The federal agencies that regulate banks and financial institutions say lenders cannot use information about a consumer’s health as the basis for requiring the consumer to obtain credit insurance.[@@]
The agencies have included an example emphasizing that point in the interim final version of the Fair Credit Reporting Information Regulations.
The interim final rule implements Section 411 of the Fair and Accurate Credit Transactions Act of 2003, which puts tight limits on financial services companies’ ability to use personal medical information.
Financial services companies can use such information in connection with the business of insurance and annuities, and consumers can arrange for personal health information to go to insurers, lenders and potential employers.
But, even though lenders can use personal health information when making decisions about consumers’ eligibility for debt, “a creditor may not condition an extension of credit to the consumer on the consumer obtaining debt cancellation, debt suspension or credit insurance coverage based on the consumer’s physical, mental, or behavioral health condition or history,” officials write in a discussion of the interim final rule that appears today in the Federal Register.
A consumer who uses a wheelchair cannot be required to obtain credit insurance because that consumer happens to use a wheelchair, officials write.
The agencies that developed the interim final rule are the U.S. Treasury Department, the Federal Reserve System, the Federal Deposit Insurance Corp. and the National Credit Union Administration.
The agencies received dozens of comments from insurance groups, banking groups, consumer groups and other organizations on a draft of the rule published in April 2004.
The agencies are making the current version of the rule an interim rule because they want to give the public a chance to comment on the changes to the proposed version of the rule, officials write.
The officials note that consumer groups interested in commenting on some rules governing the sharing of health information between corporate affiliates may have to buy a copy of the model Privacy of Consumer Financial and Health Information Regulation developed by the National Association of Insurance Commissioners, Kansas City, Mo., from the NAIC.
Comments on the interim rule are due July 11.
A copy of the interim final rule is on the Web at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-11356.pdf