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Tuesday,

November 22, 2005

Part II

Department of the
Treasury
Office of the Comptroller of the
Currency
12 CFR Part 41
Office of Thrift Supervision
12 CFR Part 571

Federal Reserve System


12 CFR Parts 222 and 232

Federal Deposit
Insurance Corporation
12 CFR Part 334

National Credit Union


Administration
12 CFR Part 717
Fair Credit Reporting Medical Information
Regulations; Final Rule

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70664 Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations

DEPARTMENT OF THE TREASURY exceptions to permit affiliates to share or use medical information in
medical information with each other connection with credit eligibility
Office of the Comptroller of the without becoming consumer reporting determinations and the ability of
Currency agencies. The final rules are consumer reporting agencies to disclose
substantially similar to the rules medical information, and restricts the
12 CFR Part 41 adopted by the Agencies on an interim sharing of medical information and
[Docket No. 05–18]
final basis in June 2005. other medically related information
DATES: The effective date of the interim with affiliates. The FACT Act also
RIN 1557–AC85 final rule published on June 10, 2005 revised the definition of ‘‘medical
(70 FR 33958) is delayed until April 1, information’’ in section 603(i) of the
FEDERAL RESERVE SYSTEM 2006. The amendments in this final rule FCRA to mean information or data,
are effective April 1, 2006. whether oral or recorded, in any form or
12 CFR Parts 222 and 232 medium, created by or derived from a
FOR FURTHER INFORMATION CONTACT:
[Regulation V and FF; Docket No. R–1188] OCC: Amy Friend, Assistant Chief health care provider or the consumer,
Counsel, (202) 874–5200; Michael that relates to the past, present, or future
FEDERAL DEPOSIT INSURANCE Bylsma, Director, or Stephen Van Meter, physical, mental, or behavioral health or
CORPORATION Assistant Director, Community and condition of an individual, the
Consumer Law, (202) 874–5750; or provision of health care to an
12 CFR Part 334 Patrick T. Tierney, Senior Attorney, individual, or the payment for the
Legislative and Regulatory Activities provision of health care to an
RIN 3064–AC81
Division, (202) 874–5090, Office of the individual. The term ‘‘medical
DEPARTMENT OF THE TREASURY Comptroller of the Currency, 250 E information’’ does not include the age or
Street, SW., Washington, DC 20219. gender of a consumer, demographic
Office of Thrift Supervision Board: David A. Stein, Counsel; information about the consumer,
Minh-Duc T. Le, Ky Tran-Trong, or including a consumer’s residence
12 CFR Part 571 Krista P. DeLargy, Senior Attorneys, address or e-mail address, or any other
Division of Consumer and Community information about a consumer that does
[No. 2005–49] Affairs, (202) 452–3667 or (202) 452– not relate to the physical, mental, or
RIN 1550–AB88 2412; or Andrew Miller, Counsel, Legal behavioral health or condition of a
Division, (202) 452–3428, Board of consumer, including the existence or
NATIONAL CREDIT UNION Governors of the Federal Reserve value of any insurance policy.
ADMINISTRATION System, 20th and C Streets, NW., Section 604(g)(1) of the FCRA restricts
Washington, DC 20551. the circumstances under which
12 CFR Part 717 FDIC: Richard M. Schwartz, Counsel, consumer reporting agencies may
Legal Division, (202) 898–7424; David furnish consumer reports that contain
Fair Credit Reporting Medical Lafleur, Policy Analyst, (202) 898–6569, medical information about consumers.
Information Regulations or Patricia Cashman, Senior Policy This provision is not the subject of the
Analyst, Division of Supervision and Agencies’ rulemaking.
AGENCIES: Office of the Comptroller of Consumer Protection, (202) 898–6534, Section 604(g)(2) of the FCRA
the Currency, Treasury (OCC); Board of Federal Deposit Insurance Corporation, prohibits creditors from either obtaining
Governors of the Federal Reserve 550 17th Street, NW., Washington, DC or using medical information pertaining
System (Board); Federal Deposit 20429. to a consumer in connection with any
Insurance Corporation (FDIC); Office of OTS: Glenn Gimble, Senior Project determination of the consumer’s
Thrift Supervision, Treasury (OTS); Manager, Operation Risk, (202) 906– eligibility, or continued eligibility, for
National Credit Union Administration 7158; Richard Bennett, Counsel, (202) credit. The statute contains no
(NCUA). 906–7409, Office of Thrift Supervision, prohibition, however, on creditors
ACTION: Final rules. 1700 G Street, NW., Washington, DC obtaining or using medical information
20552. for other purposes that are not in
SUMMARY: The OCC, Board, FDIC, OTS, NCUA: Regina M. Metz, Staff connection with a determination of the
and NCUA (Agencies) are publishing Attorney, Office of General Counsel, consumer’s eligibility, or continued
final rules to implement section 411 of (703) 518–6540, National Credit Union eligibility, for credit. Section
the Fair and Accurate Credit Administration, 1775 Duke Street, 604(g)(5)(A) requires the Agencies to
Transactions Act of 2003 (FACT Act). Alexandria, VA 22314–3428. prescribe regulations that permit
The final rules create exceptions to the SUPPLEMENTARY INFORMATION: transactions that are determined to be
statute’s general prohibition on creditors necessary and appropriate to protect
obtaining or using medical information I. Background legitimate operational, transactional,
pertaining to a consumer in connection The FACT Act became law on risk, consumer, and other needs
with any determination of the December 4, 2003. Public Law 108–159, (including administrative verification
consumer’s eligibility, or continued 117 Stat. 1952. In general, the FACT Act purposes), consistent with
eligibility, for credit for all creditors. amends the Fair Credit Reporting Act Congressional intent to restrict the use
The exceptions permit creditors to (FCRA or Act) to enhance the ability of of medical information for inappropriate
obtain or use medical information in consumers to combat identity theft, purposes.
connection with credit eligibility increase the accuracy of consumer Section 603(d)(3) of the FCRA
determinations where necessary and reports, and allow consumers to restricts the sharing of medically related
appropriate for legitimate purposes, exercise greater control regarding the information with affiliates if that
consistent with the Congressional intent type and amount of marketing information meets the definition of
to restrict the use of medical solicitations they receive. ‘‘consumer report’’ in section 603(d)(1)
information for inappropriate purposes. Section 411 of the FACT Act generally of the FCRA. Specifically, section
The final rules also create limited limits the ability of creditors to obtain 603(d)(3) provides that the standard

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Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations 70665

exclusions from the definition of unions, and other creditors regulated by common corporate control,’’ ‘‘medical
‘‘consumer report’’ contained in section one of the Agencies. Most commenters information,’’ or ‘‘person’’ as defined in
603(d)(2)—such as sharing transaction supported the proposed rules, but urged the interim final rules. These definitions
or experience information among the Agencies to broaden the scope of the are republished in the final rules
affiliates or sharing other information rules to apply to all creditors. without revision.
among affiliates after notice and an On June 10, 2005, the Agencies
opportunity to opt-out—do not apply if published interim final rules and a Affiliate
medically related information is request for public comments in the Sectionll.3(b) of the interim final
disclosed to an affiliate. Medically Federal Register (70 FR 33958). The
rules defined ‘‘affiliate’’ to mean any
related information includes medical interim final rules created exceptions to
company that is related by common
information, as described above, as well the general prohibition against creditors
ownership or common corporate control
as an individualized list or description obtaining or using medical information
with another company.2 The Agencies
based on payment transactions for in connection with credit eligibility
concluded that this definition of
medical products or services, and an determinations, as required by section
‘‘affiliate’’ closely tracked the definition
aggregate list of identified consumers 604(g)(5)(A), to permit transactions
contained in section 2 of the FACT Act.
based on payment transactions for necessary and appropriate to protect
The Agencies also concluded that there
medical products or services. legitimate operational, transactional,
was no substantive difference between
Section 604(g)(3) of the FCRA risk, consumer, and other needs
(including administrative verification the FACT Act definition of ‘‘affiliate’’
provides several exceptions that allow
purposes), consistent with the intent of and the definition of ‘‘affiliate’’ in
institutions to share medically related
Congress to restrict the use of medical section 509 of the Gramm-Leach-Bliley
information with affiliates in
information for inappropriate purposes. Act (GLB Act).
accordance with the standard
exclusions that apply to the sharing of In response to comments on the One commenter requested use of an
non-medically related information.1 The proposed rules, the scope of the interim alternative definition of ‘‘affiliate’’ that
statute gives the Agencies and the FTC final rules was expanded so that all would incorporate certain concepts
the authority to create additional creditors could rely on the exceptions from California law. Specifically, this
exceptions by regulation or order. for obtaining and using medical commenter suggested revising the
Section 604(g)(4) of the FCRA information in connection with credit definition of ‘‘affiliate’’ to eliminate
provides that any person that receives eligibility determinations. The interim information sharing restrictions among
medical information from an affiliate final rules also created exceptions to the affiliates that are regulated by the same
pursuant to an exception in section special restrictions in section 603(d)(3) or similar functional regulators,
604(g)(3) or from a consumer reporting on sharing medically related involved in the same broad line of
agency under section 604(g)(1) must not information with affiliates, as permitted business, or share a common brand or
disclose such information to any other by section 604(g)(3)(C). The Agencies identity. This commenter maintained
person, except as necessary to carry out published these rules as interim final that such a definition would reduce
the purpose for which the information rules to give interested parties an costs and allow multiple entity financial
was initially disclosed, or as otherwise opportunity to comment on the institutions to better serve their clients.
permitted by statute, regulation, or expanded scope of the exceptions for The Agencies decline to incorporate
order. obtaining and using medical into the definition of ‘‘affiliate’’
information in connection with credit exceptions for entities regulated by the
II. Overview of Comments Received eligibility determinations. same or similar functional regulators,
On April 28, 2004, the Agencies Each Agency received the following
entities in the same line of business, or
published a notice of proposed number of comment letters on the
entities that share a common brand or
rulemaking in the Federal Register (69 interim final rules: OCC (8), Board (13),
identity. These exceptions were
FR 23380) relating to the medical FDIC (9), OTS (7), and NCUA (11).
incorporated into a California financial
information provisions of section 411 of Comments were received from industry
privacy law in August 2003.3 Section 2
the FACT Act. The proposed rules commenters (including depository
of the FACT Act defines the term
applied to banks, thrifts, Federal credit institutions, credit card companies,
‘‘affiliate’’ to mean ‘‘persons that are
mortgage lenders and other non-bank
related by common ownership or
1 The statutory exceptions provide that an
creditors, and industry trade
institution may share medically related information associations), consumer and community affiliated by corporate control.’’ 4
with an affiliate without having the communication
groups, and health privacy advocates. Congress did not incorporate the
categorically treated as a consumer report if the exceptions from California law into the
information is disclosed to an affiliate: (1) In As discussed more fully below,
connection with the business of insurance or commenters strongly supported the definition of ‘‘affiliate’’ when it enacted
annuities (including the activities described in expanded scope of the rules to allow all the FACT Act at the end of 2003. The
section 18B of the model Privacy of Consumer
creditors to rely on the exceptions for Agencies believe that the definition of
Financial and Health Information Regulation issued ‘‘affiliate’’ included in the interim final
by the National Association of Insurance obtaining and using medical
Commissioners, as in effect on January 1, 2003); (2) information in connection with credit rules better effectuates the intent of
For any purpose permitted without authorization eligibility determinations. The Congress than the revision suggested by
under the Standards for Individually Identifiable
comments, and the Agencies’ responses the commenter. Accordingly, the
Health Information promulgated by the Department
of Health and Human Services (HHS) pursuant to to the comments, are discussed in the
2 For purposes of the regulation, an ‘‘affiliate’’
the Health Insurance Portability and Accountability following section-by-section analysis.
Act of 1996 (HIPAA); (3) For any purpose referred includes an operating subsidiary of a bank or
to under section 1179 of HIPAA; (4) For any III. Section-by-Section Analysis savings association, and a credit union service
purpose described in section 502(e) of the Gramm- organization that is controlled by a Federal credit
Leach-Bliley Act; or (5) As otherwise determined to Sectionll.3 Definitions union.
3 See Calif. Financial Code § 4053(c).
be necessary and appropriate, by regulation or
order, by the Federal Trade Commission (FTC), the
The Agencies received no comments 4 Fair and Accurate Credit Transactions Act of

Agencies, or an applicable State insurance on the definitions of ‘‘Act,’’ ‘‘company,’’ 2003, Public Law No. 108–159, § 2, 117 Stat. 1952,
authority. 15 U.S.C. 1681b(g)(3). ‘‘consumer,’’ ‘‘common ownership or 1953 (2003).

