be furnished, require consumer notifications, or restrict the reporting period.

Furnishers of information to consumer reporting agencies (CRAs) should be aware of and comply with any applicable state credit reporting requirements.  Some state laws place restrictions on the reporting of a particular type of debt. For instance, California, Colorado, Minnesota, Texas and Washington are all states that place certain restrictions on credit reporting medical debt.

California prohibits hospitals and its assignees from credit reporting certain patients that lack coverage or have high medical costs for nonpayment at any time prior to 150 days after initial billing. Colorado law prohibits data furnishers from credit reporting medical debts that are only partially paid by insurance, unless the health care provider sends the consumer a written notice that includes particular information, as required by statute, to the person responsible for the debt.

In Minnesota, some health care providers signed a written agreement with the Minnesota attorney general covering issues associated with litigation practices, garnishments, collection agencies and billing the uninsured in relation to attempts to collect medical debt. Texas prohibits consumer reporting agencies from furnishing consumer reports that include debts owed for out-of-network medical services.

Washington requires data furnishers to refrain from furnishing information about medical accounts until at least 180 days after the original obligation was received by the licensee for collection or by assignment.  State laws may require furnishers to provide consumers with a notice of furnishing negative information disclosure prior to, or shortly after, reporting adverse information to a CRA.

For instance, California and Utah require creditors and debt collectors to send consumers a written notice prior to or within 30 days after furnishing negative information concerning the consumer.  Further, state laws restrict when information can be furnished to a CRA.  For instance, Colorado prohibits “[c]ommunicating credit information to a consumer reporting agency earlier than 30 days after the initial notice to the consumer has been mailed, unless the consumer’s last-known address is known to be invalid.

These requirements demonstrate the need for furnishers to review state-specific credit reporting requirements to ensure compliance with credit reporting expectations. For a more in-depth look at state credit reporting laws, ACA members can review ACA SearchPoint™ document #1255, State Credit Reporting Laws.