Officials Tweak Health Privacy Rules

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.