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definition of ‘‘affiliate’’ is republished section, by its terms, applies to One commenter expressed concern
without change in the final rules. ‘‘transactions’’ for which the Agencies about enforcement of the rules in the
determine exceptions are necessary, not event of potential abuses by non-bank
Sectionll.30 Obtaining or Using
to ‘‘creditors’’ that the Agencies creditors using medical information
Medical Information in Connection With
determine must be protected by the pursuant to the exceptions and
a Determination of Eligibility for Credit
exceptions. Accordingly, the combined requested that the Agencies and the FTC
Section 411(a) of the FACT Act adds scope of the exceptions adopted address this issue. The Agencies will
a new section 604(g)(2) to the FCRA. pursuant to section 604(g)(5) in the enforce compliance with the final rules
This provision contains a broad interim final rules is as broad as the against creditors subject to their
limitation on the ability of creditors to prohibition to which it applies, and is
either obtain or use medical information enforcement authority. The Agencies
available to all creditors.
in connection with credit eligibility The interim final action was will coordinate with other agencies to
determinations. comprised of six rules. The applicability promote compliance with the final rules
of the section of each Agency’s rule by all creditors, including through
A. Scope of Rules on Obtaining or Using referrals to the relevant enforcement
addressing the prohibition on and
Medical Information agency where appropriate.
exceptions for creditors obtaining or
The proposed rules would have using medical information in One trade association representing
applied the exceptions to banks, thrifts, connection with credit eligibility state and Federal credit unions urged
and Federal credit unions. Many determinations was set forth in the NCUA to reassess its authority to
commenters on the proposal urged the § ll.30(a) and covered transactions in apply its rule to state-chartered credit
Agencies to expand the scope of the which certain enumerated entities unions or, alternatively, to seek a
exceptions to apply to all creditors, not participate as creditors. Under legislative solution to provide the
just to creditors that are banks, thrifts, § ll.30(a)(2), other entities that NCUA, or state regulators, with
or Federal credit unions. participate as creditors in transactions
As noted in the supplementary rulemaking authority over state-
in which an enumerated entity also
information to the interim final rules, chartered credit unions with regard to
participates as a creditor would also be
the prohibition in section 604(g)(2) on subject to that Agency’s rule. medical information. This commenter
creditors obtaining or using medical In addition, the interim final action believed that allowing the NCUA to
information in connection with credit included a separate rule, codified in exercise rulemaking authority with
eligibility determinations applies to all part 232 of the Board’s chapter of the respect to state-chartered credit unions
creditors. Under the FCRA, the term Code of Federal Regulations as would be more effective than having a
‘‘creditor’’ has the same meaning as in Regulation FF (hereafter ‘‘separate separate rule located in the Board’s
the Equal Credit Opportunity Act rule’’), which afforded the exceptions to chapter of the Code of Federal
(‘‘ECOA’’), which defines a ‘‘creditor’’ as the prohibition against obtaining and Regulations that applies to ‘‘all other
any person who regularly extends, using medical information for credit creditors’’ because the NCUA works
renews, or continues credit; any person eligibility determinations generally to more closely with state-chartered credit
who regularly arranges for the all creditors, except for creditors that are unions than the Board does. Finally,
extension, renewal, or continuation of subject to one of the other Agencies’ this commenter suggested that there was
credit; or any assignee of an original rules. This combination of rules ambiguity regarding the rules and the
creditor who participates in the decision established uniform coverage and authority to enforce the rules against
to extend, renew, or continue credit.5 exceptions for transactions involving state-chartered credit unions.
Creditors include depository any creditor that is subject to the
The NCUA and the other Agencies
institutions as well as entities that are prohibition on obtaining or using
medical information in section 411. The believe that covering state-chartered
neither depository institutions nor
separate rule was located in the Board’s credit unions under the separate rule is
affiliates of depository institutions, such
chapter of the Code of Federal the most appropriate means for making
as independent finance companies, loan
brokers, health care providers, and Regulations as a matter of convenience the exceptions to the general prohibition
automobile dealers. because many creditors are accustomed applicable to those entities. Under
The statute does not contain any to looking to the Board’s regulations section 621(a) of the FCRA, the FTC has
specific exceptions to this broad implementing other statutes, such as the enforcement authority over state-
prohibition. Instead, section 604(g)(5) Truth-in-Lending Act and the ECOA. chartered credit unions. As noted in the
directs the Agencies to prescribe In the supplementary information to supplementary information to the
regulations to permit ‘‘transactions’’ in the interim final rules, the Agencies interim final rule, the separate rule has
which creditors obtain or use medical expressed concern that uncertainty been located in the Board’s chapter of
information where ‘‘necessary and about this matter may have led creditors the Code of Federal Regulations as a
appropriate to protect legitimate that believed they could not avail matter of convenience because many
operational, transactional, risk, themselves of the exceptions not to creditors are accustomed to looking to
consumer, and other needs consistent comment on the appropriateness and the Board’s regulations implementing
with the intent of paragraph (2) to details of the exceptions. Therefore, other statutes, such as the Truth-in-
restrict the use of medical information these rules were adopted on an interim Lending Act and the Equal Credit
for inappropriate purposes.’’ 6 final basis to provide interested parties Opportunity Act.
The supplementary information to the with an opportunity to comment on the
Accordingly, the scope of the final
interim final rules noted that section expanded scope of the rules.
Most commenters strongly supported rules is identical to the scope of the
604(g)(5) does not, by its terms, limit the
the approach taken in the interim final interim final rules. The final rules
creditors that may rely on exceptions
granted by the Agencies. Moreover, that rules to expand the scope of the consist of the six rules included in the
exceptions to apply to all creditors. interim final rules. The scope provisions
5 15 U.S.C. 1681a(r)(5) and 1691a(e). None of the commenters objected to the in § ll.30(a) of each Agency’s rule and
6 15 U.S.C. 1681b(g)(5)(A). expanded scope of the exceptions. § 232.1(a) of the separate rule are

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republished without change in the final As noted in the supplementary encourage the sharing of medical
rules.7 information to the interim final rules, information. As explained in the
In the supplementary information to section 603(r)(5) of the FCRA provides supplementary information to the
the interim final rules, the Agencies that the terms ‘‘credit’’ and ‘‘creditor’’ interim final rules, the rule of
emphasized the importance of having have the same meanings as in section construction uses the phrase ‘‘without
consistent rules that prescribe 702 of the ECOA. The interim final rules specifically requesting medical
exceptions to the prohibitions from track the FCRA definitions of ‘‘credit’’ information.’’ The examples make clear
obtaining or using medical information and ‘‘creditor.’’ The Board’s that the rule of construction applies
in connection with credit eligibility interpretation of the terms ‘‘credit’’ and when medical information is provided
determinations. Thus, in developing the ‘‘creditor’’ in Regulation B and the by the consumer in response to a
proposed, interim final, and final rules, official staff commentary to Regulation general inquiry that does not
the Agencies have consulted and B, as appropriate, informs the specifically request medical information
coordinated with each other to establish application of those terms for FCRA or is provided by the consumer
identical rules. The Agencies will purposes. voluntarily on an unsolicited basis.
consult and coordinate with each other This commenter also reiterated its
regarding any amendments to the rules C. Receiving Unsolicited Medical previous request that the Agencies
for the purpose of assuring, to the extent Information require creditors to destroy or eliminate
possible, that the regulations prescribed Section ll .30(c) of each Agency’s any unsolicited medical information
by each Agency remain consistent and interim final rule contained a rule of that they receive. As explained in the
comparable with the regulations construction for the receipt of supplementary information to the
prescribed by the other Agencies. unsolicited medical information. interim final rules, the destruction of
Section 232.2 of the separate rule unsolicited medical information would
B. General Prohibition on Obtaining or contained the identical provision. The not be appropriate in circumstances
Using Medical Information rule of construction provides that a where records must be retained. For
Section ll.30(b)(1) of each Agency’s creditor does not obtain medical example, if unsolicited medical
interim final rule and § 232.1(b) of the information in violation of the information is obtained by a creditor on
separate rule incorporated the statute’s prohibition if it receives such a credit application for which adverse
general rule prohibiting creditors from information from a consumer, a action is taken, the creditor generally
obtaining or using medical information consumer reporting agency, or any other would be required to retain a copy of
pertaining to a consumer in connection person in connection with any the application, including any medical
with any determination of a consumer’s determination of the consumer’s information on the application, for 25
eligibility, or continued eligibility, for eligibility, or continued eligibility, for months pursuant to the record retention
credit, except as provided in the credit without specifically requesting provisions of Regulation B, which
regulations under subpart D. The medical information. The interim final implements the ECOA. Therefore, the
Agencies received no comments on rules clarified that a creditor that Agencies decline to impose a
these provisions. Section ll.30(b)(1) receives unsolicited medical requirement to destroy or eliminate
of each Agency’s rule and § 232.1(b) of information may use that information in unsolicited medical information.
the separate rule are republished connection with any determination of Section ll .30(c) of each Agency’s rule
without change in the final rule. the consumer’s eligibility, or continued and § 232.2 of the separate rule are
Section ll.30(b)(2) of each Agency’s eligibility, for credit only to the extent republished without change in the final
interim final rule and § 232.1(c) of the the creditor can rely on one of the rule.
separate rule clarified the meaning of exceptions in §§ ll .30(d) and (e) of
certain terms used in the statutory each Agency’s rule or §§ 232.3 and .4 of D. Financial Information Exception for
prohibition and the proposed rule, the separate rule. The interim final rules Obtaining and Using Medical
including ‘‘eligibility, or continued also provided examples to illustrate the Information
eligibility, for credit,’’ ‘‘credit,’’ and rule of construction. Section ll .30(d) of each Agency’s
‘‘creditor.’’ One commenter requested One commenter noted that it had interim final rule contained the
that the Agencies clarify that the previously requested that the provision financial information exception and
definitions of ‘‘credit’’ and ‘‘creditor’’ dealing with receipt of unsolicited examples. Section 232.3 of the separate
include the Board’s interpretations of medical information should be an rule contained the identical provision
these terms pursuant to the Board’s exception, rather than a rule of and examples.9 The financial
Regulation B, which implements the construction. As explained in the information exception consists of a
ECOA, and the Board’s official staff supplementary information to the three-part test. First, the information
commentary to Regulation B.8 interim final rules, the rule of must be the type of information
construction was retained as an routinely used in making credit
7 OTS is making a technical change to the scope interpretation, rather than as an eligibility determinations, such as
provision of its Fair Credit Reporting rule (section exception, because it interprets the information relating to debts, expenses,
571.1(b)) to make the provision more user-friendly.
8 Under Regulation B, the Board defines the term
statutory language regarding when a income, benefits, assets, collateral, or
‘‘creditor’’ to mean a person who, in the ordinary creditor ‘‘obtains’’ medical information the purpose of the loan, including the
course of business, regularly participates in a credit in violation of the prohibition. This use of proceeds. Second, the creditor
decision, including setting the terms of the credit, commenter also noted that it had must use the information in a manner
and includes a creditor’s assignee, transferee, or previously suggested limiting the ability and to an extent no less favorable than
subrogee who so participates. A creditor also
includes a person, such as a broker, who regularly of creditors to indirectly solicit or it would use comparable information
refers applicants or prospective applicants to
creditors, or selects or offers to select creditors to the person knew or had reasonable notice of the act, 9 For simplicity, references and citations to the

