OBL Testifies on Medical Debt Bill, HB 257, Before House Health Committee

09/17/25

This morning, the Ohio Bankers League (OBL) offered interested party testimony on House Bill 257, the Ohio Medical Debt Fairness Act, before the House Health Committee. The bill, sponsored by Representatives Jean Schmidt (R-Miami Township) and Michelle Grim (D-Toledo), seeks to provide new consumer protections around medical debt, including capping interest rates, restricting wage garnishments, and prohibiting medical debt from being reported to credit bureaus.

OBL Vice President and General Counsel Don Boyd emphasized that while the goals of the legislation are well-meaning, the bill as drafted raises concerns for Ohio's banking industry. Chief among these is the broad definition of medical debt, which could inadvertently sweep in traditional lending products such as credit cards or personal loans when used for medical expenses. This creates uncertainty for both banks and consumers, particularly around compliance and underwriting.

Boyd also noted that removing medical debt entirely from credit reports could have implications for ability-to-repay analyses, especially in mortgage lending. Federal law requires lenders to evaluate a borrower's total obligations when extending credit. If medical debt is invisible on credit reports, lenders may not have a complete picture of a borrower's financial situation.

Importantly, the committee is expected to consider an amendment at its next hearing that would address many of these concerns. Modeled after Maine law, the amendment would adopt a narrower definition of "medical debt" focused on obligations directly incurred with health care providers and goods, while excluding general-purpose credit products. OBL has expressed support for this approach, which balances consumer protections with the need for clarity in lending markets.

While the amendment would be a positive step forward, the future of HB 257 remains uncertain. Committee members continue to discuss the broader implications of the bill, and it is not yet clear whether it will advance in its current form.

OBL will continue to monitor the legislation closely and keep members informed of developments. Another committee hearing is expected next week, and we will provide updates as the process moves forward.

A copy of the testimony can be found HERE.

To watch the full testimony, the committee hearing can be viewed HERE.