Consumer credit: credit reports and reporting agencies; collection and reporting of medical debt information; regulate. Creates new act.

Section 5(1) was rewritten to shift the obligation from the person using a consumer report (e.g., a lender) to the consumer reporting agency itself. Under H-1, lenders simply could not use medical debt as a negative factor in credit decisions. Under H-3, consumer reporting agencies are prohibited from including any adverse medical debt information in reports at all, which is a much broader restriction that prevents the data from appearing on credit reports regardless of who uses them.

A new sentence was added to the definition of 'medical debt' stating it does not include debt charged to a credit card unless the card is issued under an open-end or closed-end credit plan offered solely for payment of a health care service or good. This carves out general-purpose credit card charges (e.g., paying a hospital bill on a Visa) from the bill's protections, limiting coverage to dedicated medical credit products.

Section 5(2) changed 'Subsection (1) does not apply' to 'This section does not apply,' a minor drafting clarification with no substantive effect.

Section 5 was rewritten. The old version prohibited consumer reporting agencies from including any adverse medical debt information in consumer reports. The new version instead prohibits any person who uses a consumer report for a credit transaction from using medical debt listed on that report as a negative factor in making a credit decision. This shifts the restriction from the reporter to the user of the report.

Section 12, which limited the amount of medical debt that could be reported (only the balance after discounts, rebates, and payments) and allowed disclaimers in consumer reports, was removed.

Section 11, which required collection agencies to include a specific statement about Michigan's medical debt reporting prohibition in their initial written communication to consumers, was removed.

Section 13, which provided a private right of action allowing individuals to sue for actual damages, injunctive relief, and attorney fees for violations of the act, was removed.

The enacting section that conditioned the bill's effectiveness on Senate Bill No. 95 also being enacted into law was removed, meaning this version would take effect on its own schedule if passed.

The bill's stated purpose now includes 'to prohibit the use of medical debt under certain circumstances,' broadening its scope beyond just reporting restrictions.

New Section 12(2) clarifies that consumer reporting agencies are allowed to include a disclaimer stating the report does not contain medical debt information, protecting them from liability for such disclaimers.

The definition of 'medical debt' now explicitly excludes debt charged to a credit card unless that card is issued under a plan offered solely for paying for health care services or goods. This means charges on general-purpose credit cards (like Visa or Mastercard) are no longer covered by the act.

New Section 12(1) requires that if a consumer reporting agency does include medical debt in a report, it must only show the amount owed after any discount, rebate, or payment made by the consumer or a third party on their behalf. This prevents inflated debt amounts from appearing on credit reports.

Section 5(2) changed from 'Subsection (1) does not apply' to 'This section does not apply,' meaning the exception for large credit transactions now applies to the entire section rather than just subsection (1).

A new enacting section requires that this act will not take effect unless Senate Bill No. 95 of the 103rd Legislature is also enacted into law, making this bill's effectiveness dependent on a companion bill passing.