Oregon Enacts New Laws on Medical Debt Credit Reporting, Auto Loan Disclosures and Hidden Online Fees | Sheppard Mullin Richter & Hampton LLP

On September 16, Oregon Governor Tina Kotek announced three consumer protection laws: Senate Bill 605 on medical-debt credit reporting, House Bill 3178 on auto sales and financing disclosures, and Senate Bill 430 on online pricing transparency. All three bills take effect in 2026.

SB 605 prohibits reporting the amount or existence of medical debt to consumer reporting agencies and treats violations as an unlawful practice under the Oregon Unlawful Trade Practices Act. The law also bars agencies from including items they know or reasonably should know are medical debt in consumer reports.

Specifically, SB 605:

• Bans furnishing and requires suppression. A person may not provide medical-debt information to a consumer reporting agency, and agencies must exclude medical-debt items from consumer reports.
• Defines medical debt broadly. Covered obligations include treatment, devices, supplies, medications, and patient care, and include balances on credit cards issued solely for medical expenses. Elective cosmetic procedures are outside the scope.
• Preserves consumer protections on interest and responsibility. Patients who qualify for hospital financial assistance pay zero interest, and other medical-debt interest remains narrowly limited. Collectors may not pursue non-responsible family members.
• Provides Unlawful Trade Practices Act remedies. Courts may declare improperly reported medical debts void and uncollectible.

HB 3178 requires a plain-language retail-installment disclosure in Oregon’s six most-spoken languages, shortens the lender-acceptance window to ten calendar days after the buyer takes possession, imposes a two-day notice requirement if funding fails, limits permissible charges if a deal is voided, and restricts selling or paying off trade-ins before final funding. Finally, SB 430 requires online sellers to present total prices that include mandatory fees, with exceptions such as taxes, reasonable shipping, and certain distance-based service fees disclosed up front.

Putting It Into Practice: State-level medical debt protections are continuing to accelerate (previously discussed here and here). The state updates follow the recent vacatur of the CFPB’s Medical Debt Rule aimed to limit the role of medical debt in credit underwriting (previously discussed here). At the same time, state legislatures are continuing to broaden consumer-protection requirements in response to federal pullback. Companies with multistate operations should expect continued activity, monitor pending bills and rulemakings, and begin aligning policies, disclosures, and data practices now to meet staggered effective dates.