whom requests for credit may be made, for policy, or practice that constituted the violation separate rule have been omitted from the discussion
purposes of Regulation B’s prohibitions against before becoming involved in the credit transaction. below. For any change made to the provisions of
discrimination and discouragement. A person is not Finally, a creditor does not include a person whose §§ ll .30(d) and (e), corresponding changes have
a creditor regarding any violation of the ECOA or only participation in a credit transaction involves been made to §§ 232.3 and 232.4 of the separate
Regulation B committed by another creditor unless honoring a credit card. See 12 CFR 202.2(1). rule.

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that is not medical information in a do not identify the specific provider of ‘‘Except where a creditor has a specific
credit transaction. Third, the creditor medical information or the nature of application for the financing of medical
must not take the consumer’s physical, such services, products, or devices to a procedures or has received an
mental, or behavioral health, condition person other than the consumer, unless application in which income was
or history, type of treatment, or the uncoded information is relevant to claimed as deriving from injury or
prognosis into account as part of any process or effect the transaction and the disability, a creditor generally would be
such determination of credit eligibility. consumer provides specific written prohibited from specifically asking for
The interim final rules also provided consent for the furnishing of the medical information on a credit
examples of the types of information uncoded information. The requirement application.’’
covered by the exception, uses of for consumer reporting agencies to code The Agencies do not believe that the
medical information that are consistent certain information on consumer reports quoted sentence from the
with the exception, and uses of medical is beyond the scope of this rulemaking. supplementary information to the
information that are not consistent with Therefore, the Agencies decline to interim final rules creates a conflict
the exception. amend the example in the manner with the financial information
One commenter noted that none of requested. exception. The quoted language refers to
the examples explicitly mention The Agencies are revising the circumstances in which medical
workers’ compensation, even though example in § ll.30(d)(2)(iii)(C) to information may be specifically
§ ll .30(d)(1)(i) and the example in illustrate a circumstance where a requested on an application. The
§ ll .30(d)(2)(i)(C) appear to cover the creditor requires the consumer to obtain revision requested by the commenter
use of medical information to determine a debt cancellation contract, debt does not relate to what a creditor may
the likelihood and amount of future suspension agreement, or credit ask on an application, but relates to
medically-based income, including by insurance product from a ‘‘nonaffiliated whether a creditor may use medical
analogy workers’ compensation. This third party’’ in order to obtain a loan. information it ‘‘has received [on] an
commenter therefore requested a This change is designed to avoid application in which income was
clarification that medically-based confusion with other legal requirements. claimed as deriving from injury or
income, such as workers’ compensation, As noted in the supplementary disability.’’ If a consumer lists medically
may be obtained and used under the information to the interim final rules, related income on an application, the
exception just as disability income. other laws and regulations, including creditor may use that information in
The Agencies agree that workers’ applicable anti-tying rules and fair accordance with the exceptions in
compensation is income that would be lending laws, may prohibit or otherwise §§ ll.30(d) and (e). The application,
covered by the financial information restrict a creditor from requiring a however, should not specifically request
exception so long as it is the type of consumer to obtain a debt cancellation the consumer to disclose such medically
information routinely used in making contract, debt suspension agreement, or related income. Of course, the
credit eligibility determinations. The credit insurance product in connection application can ask the consumer to list
Agencies have revised the example in with an extension of credit.10 A all sources of income that the consumer
§ ll.30(d)(2)(i)(C) to add a reference to discussion of the circumstances would like the creditor to consider.
workers’ compensation. Specifically, the prohibited by other laws and regulations Section ll.30(d) of the final rule is
example has been revised to read as is beyond the scope of this rule. revised as noted above.
follows: ‘‘The dollar amount and One commenter believed that a
continued eligibility for disability sentence in the supplementary E. Specific Exceptions for Obtaining and
income, workers’ compensation income, information to the interim final rules Using Medical Information
or other benefits related to health or a created a conflict with the financial Sections ll.30(e)(1)(i)–(ix) of the
medical condition that is relied on as a information exception by implying that interim final rules contained a number
source of repayment.’’ the only circumstance where the of specific exceptions to the general
The Agencies reiterate their statement creditor could legitimately seek medical prohibition. Section ll.30(e) of the
in the supplementary information to the information was when the consumer is interim final rules provided examples of
interim final rule that the types of applying to finance a medical certain exceptions. These exceptions
information listed as examples of procedure. This commenter believed allow creditors to obtain and use
information routinely used in making that a conflict was created by the medical information for a limited
credit eligibility determinations for following sentence: ‘‘Thus, except number of particular purposes in
purposes of the financial information where a creditor has a specific connection with a determination of the
exception is not an exhaustive list. The application for the financing of medical consumer’s eligibility, or continued
fact that a particular type of information procedures, a creditor generally would eligibility, for credit. A creditor that
is not specifically mentioned in the text be prohibited from specifically asking obtains medical information pursuant to
of the regulation or the accompanying for medical information on a credit one of these specific exceptions may not
examples does not mean that such application.’’ (70 FR 33967.) This subsequently use the information in
information falls outside the scope of commenter requested that the Agencies connection with determining the
the financial information exception. modify this sentence to state that: consumer’s eligibility, or continued
Another commenter requested eligibility, for credit unless an exception
clarification of the example in 10 For example, banks are prohibited from applies. The specific exceptions and
§ ll.30(d)(2)(i)(D) that the provision conditioning an extension of credit on the examples are republished in each
does not require the identity and contact consumer obtaining some additional credit, Agency’s final rules and the separate
property or service from the bank or its affiliate
information for medical debt creditors other than a loan, discount, deposit or trust service, rule with a few technical, non-
to be coded when included on credit see Bank Holding Company Amendments of 1970 substantive changes.
reports. Sections 604(g)(1) and 605(a)(6) § 106(b) (12 U.S.C. 1972); see also 12 CFR 37.3(a) Determination of power of attorney,
of the FCRA generally require consumer (providing that a national bank may not extend legal representative and legal capacity.
credit nor alter the terms or conditions of an
reporting agencies to use codes on extension of credit conditioned upon the customer
Section ll.30(e)(1)(i) of the interim
consumer reports furnished in entering into a debt cancellation contract or debt final rules contained an exception
connection with credit transactions that suspension agreement with the bank). relating to the use of a power of attorney

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Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations 70669

or legal representative. This exception asserted medical condition or event. consumer’s medical condition.
permits a creditor to obtain and use Creditors generally are not qualified to Therefore, this commenter requested the
medical information in connection with determine the mental capacity of a Agencies to confirm its interpretation
determining the consumer’s credit consumer. Moreover, permitting that the compliance with applicable
eligibility to determine: (1) Whether the creditors to inquire into the mental laws exception is broad enough to
use of a power of attorney or legal capacity of consumers based only on a permit creditors to consider medical
representative that is triggered by a ‘‘reasonable suspicion’’ could result in conditions even though such laws do
medical event or condition is necessary discrimination against certain not specifically require the
and appropriate; or (2) whether the consumers and circumvention of the consideration of medical conditions.
consumer has the legal capacity to general prohibition. Therefore, the The Agencies acknowledge that it
contract when a person seeks to exercise Agencies decline to expand the may be necessary to obtain and use
a power of attorney or act as legal exception in the manner requested by medical information to comply with
representative for a consumer based on the commenter. various requirements of local, state, or
an asserted medical event or condition. The Agencies recognized in the Federal laws. A discussion of whether
One commenter requested that the supplementary information to the specific laws and legal requirements
Agencies broaden the scope of this interim final rules that a power of may trigger this exception would
exception to permit creditors to attorney or legal representative status involve interpretation of those laws and
investigate the mental capacity of a may be used in a variety of is beyond the scope of this rulemaking.
consumer based on a suspicion that the circumstances, many of which may have Section ll.30(e)(1)(ii) is republished
consumer lacks the capacity to contract. no connection with a determination of without change in the final rules.
This commenter did not believe that an a consumer’s eligibility, or continued Special credit program or credit-
exception to permit an inquiry into the eligibility, for credit. Nevertheless, the related assistance program. Section
consumer’s legal capacity ‘‘when a Agencies concluded that an exception ll.30(e)(1)(iii) of the interim final
person seeks to exercise a power of was necessary because a power of rules contained an exception to permit
attorney or act as a legal representative attorney or legal representative status creditors to obtain and use medical
for a consumer based on an asserted based on an asserted medical condition information in connection with a
medical event or condition’’ was broad or event may relate to a credit eligibility determination of the consumer’s
enough to cover all circumstances determination in certain circumstances. eligibility, or continued eligibility, for
where the consumer’s legal capacity The Agencies do not agree with the credit, to determine, at the consumer’s
may be in doubt. This commenter urged commenter that the use of medical request, whether the consumer qualifies
the Agencies to clarify that creditors information to deny loans based on a for a legally permissible special credit
may investigate the mental capacity of lack of mental capacity is not connected program or credit-related assistance
a consumer even when there is no with credit eligibility determinations. program that is: (a) Designed to meet the
power of attorney issue, and that a Accordingly, the Agencies cannot state special needs of consumers with
reasonable suspicion is a sufficient basis categorically that medical information medical conditions and (b) established
to conduct the investigation. used for this purpose is not subject to and administered pursuant to a written
Additionally, or in the alternative, this the general prohibition. plan of the plan sponsor that identifies
commenter requested clarification that The Agencies believe that the terms the class of persons that the program is
loan denials based on lack of legal ‘‘medical event’’ and ‘‘medical designed to benefit and sets forth the
mental capacity are not eligibility condition’’ are clear. The Agencies note procedures and standards for extending
issues; therefore, no exception is that these terms have been used in a credit or providing other credit-related
necessary, because use of medical number of other exceptions without assistance under the program. This
information for this purpose is not objection as to their clarity. exception was added in the interim final
subject to the general statutory A technical, non-substantive change rules and is modeled after the
prohibition. Finally, this commenter did is made to § ll.30(e)(1)(i) in the final provisions relating to special purpose
not believe that the terms ‘‘medical rules. Section ll.30(e)(1)(i) is revised credit programs in the ECOA and the
event’’ or ‘‘condition’’ were clear for to replace ‘‘medical event or condition’’ Board’s Regulation B, 12 CFR part 202.
purposes of the power of attorney with ‘‘medical condition or event’’ for An example of this exception was
exception. Specifically, this commenter consistency with the exceptions in provided in § ll.30(e)(2). Commenters
believed it was unclear how significant §§ ll.30(e)(viii) and (ix). supported the addition of this
the medical event or condition must be, Compliance with applicable law. exception. Sections ll.30(e)(1)(iii) and
who must make the determination that Section ll.30(e)(1)(ii) of the interim (e)(2) are republished without change in
the medical event or condition has final rules contained an exception to the final rules.
occurred, and whether a suspicion permit a creditor to obtain and use Fraud prevention or detection.
allows the creditor to investigate medical information to comply with Section ll.30(e)(1)(iv) of the interim
further. applicable requirements of local, state, final rules contained an exception for
As noted in the supplementary or Federal laws. fraud prevention or detection. One
information to the interim final rules, One commenter believed that, even commenter reiterated a previous request
commenters on the proposal were when an applicant meets the minimum that the Agencies delete this exception,
divided on the need for a broader standard of legal capacity, there may be maintaining that the exception was
exception covering powers of attorney situations in which the creditor believes overly broad and unnecessary.
and legal capacity. In the interim final that the consumer may not fully As explained in the supplementary
rules, the Agencies considered whether understand the nature of the transaction information to the interim final rules,
to adopt a broader exception, but or be able to determine whether it is in the fraud prevention or detection
declined to do so. The Agencies believe his or her best interest. This commenter exception is available only to the extent
that creditors, or their counsel, are argued that HOEPA and its borrower’s necessary to detect or prevent fraud.
qualified to determine whether a power interest and net tangible benefit tests, as The Agencies believe that there may be
of attorney or legal representative status well as state anti-flipping laws, could be limited circumstances where the use of
has been properly invoked based on an read to require an evaluation of the medical information is necessary for

