California recently enacted a new law broadly prohibiting the use of medical debts in consumer credit reports. The law, SB-1061, is part of a growing national movement to ban consumer reporting agencies (CRAs) from reporting on medical debt and creditors from using consumers’ medical debts in credit, employment or housing decisions. The policy reason for the ban is that most medical debts arise from unexpected health emergencies rather than from intentional financial decisions.

With its new law, California joins a dozen other states that have restricted the use of medical debt in credit decisions. California’s law goes into effect as the federal government’s recently proposed regulations imposing similar restrictions nationwide remain mere proposals.