The federal agencies that regulate banks say lenders can use personal health information if a consumer is relying on disability insurance benefits or other “medically related income” to get credit[@@]
Lenders and other suppliers of credit also may be able to use health-related information, with the consumer’s permission, to assess applications for financing of medical procedures; to determine whether consumers are eligible for special loan programs or payment forbearance programs offered to consumers with health problems; or to assess whether consumers are healthy enough to have the legal capacity to complete certain transactions, according to the preamble to the final version of the Fair Credit Reporting Information Regulations.
The final rules implement 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.
The agencies that developed the 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 published the final rules today in the Federal Register, and the same agencies published interim final rules in June.
The interim rule and the changes included in the new final rule are both scheduled to take effect April 1, 2006, the agencies say.
The agencies already have established that the FACT Act lets insurers and annuity issuers use personal medical information in the course of normal operations.
The agencies note that they received only 48 letters commenting on the interim final rules.
The authors of the preamble explaining the final rules say they received a comment letter wondering whether lenders could ask about medical matters only if the lenders were considering the possibility of financing medical procedures.
A credit application “should not specifically request the consumer to disclose such medically related income,” agency officials write. “Of course, the application can ask the consumer to list all sources of income that the consumer would like the creditor to consider.”
If a consumer lists medically related income, such as disability insurance benefits or workers’ compensation benefits, on an application, the creditor may use that information, the officials write.
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
A copy of the final rule is on the Web at http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/pdf/05-22830.pdf