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70670 Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations

fraud prevention or detection purposes. broach the topic of medical information. is a non-medical debt, the creditor may
For example, given the broad definition This commenter maintained that a seek an explanation from the consumer
of ‘‘medical information’’ and the creditor should be able to raise the topic with the medical debt about the amount
development of increasingly in a manner consistent with the and status of the debt and verify that
sophisticated anti-fraud technologies, prohibition against holding information explanation, provided that the creditor’s
such as various biometric tools, the about a medical condition against the policies and procedures also require
Agencies believe it is important to retain consumer. For example, if negative that the creditor seek an explanation
the fraud prevention or detection information from a medical furnisher from the consumer with the non-
exception so as not to hinder the appeared on a consumer’s credit report, medical debt about the amount and
development of new anti-fraud this commenter would want the loan status of the debt and verifies that
technologies. Furthermore, the officer to be able to explain that the explanation.
supplementary information to the consumer may voluntarily provide an The Agencies decline to provide a
interim final rules also noted that explanation of the underlying medical model consent form that would create a
creditors may not rely on blanket condition and, if the consumer did so, safe harbor for satisfying the medical
assertions of a fraud prevention or the creditor could verify that accommodation exception. In the
detection purpose to fall within the explanation. This commenter also interim final rules, the Agencies omitted
exception, but must demonstrate the requested the creation of a ‘‘safe harbor’’ the requirement for a separate signed
necessity for, and actual use of, medical provision to permit the use of a consent writing by the consumer that describes
information to prevent or detect fraud. form (or standard language read over the the specific medical information and the
Section ll.30(e)(1)(iv) is republished telephone) to satisfy compliance with specific purpose for which it is to be
without change in the final rules. the medical accommodation exception. used. Instead, the Agencies chose to
Financing medical products or This commenter believed that use of a adopt a more flexible standard that
services. Section ll.30(e)(1)(v) of the consent form containing standard focuses on the specific request of the
interim final rules contained an language is appropriate once the consumer for a medical accommodation
exception for the financing of medical consumer indicates that he or she wants and the creditor’s documentation of that
products or services. Section the creditor to consider medical request. Under this approach, the
ll.30(e)(3) of the interim final rules information to accommodate the creditor is not restricted to any
provided examples of this exception. consumer. particular form of documentation of the
The Agencies received no comments on As explained in the supplementary consumer’s request. For example, once
the medical financing exception in the information to the interim final rules,
a consumer has requested a medical
interim final rules. Sections the medical accommodation exception
accommodation, a creditor may elect to
ll.30(e)(1)(v) and (e)(3) are is triggered by the specific request of the
document a consumer’s request by
republished without change in the final consumer. The example in
having the consumer complete and sign
rules. § ll.30(e)(4)(iii) of the interim final
Medical accommodation. Section a standard consent form. Although the
rules and the supplementary
ll.30(e)(1)(vi) of the interim final example in § ll.30(e)(4)(v) provides
information also explained that a
rules contained an exception for that the use of boilerplate language in an
consumer may make a specific request
medical accommodations to consumers. application to routinely obtain
by responding to a generic inquiry on a
This exception applies where the consumer authorization or consent to
credit application that invites the
consumer, or the consumer’s legal consumer to describe any special obtain and use medical information for
representative, specifically requests that circumstances or other information (not credit eligibility determinations does
the creditor use medical information in limited to medical information) that the not constitute a specific request for a
determining the consumer’s eligibility, consumer would like the creditor to medical accommodation, nothing in that
or continued eligibility, for credit, to consider in evaluating the consumer’s example prohibits the use of a standard
accommodate the consumer’s particular application. The medical consent form as a means of
circumstances, and such request is accommodation exception is not documentation once the consumer has
documented by the creditor. Any such triggered until the consumer makes a made a specific request. Because other
accommodation must be consistent with specific request for an accommodation. forms of documentation may also be
safe and sound practices. The interim Therefore, in the circumstances appropriate, the Agencies do not believe
final rules permitted the medical described by the commenter, the use by the final rules should specify any
accommodation exception to be a creditor of medical information from particular form of documentation or
triggered by the consumer’s oral, a consumer report, such as information create a safe harbor for one particular
electronic, or written request. Moreover, about a medical debt, to make a specific form of documentation. Sections
a consumer could make a specific inquiry about the consumer’s medical ll.30(e)(1)(vi) and (e)(4) are
request by responding to a generic condition is not consistent with the republished without change in the final
inquiry on a credit application that financial information exception and is rules.
invites the consumer to describe any not permitted. Forbearance. Section ll.30(e)(1)(vii)
special circumstances or other Of course, if a consumer’s credit of the interim final rules contained an
information (not limited to medical report shows a substantial unpaid debt exception to the general prohibition for
information) that the consumer would that has been coded as medical forbearance practices and programs that
like the creditor to consider in information, the creditor may use that are triggered by medical events or
evaluating the consumer’s application. information in a manner and to an conditions. Specifically, this exception
Section ll.30(e)(4) of the interim final extent that is no less favorable than it permits creditors to obtain and use
rules provided examples to illustrate the would use comparable information that medical information ‘‘consistent with
medical accommodation exception. is not medical information. For safe and sound practices, to determine
One commenter believed that the example, if two consumers apply for whether the provisions of a forbearance
regulation should clarify that, to meet credit and each has a $50,000 debt that practice or program that is triggered by
the medical accommodation exception, is 90-days past due, one of which is a a medical event or condition apply to a
the consumer need not be the first to coded medical debt and the other which consumer.’’

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One commenter requested that the republished without change in the final contain a comparable provision on
rule clarify that the phrase ‘‘similar rules. sharing medically related information
forbearance practice or program’’ Additional exceptions requested by with affiliates because the Agencies’
includes informal forbearance practices commenters. One commenter reiterated rulemaking authority under section
by creditors. According to the a previous request that the final rules 604(g)(5)(A) of the FCRA does not apply
commenter, this clarification would exclude from the prohibition on to the statute’s affiliate sharing
benefit consumers because the creditor obtaining or using medical information provisions.
would be able to consider medical employers, plan administrators, and A number of commenters expressed
information in decisions regarding card issuers that provide flexible concern that the separate rule does not
additional credit or debt deferment. spending account programs or address the sharing of medically related
As noted in the supplementary healthcare reimbursement account information with affiliates. These
information to the interim final rule, the programs that utilize cards with credit commenters generally believed that
forbearance exception is flexible enough features. As noted in the supplementary there should be regulatory provisions
to cover both formal and informal information to the interim final rules, parallel to those in § ll.32 to create
forbearance practices and programs. the Agencies believe that an additional exceptions applicable to all creditors
Therefore, the Agencies believe that the exception that relates to flexible that share medically related information
recommended change is unnecessary. spending programs tied to credit cards with affiliates. Some of these
A technical, non-substantive change is not needed because the commenter’s commenters requested that the Agencies
is made to § ll.30(e)(1)(vii) in the concerns are adequately addressed by modify the separate rule to incorporate
final rules. Section ll.30(e)(1)(vii) is the definition of ‘‘eligibility, or these exceptions. Other commenters
revised to replace ‘‘medical event or continued eligibility, for credit’’ and the recognized the limited regulatory
condition’’ with ‘‘medical condition or existing exceptions. authority of the Agencies with respect to
event’’ for consistency with the the sharing of medically related
Section ll.31 Limits on Redisclosure
exceptions in §§ ll.30(e)(viii) and (ix). information with affiliates and
of Information
In addition, a non-substantive change is requested that the FTC issue a rule
made to the example of the forbearance Section ll.31 of each Agency’s consistent with the provisions of
exception in § ll.30(e)(5) by adding a interim final rule incorporated the § ll.32. One commenter requested a
concluding sentence to indicate that the statutory provision regarding the limits clarification that creditors not subject to
exception would apply in the example on redisclosure of medical information. § ll.32 could rely on the statutory
presented. This section provided that a person exceptions for sharing medically related
Debt cancellation contracts, debt receiving medical information about a information with affiliates. Another
suspension agreements, or credit consumer from a consumer reporting commenter urged NCUA to encourage
insurance products. Section agency or an affiliate is prohibited from the Board to provide guidance to state-
ll.30(e)(1)(viii) of the interim final disclosing that information to any other chartered credit unions and other
rules contained an exception for debt person, except as necessary to carry out creditors on this issue.
cancellation contracts and debt the purposes for which the information Each Agency’s authority to create
suspension agreements. Section was initially disclosed, or as otherwise exceptions to permit the sharing of
ll.30(e)(1)(ix) of the interim final permitted by statute, regulation, or medically related information with
rules contained an exception for credit order. The separate rule did not contain affiliates is limited to prescribing rules
insurance products. a comparable provision on redisclosure applicable to entities subject to the
These exceptions made clear that limits because the Agencies’ rulemaking jurisdiction of each particular Agency.
creditors may use medical information authority under section 604(g)(5)(A) of The FTC has the authority to
to underwrite credit insurance, or to the FCRA does not apply to the statute’s promulgate rules creating exceptions to
underwrite related credit products, such redisclosure provision. the restrictions on sharing medically
as debt cancellation contracts and debt The Agencies received one comment related information with affiliates for
suspension agreements, if a medical on the redisclosure provision. The entities subject to the FTC’s
condition or event is a triggering event Agencies have incorporated into this enforcement authority. The Agencies
rulemaking the redisclosure provision have forwarded comments on this issue
for the provision of benefits. However,
directly from the statute, without further to the FTC for its consideration.
the fact that a consumer is denied these
products cannot be used as a subterfuge interpretation. Section ll.31 is The Agencies note that five of the six
therefore republished without change in exceptions included in § ll.32(c)
to consider medical information in simply repeat exceptions specifically
making a determination about eligibility the final rules.
enumerated in the statute. Any person
or continued eligibility for an Section ll.32 Sharing Medical may rely on the statutory exceptions as
underlying loan. Therefore, a creditor Information With Affiliates appropriate. The only exception not
may not use medical information about Section ll.32 of the interim final contained in the statute relates to
a consumer, such as the fact that the rules addressed the sharing of medically sharing medically related information
consumer uses a wheelchair, to related information with affiliates. with an affiliate in connection with a
determine whether the consumer will be Section ll.32(a) of the interim final determination of the consumer’s
required to obtain a debt cancellation rules described the institutions to which eligibility, or continued eligibility, for
contract, debt suspension agreement, or this section applies. Section ll.32(b) credit consistent with § ll.30, and is
credit insurance product.11 The of the interim final rules restated the found in § ll.32(c)(5).
Agencies received no comments on statutory restriction on sharing In many circumstances where this
these two exceptions. Sections medically related information with additional, non-statutory exception
ll.30(e)(1)(viii) and (ix) are affiliates. Section ll.32(c) of the would apply, it is likely that one of the
11 As noted above, other laws and regulations may
interim final rules contained exceptions exceptions enumerated in the statute
prohibit or otherwise restrict a creditor from
to the statutory restriction on sharing would also apply, such as the exception
requiring a consumer to obtain one of these medically related information with linked to section 502(e) of the GLB Act.
products in connection with an extension of credit. affiliates. The separate rule did not For example, if a creditor has an affiliate

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perform underwriting for loans it Regulatory Flexibility Analysis with the June 10, 2005, interim final
originates and the creditor receives an OCC: Under section 605(b) of the rule. The Board received no comments
application containing information Regulatory Flexibility Act (RFA), 5 on its regulatory flexibility analysis.
about medical debts, the creditor may Under section 605(b) of the
U.S.C. 605(b), the regulatory flexibility
furnish the application, including the Regulatory Flexibility Act (RFA), 5
analysis otherwise required under
medical debt information, to the U.S.C. 605(b), the regulatory flexibility
section 604 of the RFA is not required
underwriting affiliate for use in analysis otherwise required under
if an agency certifies, along with a
underwriting consistent with the section 604 of the RFA is not required
statement providing the factual basis for
exceptions in § ll.30. This sharing of such certification, that the rule will not
if an agency certifies, along with a
medical information would be statement providing the factual basis for
have a significant economic impact on
permissible both because it is in such certification, that the rule will not
a substantial number of small entities.
connection with a determination of the have a significant economic impact on
The Small Business Administration
consumer’s credit eligibility consistent a substantial number of small entities.
(SBA) has defined ‘‘small entities’’ for Based on the analysis below, the Board
with § ll.30 and because the banking purposes as a bank or savings
disclosure is necessary to effect, certifies that this final rule will not have
institution with assets of $150 million a significant economic impact on a
administer, or enforce a transaction or less. See 13 CFR 121.201.
requested or authorized by the substantial number of small entities for
The OCC published an Initial
consumer in accordance with section the reasons stated below.
Regulatory Flexibility Analysis in 1. Statement of the need for and
502(e) of the GLB Act. Section ll.32 connection with the April 28, 2004
is therefore republished without change objectives of the final rule. The FACT
NPRM. The OCC also certified that there Act amends the FCRA and was enacted,
in the final rules. would not be a significant economic in part, for the purpose of protecting
Effective Date impact on a substantial number of small consumers’ medical information.
entities in the June 10, 2005 interim Section 411 of the FACT Act contains a
The effective date of the interim final final rule. The OCC did not receive any general prohibition on creditors
rules, published in the Federal Register comments relating to significant obtaining or using medical information
on June 10, 2005 (70 FR 33958), is economic impact upon a substantial pertaining to a consumer in connection
delayed until April 1, 2006, the first day number of small entities on either the with any determination of the
of the calendar quarter. The effective NPRM or interim final rule. consumer’s eligibility, or continued
date of these final rules published today The final rule implements section 411 eligibility, for credit. Section 411
is also April 1, 2006. These final rules of the FACT Act and imposes only authorizes the Board, together with the
will immediately replace the interim minimal economic impact on entities other Agencies, to create exceptions to
final rules on April 1, 2006, and only covered by the OCC’s final rule. The allow creditors to obtain or use medical
these final rules will be in effect on or final rule creates exceptions to the information for eligibility purposes
after April 1, 2006. FACT Act’s prohibition against national where necessary and appropriate to
One commenter believed that an banks obtaining and using a consumer’s protect legitimate operational,
implementation date should not be set medical information in connection with transactional risk, consumer, and other
until at least six months after a final credit determinations. Additionally, the needs, consistent with the
determination as to which agency will final rule implements the FACT Act’s Congressional intent to restrict the use
enforce these rules against state- restrictions on the sharing of medical of medical information for inappropriate
chartered credit unions and which information among affiliates and purposes.
agency is responsible for providing includes exceptions to permit the Section 411 also limits the ability of
guidance on information sharing with sharing of medical information in an institution to share medical
affiliates of state-chartered credit certain circumstances. The final rule information with its affiliates without
unions. As noted above, the FCRA applies to all national banks and Federal becoming a consumer reporting agency,
clearly provides that the FTC is branches and agencies. The final rule subject to certain exceptions, and
responsible for enforcing the statute also applies to persons, regardless of restricts the redisclosure of medical
against state-chartered credit unions. asset size, that participate in a credit information. The statute authorizes the
Similarly, any regulations on transaction involving a national bank or Board to issue regulations to create
information sharing with affiliates of Federal Branch or agency that obtain or additional exceptions that are
state-chartered credit unions would use medical information in connection determined to be necessary and
have to be issued by the FTC. The with credit determinations. appropriate to permit the sharing of
Agencies do not believe that any further Approximately 1,077 national banks medical information among affiliates.
delay in the effective date is warranted. have assets of $150 million or less. The The Board is adopting the final rule to
OCC is unable to estimate the number create exceptions that permit creditors
V. Regulatory Analysis of persons that may participate in a to obtain and use medical information
Paperwork Reduction Act credit transaction with national banks or in credit eligibility determinations,
Federal branches or agencies. The OCC restate the limits on redisclosure, and
In accordance with the Paperwork has determined that the estimated per restate and add to the exceptions that
Reduction Act of 1995 (44 U.S.C. 3506, bank cost of the final rule is not large allow sharing among affiliates. The
et seq.) and its implementing enough to have a significant economic SUPPLEMENTARY INFORMATION above and
regulations at 5 CFR part 1320, impact. Therefore, the OCC certifies that the SUPPLEMENTARY INFORMATION to the
including Appendix A.1, the Agencies this final rule will not have a significant interim final rule (70 FR 33958) contain
have reviewed the final rules and economic impact on a substantial information on the objectives of the
determined that they contain no number of small entities. final rule.
collections of information. The Board Board: The Board prepared a 2. Summary of issues raised by
made this determination under regulatory flexibility analysis as comments in response to the interim
authority delegated by the Office of required by the Regulatory Flexibility final regulatory flexibility analysis. In
Management and Budget. Act (5 U.S.C. 601 et seq.) in connection accordance with section 3(a) of the

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Regulatory Flexibility Act, the Board the SUPPLEMENTARY INFORMATION to the foreign banks, and persons that
conducted a regulatory flexibility interim final rule (70 FR 33958). The participate in a credit transaction
analysis in connection with the interim final rule contains no reporting or involving these banks, regardless of
final rules. The Board did not receive disclosure requirements. their size. Of the approximately 5,250
any comments on its regulatory 5. Steps taken to minimize the banks that fall in these categories,
flexibility analysis. economic impact on small entities. The approximately 3,368 have assets of $150
3. Description of small entities Board solicited comment on how to million or less.
affected by the proposal. Each section of minimize the economic impact on small OTS: In accordance with section
the final rule applies to different types entities. The Board did not receive any 603(a) of the Regulatory Flexibility Act
of small entities and specifies the types comments on this issue. By adopting (RFA) (5 U.S.C. 603(a)), OTS conducted
of small entities subject to that section. consistent rules and exceptions, the an initial regulatory flexibility analysis
The final rule will apply, in whole or in Board and the other Agencies have in connection with the April 28, 2004
part, to banks that are members of the attempted to minimize the economic proposed rule. OTS did not receive any
Federal Reserve System (other than impact on small entities. comments on its initial regulatory
national banks) and their subsidiaries, FDIC: The FDIC prepared a regulatory flexibility analysis.
branches and Agencies of foreign banks flexibility analysis as required by the Upon further analysis, OTS certified
(other than Federal branches, Federal Regulatory Flexibility Act (5 U.S.C. 601 in accordance with section 605(b) of the
Agencies, and insured State branches of et seq.). The FDIC received no RFA (5 U.S.C. 605(b)) that the June 10,
foreign banks) and their subsidiaries, comments on its analysis. 2005 interim final rule would not have
commercial lending companies owned Under section 605(b) of the
a significant economic impact on a
or controlled by foreign banks, Regulatory Flexibility Act (RFA), 5
substantial number of small entities.
organizations operating under section U.S.C. 605(b), the regulatory flexibility
OTS received no comments on its
25 or 25A of the Federal Reserve Act (12 analysis otherwise required under
certification. OTS makes the same
U.S.C. 601 et seq., and 611 et seq.), bank section 604 of the RFA is not required
certification for this final rule. The
holding companies and affiliates of such if an agency certifies, along with a
statement providing the factual basis for Small Business Administration (SBA)
holding companies (other than has generally defined small savings
depository institutions and consumer such certification, that the rule will not
have a significant economic impact on institutions for RFA purposes as those
reporting agencies), and creditors that with assets of $150 million or less. 13
participate in transactions with one of a substantial number of small entities.
FDIC certified that the interim final rule CFR 121.201.
the above-mentioned entities. A
will not have a significant economic This final rule implements section
separate rule codified in Regulation FF
impact on a substantial number of small 411 of the FACT Act and imposes only
will apply to creditors not otherwise
entities; and upon further analysis, the minimal economic impact. Section
subject to one of the Agency rules. The
FDIC certifies that this final rule 571.30 creates exceptions to allow
Board’s final rule will apply to the
following institutions (numbers creating exceptions to the FACT Act’s creditors to obtain or use medical
approximate): State member banks general prohibition on creditors information for credit eligibility
(932), bank holding companies (5,152), obtaining or using medical information purposes where necessary and
holding company non-bank subsidiaries pertaining to a consumer in connection appropriate to protect legitimate
(2,131), U.S. branches and agencies of with any determination of the operational, transactional, risk,
foreign banks (289), and Edge and consumer’s eligibility, or continued consumer, and other needs, consistent
agreement corporations (75), for a eligibility, for credit will not have a with the Congressional intent to restrict
subtotal of approximately 8,579 significant economic impact on small the use of medical information for
institutions. The Board estimates that entities. inappropriate purposes. It applies to any
over 5,000 of these institutions could be The Small Business Administration of the following, regardless of size, that
considered small institutions with (SBA) has defined ‘‘small entities’’ for participates as a creditor in a
assets less than $150 million. The Board banking purposes as a bank or savings transaction: (1) A savings association;
is unable to estimate the number of institution with assets of $150 million (2) a subsidiary owned in whole or in
creditors that may participate in or less. See 13 CFR 121.201. This final part by a savings association; (3) a
transactions with such institutions or rule, as authorized by section 411 of the savings and loan holding company; (4)
the number of other creditors that may FACT Act, creates exceptions to allow a subsidiary of a savings and loan
be covered by the separate rule codified creditors to obtain or use medical holding company other than a bank or
in Regulation FF. information for eligibility purposes subsidiary of a bank; (5) a service
All small entities that are creditors where necessary and appropriate to corporation owned in whole or in part
will be affected by the provision of the protect legitimate operational, by a savings association; or (6) any other
final rule that addresses the prohibition transactional risk, consumer, and other person that participates as a creditor in
on, and exceptions to, creditors needs, consistent with the a transaction involving a person
obtaining or using medical information Congressional intent to restrict the use described in (1)–(5).
in connection with credit eligibility of medical information for inappropriate Section 571.31 implements the FACT
determinations. All small creditors will purposes. The rule also excludes, in Act’s restrictions on the redisclosure of
have to comply with the exceptions if certain situations, medical information information. Section 571.32 implements
they obtain or use medical information shared by a covered entity with an the FACT Act’s restrictions on the
about consumers in connection with affiliate from the definition of a sharing of medical information among
any credit eligibility determination. consumer report in section 603(d) of the affiliates and includes exceptions to
4. Recordkeeping, reporting, and FCRA, and addresses the reuse and permit the sharing of medical
compliance requirements. The final rule redisclosure of medical information. information in certain circumstances.
requires certain documentation to The final rule applies to all state These sections apply to savings
qualify for some of the specific banks insured by the FDIC (other than associations and federal savings
exceptions, as discussed in the members of the Federal Reserve association operating subsidiaries,
SUPPLEMENTARY INFORMATION above and System), all insured State branches of regardless of size.

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70674 Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations

As referenced in the Supplementary Small Business Regulatory Enforcement OCC and OTS Unfunded Mandates
Information to the interim final rule (70 Fairness Act Reform Act of 1995 Determination
FR 33958), other laws and regulations, FDIC: The Small Business Regulatory Section 202 of the Unfunded
such as the Fair Housing Act, the Enforcement Fairness Act of 1996 Mandates Reform Act of 1995, Public
Americans with Disabilities Act, and (SBREFA) (Pub. L. 104–121, 110 Stat. Law 104–4 (Unfunded Mandates Act)
OTS’s anti-discrimination rules in 12 857) provides generally for agencies to requires that an agency prepare a
CFR part 528, also limit or regulate report rules to Congress and for budgetary impact statement before
obtaining and using medical Congress to review these rules. The promulgating a rule that includes a
information for credit eligibility reporting requirement is triggered in Federal mandate that may result in
determinations in a manner that instances where the FDIC issues a final expenditure by state, local, and tribal
discriminates against persons whose rule as defined by the Administrative governments, in the aggregate, or by the
medical condition constitutes a Procedure Act (APA) (5 U.S.C. 551, et private sector, of $100 million or more
‘‘disability’’ or ‘‘handicap’’ under those seq.). Because the FDIC is issuing a final in any one year. If a budgetary impact
authorities. Other laws, such as the GLB rule as defined by the APA, the FDIC statement is required, section 205 of the
Act, the Health Insurance Portability will file the reports required by Unfunded Mandates Act also requires
and Accountability Act of 1996 SBREFA. an agency to identify and consider a
(HIPAA), and other parts of the FCRA, NCUA: A SBREFA (Pub. L. 104–121) reasonable number of regulatory
also limit or regulate the use, collection, reporting requirement is also triggered alternatives before promulgating a rule.
and sharing of consumer information, in instances where NCUA issues a final The OCC and OTS each has determined
including medical information. The rule as defined by section 551 of the that their respective final rules will not
industry’s preexisting familiarity and Administrative Procedure Act 5 U.S.C. result in expenditures by State, local,
compliance with the requirements of 551. NCUA is submitting this final rule and tribal governments, or by the
these other authorities to the extent to the Office of Management and Budget private sector, of $100 million or more.
applicable is one factor that OTS for a determination that this rule is not Accordingly, neither the OCC nor the
expects will minimize the economic a major rule for purposes of SBREFA. OTS has prepared a budgetary impact
impact of today’s final rule. statement or specifically addressed the
OCC and OTS Executive Order 12866 regulatory alternatives considered.
NCUA: The Regulatory Flexibility Act Determination
requires NCUA to prepare an analysis to NCUA: The Treasury and General
describe any significant economic The OCC and OTS each has
Government Appropriations Act, 1999—
impact any regulation may have on a determined that its portion of the rule
Assessment of Federal Regulations and
substantial number of small entities. is not a significant regulatory action
Policies on Families
NCUA considers credit unions having under Executive Order 12866.
less than ten million dollars in assets to The NCUA has determined that this
OCC Executive Order 13132 rule would not affect family well-being
be small for purposes of the Regulatory Determination
Flexibility Act. NCUA Interpretive within the meaning of section 654 of the
Ruling and Policy Statement (IRPS) 87– The OCC has determined that this Treasury and General Government
rule does not have any Federalism Appropriations Act, 1999, Public Law
2, as amended by IRPS 03–2. NCUA
implications, as required by Executive 105–277, 112 Stat. 2681 (1998).
conducted an initial regulatory
flexibility analysis in connection with Order 13132, because it would not have Plain Language Requirement
the proposed rule and did not receive substantial direct effects on the States,
on the relationship between the national Section 722 of the Gramm-Leach-
any comments on it. Bliley Act (GLB Act) (12 U.S.C. 4809),
government and the States, or on the
NCUA certified that the interim final distribution of power and requires the Federal banking agencies to
rule would not have a significant responsibilities among the various use plain language in all proposed and
economic impact on a substantial levels of government. final rules published after January 1,
number of small entities and, upon 2000. The proposed rule requested
further review, now also certifies that NCUA Executive Order 13132 comments on how the rule might be
the final rule will not have a significant Determination changed to reflect the requirements of
economic impact on a substantial Executive Order 13132 encourages GLB Act. No GLB Act comments were
number of small entities. The final rule independent regulatory agencies to received.
applies to all Federal credit unions that consider the impact of their actions on List of Subjects
obtain or use a consumer’s medical state and local interests. In adherence to
information in connection with credit fundamental federalism principles, the 12 CFR Part 41
determinations, regardless of credit NCUA, an independent regulatory Banks, banking, Consumer protection,
union size. The final rule creates agency as defined in 44 U.S.C. 3502(5), National banks, Reporting and
exceptions to the FACT Act’s voluntarily complies with the executive recordkeeping requirements.
prohibition against Federal credit order. The rule applies only to federally
unions obtaining and using such chartered credit unions and would not 12 CFR Part 222
information in connection with credit have substantial direct effects on the Banks, banking, Consumer protection,
determinations. Additionally, the final states, on the connection between the Credit, Fair Credit Reporting Act,
rule implements the FACT Act’s national government and the states, or Holding companies, Privacy, Reporting
restrictions on the sharing of medical on the distribution of power and and recordkeeping requirements, State
information among Federal credit union responsibilities among the various member banks.
affiliates, credit union service levels of government. The NCUA has
organizations (CUSOs), and includes determined that this rule does not 12 CFR Part 232
exceptions to permit the sharing of constitute a policy that has federalism Consumer protection, Credit, Fair
medical information in certain implications for purposes of the Credit Reporting Act, Privacy, Reporting
circumstances. executive order. and recordkeeping requirements.

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12 CFR Part 334 (i) Common ownership or common (2) Any other person that participates
Administrative practice and corporate control means a relationship as a creditor in a transaction involving
procedure, Bank deposit insurance, between two companies under which: a person described in paragraph (a)(1) of
(1) One company has, with respect to this section.
Banks, banking, Reporting and
the other company: (b) General prohibition on obtaining
recordkeeping requirements, Safety and
(i) Ownership, control, or power to or using medical information. (1) In
soundness.
vote 25 percent or more of the general. A creditor may not obtain or
12 CFR Part 571 outstanding shares of any class of voting use medical information pertaining to a
security of a company, directly or consumer in connection with any
Consumer protection, Credit, Fair
indirectly, or acting through one or determination of the consumer’s
Credit Reporting Act, Privacy, Reporting
more other persons; eligibility, or continued eligibility, for
and recordkeeping requirements,
(ii) Control in any manner over the credit, except as provided in this
Savings associations.
election of a majority of the directors, section.
12 CFR Part 717 trustees, or general partners (or (2) Definitions. (i) Credit has the same
individuals exercising similar functions) meaning as in section 702 of the Equal
Consumer protection, Credit unions,
of a company; or Credit Opportunity Act, 15 U.S.C.
Fair credit reporting, Medical
(iii) The power to exercise, directly or 1691a.
information, Privacy, Reporting and (ii) Creditor has the same meaning as
recordkeeping requirements. indirectly, a controlling influence over
the management or policies of a in section 702 of the Equal Credit
12 CFR Chapter I company, as the OCC determines; or Opportunity Act, 15 U.S.C. 1691a.
(2) Any other person has, with respect (iii) Eligibility, or continued eligibility,
Office of the Comptroller of the for credit means the consumer’s
Currency to both companies, a relationship
described in paragraphs (i)(1)(i)– qualification or fitness to receive, or
Authority and Issuance (i)(1)(iii) of this section. continue to receive, credit, including
(j) [Reserved] the terms on which credit is offered.
■ For the reasons set forth in the The term does not include:
(k) Medical information means:
preamble, the OCC amends Chapter I of (A) Any determination of the
(1) Information or data, whether oral
Title 12 of the Code of Federal consumer’s qualification or fitness for
or recorded, in any form or medium,
Regulations as follows: employment, insurance (other than a
created by or derived from a health care
provider or the consumer, that relates credit insurance product), or other non-
PART 41—FAIR CREDIT
to: credit products or services;
■ 1. Revise the authority citation for part (i) The past, present, or future (B) Authorizing, processing, or
41 to read as follows: physical, mental, or behavioral health or documenting a payment or transaction
condition of an individual; on behalf of the consumer in a manner
Authority: 12 U.S.C. 1 et seq., 24(Seventh),
93a, 481, 484, and 1818; 15 U.S.C. 1681a, (ii) The provision of health care to an that does not involve a determination of
1681b, 1681s, 1681w, 6801, and 6805. individual; or the consumer’s eligibility, or continued
(iii) The payment for the provision of eligibility, for credit; or
■ 2. Revise subpart A to read as follows: health care to an individual. (C) Maintaining or servicing the
(2) The term does not include: consumer’s account in a manner that
Subpart A—General Provisions (i) The age or gender of a consumer; does not involve a determination of the
§ 41.2 Examples. (ii) Demographic information about consumer’s eligibility, or continued
the consumer, including a consumer’s eligibility, for credit.
The examples in this part are not (c) Rule of construction for obtaining
exclusive. Compliance with an example, residence address or e-mail address;
(iii) Any other information about a and using unsolicited medical
to the extent applicable, constitutes information. (1) In general. A creditor
compliance with this part. Examples in consumer that does not relate to the
physical, mental, or behavioral health or does not obtain medical information in
a paragraph illustrate only the issue violation of the prohibition if it receives
described in the paragraph and do not condition of a consumer, including the
existence or value of any insurance medical information pertaining to a
illustrate any other issue that may arise consumer in connection with any
in this part. policy; or
(iv) Information that does not identify determination of the consumer’s
§ 41.3 Definitions. a specific consumer. eligibility, or continued eligibility, for
(l) Person means any individual, credit without specifically requesting
As used in this part, unless the medical information.
context requires otherwise: partnership, corporation, trust, estate
cooperative, association, government or (2) Use of unsolicited medical
(a) Act means the Fair Credit information. A creditor that receives
Reporting Act (15 U.S.C. 1681 et seq.). governmental subdivision or agency, or
other entity. unsolicited medical information in the
(b) Affiliate means any company that manner described in paragraph (c)(1) of
is related by common ownership or ■ 3. Add subpart D to read as follows:
this section may use that information in
common corporate control with another connection with any determination of
company. Subpart D—Medical Information
the consumer’s eligibility, or continued
(c) [Reserved] § 41.30 Obtaining or using medical eligibility, for credit to the extent the
(d) Company means any corporation, information in connection with a creditor can rely on at least one of the
limited liability company, business determination of eligibility for credit. exceptions in § 41.30(d) or (e).
trust, general or limited partnership, (a) Scope. This section applies to: (3) Examples. A creditor does not
association, or similar organization. (1) Any person that participates as a obtain medical information in violation
(e) Consumer means an individual. creditor in a transaction and that is a of the prohibition if, for example:
(f) [Reserved] national bank, a Federal branch or (i) In response to a general question
(g) [Reserved] agency of a foreign bank, and their regarding a consumer’s debts or
(h) [Reserved] respective subsidiaries; or expenses, the creditor receives

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information that the consumer owes a transaction involving the consolidation approve the application and extend
debt to a hospital. of medical debts. credit based on the amount and
(ii) In a conversation with the (ii) Examples of uses of medical repayment history of the outstanding
creditor’s loan officer, the consumer information consistent with the debt. The creditor, however, denies the
informs the creditor that the consumer exception. (A) A consumer includes on application because the consumer is
has a particular medical condition. an application for credit information indebted to a hospital. The creditor has
(iii) In connection with a consumer’s about two $20,000 debts. One debt is to used medical information, here the
application for an extension of credit, a hospital; the other debt is to a retailer. identity of the medical creditor, in a
the creditor requests a consumer report The creditor contacts the hospital and manner and to an extent that is less
from a consumer reporting agency and the retailer to verify the amount and favorable than it would use comparable
receives medical information in the payment status of the debts. The non-medical information.
consumer report furnished by the creditor learns that both debts are more (B) A consumer meets with a loan
agency even though the creditor did not than 90 days past due. Any two debts officer of a creditor to apply for a
specifically request medical information of this size that are more than 90 days mortgage loan. While filling out the loan
from the consumer reporting agency. past due would disqualify the consumer application, the consumer informs the
(d) Financial information exception under the creditor’s established loan officer orally that she has a
for obtaining and using medical underwriting criteria. The creditor potentially terminal disease. The
information. (1) In general. A creditor denies the application on the basis that consumer meets the creditor’s
may obtain and use medical information the consumer has a poor repayment established requirements for the
pertaining to a consumer in connection history on outstanding debts. The requested mortgage loan. The loan
with any determination of the creditor has used medical information officer recommends to the credit
consumer’s eligibility, or continued in a manner and to an extent no less committee that the consumer be denied
eligibility, for credit so long as: favorable than it would use comparable credit because the consumer has that
(i) The information is the type of non-medical information. disease. The credit committee follows
(B) A consumer indicates on an the loan officer’s recommendation and
information routinely used in making
application for a $200,000 mortgage denies the application because the
credit eligibility determinations, such as
loan that she receives $15,000 in long- consumer has a potentially terminal
information relating to debts, expenses,
term disability income each year from disease. The creditor has used medical
income, benefits, assets, collateral, or
her former employer and has no other information in a manner inconsistent
the purpose of the loan, including the
income. Annual income of $15,000, with the exception by taking into
use of proceeds;
regardless of source, would not be account the consumer’s physical,
(ii) The creditor uses the medical sufficient to support the requested mental, or behavioral health, condition,
information in a manner and to an amount of credit. The creditor denies or history, type of treatment, or
extent that is no less favorable than it the application on the basis that the prognosis as part of a determination of
would use comparable information that projected debt-to-income ratio of the eligibility or continued eligibility for
is not medical information in a credit consumer does not meet the creditor’s credit.
transaction; and underwriting criteria. The creditor has (C) A consumer who has an apparent
(iii) The creditor does not take the used medical information in a manner medical condition, such as a consumer
consumer’s physical, mental, or and to an extent that is no less favorable who uses a wheelchair or an oxygen
behavioral health, condition or history, than it would use comparable non- tank, meets with a loan officer to apply
type of treatment, or prognosis into medical information. for a home equity loan. The consumer
account as part of any such (C) A consumer includes on an meets the creditor’s established
determination. application for a $10,000 home equity requirements for the requested home
(2) Examples. (i) Examples of the loan that he has a $50,000 debt to a equity loan and the creditor typically
types of information routinely used in medical facility that specializes in does not require consumers to obtain a
making credit eligibility determinations. treating a potentially terminal disease. debt cancellation contract, debt
Paragraph (d)(1)(i) of this section The creditor contacts the medical suspension agreement, or credit
permits a creditor, for example, to facility to verify the debt and obtain the insurance product in connection with
obtain and use information about: repayment history and current status of such loans. However, based on the
(A) The dollar amount, repayment the loan. The creditor learns that the consumer’s apparent medical condition,
terms, repayment history, and similar debt is current. The applicant meets the the loan officer recommends to the
information regarding medical debts to income and other requirements of the credit committee that credit be extended
calculate, measure, or verify the creditor’s underwriting guidelines. The to the consumer only if the consumer
repayment ability of the consumer, the creditor grants the application. The obtains a debt cancellation contract,
use of proceeds, or the terms for creditor has used medical information debt suspension agreement, or credit
granting credit; in accordance with the exception. insurance product from a nonaffiliated
(B) The value, condition, and lien (iii) Examples of uses of medical third party. The credit committee agrees
status of a medical device that may information inconsistent with the with the loan officer’s recommendation.
serve as collateral to secure a loan; exception. (A) A consumer applies for The loan officer informs the consumer
(C) The dollar amount and continued $25,000 of credit and includes on the that the consumer must obtain a debt
eligibility for disability income, application information about a $50,000 cancellation contract, debt suspension
workers’ compensation income, or other debt to a hospital. The creditor contacts agreement, or credit insurance product
benefits related to health or a medical the hospital to verify the amount and from a nonaffiliated third party to
condition that is relied on as a source payment status of the debt, and learns qualify for the loan. The consumer
of repayment; or that the debt is current and that the obtains one of these products and the
(D) The identity of creditors to whom consumer has no delinquencies in her creditor approves the loan. The creditor
outstanding medical debts are owed in repayment history. If the existing debt has used medical information in a
connection with an application for were instead owed to a retail manner inconsistent with the exception
credit, including but not limited to, a department store, the creditor would by taking into account the consumer’s

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physical, mental, or behavioral health, triggering event for the provision of credit under the established loan
condition, or history, type of treatment, benefits under the contract or program for an elective surgical
or prognosis in setting conditions on the agreement; or procedure. The consumer indicates on
consumer’s eligibility for credit. (ix) To determine the consumer’s the application that the purpose of the
(e) Specific exceptions for obtaining eligibility for, the triggering of, or the loan is to finance an elective surgical
and using medical information. (1) In reactivation of a credit insurance procedure not eligible for funding under
general. A creditor may obtain and use product if a medical condition or event the guidelines of the established loan
medical information pertaining to a is a triggering event for the provision of program. The creditor may deny the
consumer in connection with any benefits under the product. consumer’s application because the
determination of the consumer’s (2) Example of determining eligibility purpose of the loan is not for a
eligibility, or continued eligibility, for for a special credit program or credit particular procedure funded by the
credit: assistance program. A not-for-profit established loan program.
(i) To determine whether the use of a organization establishes a credit (4) Examples of obtaining and using
power of attorney or legal representative assistance program pursuant to a written medical information at the request of
that is triggered by a medical condition plan that is designed to assist disabled the consumer. (i) If a consumer applies
or event is necessary and appropriate or veterans in purchasing homes by for a loan and specifically requests that
whether the consumer has the legal subsidizing the down payment for the the creditor consider the consumer’s
capacity to contract when a person home purchase mortgage loans of medical disability at the relevant time as
seeks to exercise a power of attorney or qualifying veterans. The organization an explanation for adverse payment
act as legal representative for a works through mortgage lenders and history information in his credit report,
consumer based on an asserted medical requires mortgage lenders to obtain the creditor may consider such medical
condition or event; medical information about the disability information in evaluating the
(ii) To comply with applicable of any consumer that seeks to qualify for consumer’s willingness and ability to
requirements of local, state, or Federal the program, use that information to repay the requested loan to
laws; verify the consumer’s eligibility for the accommodate the consumer’s particular
(iii) To determine, at the consumer’s program, and forward that information circumstances, consistent with safe and
request, whether the consumer qualifies to the organization. A consumer who is sound practices. The creditor may also
for a legally permissible special credit a veteran applies to a creditor for a decline to consider such medical
program or credit-related assistance home purchase mortgage loan. The information to accommodate the
program that is: creditor informs the consumer about the consumer, but may evaluate the
(A) Designed to meet the special credit assistance program for disabled consumer’s application in accordance
needs of consumers with medical veterans and the consumer seeks to with its otherwise applicable
conditions; and qualify for the program. Assuming that underwriting criteria. The creditor may
(B) Established and administered the program complies with all not deny the consumer’s application or
pursuant to a written plan that: applicable law, including applicable fair otherwise treat the consumer less
(1) Identifies the class of persons that lending laws, the creditor may obtain favorably because the consumer
the program is designed to benefit; and and use medical information about the specifically requested a medical
(2) Sets forth the procedures and medical condition and disability, if any, accommodation, if the creditor would
standards for extending credit or of the consumer to determine whether have extended the credit or treated the
providing other credit-related assistance the consumer qualifies for the credit consumer more favorably under the
under the program; assistance program. creditor’s otherwise applicable
(iv) To the extent necessary for (3) Examples of verifying the medical underwriting criteria.
purposes of fraud prevention or purpose of the loan or the use of (ii) If a consumer applies for a loan by
detection; proceeds. (i) If a consumer applies for telephone and explains that his income
(v) In the case of credit for the $10,000 of credit for the purpose of has been and will continue to be
purpose of financing medical products financing vision correction surgery, the interrupted on account of a medical
or services, to determine and verify the creditor may verify with the surgeon condition and that he expects to repay
medical purpose of a loan and the use that the procedure will be performed. If the loan by liquidating assets, the
of proceeds; the surgeon reports that surgery will not creditor may, but is not required to,
(vi) Consistent with safe and sound be performed on the consumer, the evaluate the application using the sale
practices, if the consumer or the creditor may use that medical of assets as the primary source of
consumer’s legal representative information to deny the consumer’s repayment, consistent with safe and
specifically requests that the creditor application for credit, because the loan sound practices, provided that the
use medical information in determining would not be used for the stated creditor documents the consumer’s
the consumer’s eligibility, or continued purpose. request by recording the oral
eligibility, for credit, to accommodate (ii) If a consumer applies for $10,000 conversation or making a notation of the
the consumer’s particular of credit for the purpose of financing request in the consumer’s file.
circumstances, and such request is cosmetic surgery, the creditor may (iii) If a consumer applies for a loan
documented by the creditor; confirm the cost of the procedure with and the application form provides a
(vii) Consistent with safe and sound the surgeon. If the surgeon reports that space where the consumer may provide
practices, to determine whether the the cost of the procedure is $5,000, the any other information or special
provisions of a forbearance practice or creditor may use that medical circumstances, whether medical or non-
program that is triggered by a medical information to offer the consumer only medical, that the consumer would like
condition or event apply to a consumer; $5,000 of credit. the creditor to consider in evaluating
(viii) To determine the consumer’s (iii) A creditor has an established the consumer’s application, the creditor
eligibility for, the triggering of, or the medical loan program for financing may use medical information provided
reactivation of a debt cancellation particular elective surgical procedures. by the consumer in that space on that
contract or debt suspension agreement if The creditor receives a loan application application to accommodate the
a medical condition or event is a from a consumer requesting $10,000 of consumer’s application for credit,

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consistent with safe and sound letter confirming this practice and the (4) For any purpose described in
practices, or may disregard that date on which the next payment will be section 502(e) of the Gramm-Leach-
information. due. The creditor has obtained and used Bliley Act;
(iv) If a consumer specifically requests medical information to determine (5) In connection with a
that the creditor use medical whether the provisions of a medically- determination of the consumer’s
information in determining the triggered forbearance practice or eligibility, or continued eligibility, for
consumer’s eligibility, or continued program apply to a consumer. credit consistent with § 41.30; or
eligibility, for credit and provides the (6) As otherwise permitted by order of
creditor with medical information for § 41.31 Limits on redisclosure of the OCC.
information.
that purpose, and the creditor
(a) Scope. This section applies to Board of Governors of the Federal
determines that it needs additional
national banks, Federal branches and Reserve System
information regarding the consumer’s
circumstances, the creditor may request, agencies of foreign banks, and their 12 CFR Chapter II
obtain, and use additional medical respective operating subsidiaries.
(b) Limits on redisclosure. If a person Authority and Issuance
information about the consumer as
necessary to verify the information described in paragraph (a) of this ■ For the reasons set forth in the joint
provided by the consumer or to section receives medical information preamble, Title 12, Chapter II, of the
determine whether to make an about a consumer from a consumer Code of Federal Regulations is amended
accommodation for the consumer. The reporting agency or its affiliate, the as follows:
consumer may decline to provide person must not disclose that
additional information, withdraw the information to any other person, except PART 222—FAIR CREDIT REPORTING
request for an accommodation, and have as necessary to carry out the purpose for (REGULATION V)
the application considered under the which the information was initially
disclosed, or as otherwise permitted by ■ 1. The authority citation for part 222
creditor’s otherwise applicable is revised to read as follows:
underwriting criteria. statute, regulation, or order.
(v) If a consumer completes and signs Authority: 15 U.S.C. 1681b and 1681s;
§ 41.32 Sharing medical information with Secs. 3, 214, and 217, Pub. L. 108–159, 117
a credit application that is not for affiliates. Stat. 1952.
medical purpose credit and the (a) Scope. This section applies to
application contains boilerplate ■ 2. Amend subpart A to part 222 by
national banks, Federal branches and adding §§ 222.2 and 222.3 to read as
language that routinely requests medical agencies of foreign banks, and their
information from the consumer or that follows:
respective operating subsidiaries.
indicates that by applying for credit the (b) In general. The exclusions from Subpart A—General Provisions
consumer authorizes or consents to the the term ‘‘consumer report’’ in section
creditor obtaining and using medical 603(d)(2) of the Act that allow the * * * * *
information in connection with a sharing of information with affiliates do
determination of the consumer’s § 222.2 Examples.
not apply if a person described in
eligibility, or continued eligibility, for paragraph (a) of this section The examples in this part are not
credit, the consumer has not specifically communicates to an affiliate: exclusive. Compliance with an example,
requested that the creditor obtain and (1) Medical information; to the extent applicable, constitutes
use medical information to (2) An individualized list or compliance with this part. Examples in
accommodate the consumer’s particular description based on the payment a paragraph illustrate only the issue
circumstances. transactions of the consumer for described in the paragraph and do not
(5) Example of a forbearance practice medical products or services; or illustrate any other issue that may arise
or program. After an appropriate safety (3) An aggregate list of identified in this part.
and soundness review, a creditor consumers based on payment
institutes a program that allows § 222.3 Definitions.
transactions for medical products or
consumers who are or will be services. As used in this part, unless the
hospitalized to defer payments as (c) Exceptions. A person described in context requires otherwise:
needed for up to three months, without paragraph (a) may rely on the exclusions (a) Act means the Fair Credit
penalty, if the credit account has been from the term ‘‘consumer report’’ in Reporting Act (15 U.S.C. 1681 et seq.).
open for more than one year and has not (b) Affiliate means any company that
section 603(d)(2) of the Act to
previously been in default, and the is related by common ownership or
communicate the information in
consumer provides confirming common corporate control with another
paragraph (b) to an affiliate:
documentation at an appropriate time. (1) In connection with the business of company.
A consumer is hospitalized and does (c) [Reserved]
insurance or annuities (including the (d) Company means any corporation,
not pay her bill for a particular month. activities described in section 18B of the limited liability company, business
This consumer has had a credit account model Privacy of Consumer Financial trust, general or limited partnership,
with the creditor for more than one year and Health Information Regulation association, or similar organization.
and has not previously been in default. issued by the National Association of (e) Consumer means an individual.
The creditor attempts to contact the Insurance Commissioners, as in effect (f) [Reserved]
consumer and speaks with the on January 1, 2003); (g) [Reserved]
consumer’s adult child, who is not the (2) For any purpose permitted without (h) [Reserved]
consumer’s legal representative. The authorization under the regulations (i) Common ownership or common
adult child informs the creditor that the promulgated by the Department of corporate control means a relationship
consumer is hospitalized and is unable Health and Human Services pursuant to between two companies under which:
to pay the bill at that time. The creditor the Health Insurance Portability and (1) One company has, with respect to
defers payments for up to three months, Accountability Act of 1996 (HIPAA); the other company:
without penalty, for the hospitalized (3) For any purpose referred to in (i) Ownership, control, or power to
consumer and sends the consumer a section 1179 of HIPAA; vote 25 percent or more of the

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outstanding shares of any class of voting (iii) A commercial lending company the consumer’s eligibility, or continued
security of a company, directly or owned or controlled by foreign banks; eligibility, for credit to the extent the
indirectly, or acting through one or (iv) An organization operating under creditor can rely on at least one of the
more other persons; section 25 or 25A of the Federal Reserve exceptions in § 222.30(d) or (e).
(ii) Control in any manner over the Act (12 U.S.C. 601 et seq., and 611 et (3) Examples. A creditor does not
election of a majority of the directors, seq.); obtain medical information in violation
trustees, or general partners (or (v) A bank holding company and an of the prohibition if, for example:
individuals exercising similar functions) affiliate of such holding company (other (i) In response to a general question
of a company; or than depository institutions and regarding a consumer’s debts or
(iii) The power to exercise, directly or consumer reporting agencies); or expenses, the creditor receives
indirectly, a controlling influence over (2) Any other person that participates information that the consumer owes a
the management or policies of a as a creditor in a transaction involving debt to a hospital.
company, as the Board determines; or a person described in paragraph (a)(1) of (ii) In a conversation with the
(2) Any other person has, with respect this section. creditor’s loan officer, the consumer
to both companies, a relationship (b) General prohibition on obtaining informs the creditor that the consumer
described in paragraphs (i)(1)(i) through or using medical information. (1) In has a particular medical condition.
(i)(1)(iii) of this section. general. A creditor may not obtain or (iii) In connection with a consumer’s
(j) [Reserved] use medical information pertaining to a application for an extension of credit,
(k) Medical information means: consumer in connection with any the creditor requests a consumer report
(1) Information or data, whether oral determination of the consumer’s from a consumer reporting agency and
or recorded, in any form or medium, eligibility, or continued eligibility, for receives medical information in the
created by or derived from a health care credit, except as provided in this consumer report furnished by the
provider or the consumer, that relates section. agency even though the creditor did not
to: (2) Definitions. (i) Credit has the same specifically request medical information
(i) The past, present, or future meaning as in section 702 of the Equal from the consumer reporting agency.
physical, mental, or behavioral health or Credit Opportunity Act, 15 U.S.C. (d) Financial information exception
condition of an individual; 1691a. for obtaining and using medical
(ii) The provision of health care to an (ii) Creditor has the same meaning as
information. (1) In general. A creditor
individual; or in section 702 of the Equal Credit
may obtain and use medical information
(iii) The payment for the provision of Opportunity Act, 15 U.S.C. 1691a.
(iii) Eligibility, or continued eligibility, pertaining to a consumer in connection
health care to an individual. with any determination of the
(2) The term does not include: for credit means the consumer’s
qualification or fitness to receive, or consumer’s eligibility, or continued
(i) The age or gender of a consumer; eligibility, for credit so long as:
(ii) Demographic information about continue to receive, credit, including
the terms on which credit is offered. (i) The information is the type of
the consumer, including a consumer’s information routinely used in making
residence address or e-mail address; The term does not include:
(A) Any determination of the credit eligibility determinations, such as
(iii) Any other information about a information relating to debts, expenses,
consumer that does not relate to the consumer’s qualification or fitness for
employment, insurance (other than a income, benefits, assets, collateral, or
physical, mental, or behavioral health or the purpose of the loan, including the
condition of a consumer, including the credit insurance product), or other non-
credit products or services; use of proceeds;
existence or value of any insurance (ii) The creditor uses the medical
policy; or (B) Authorizing, processing, or
documenting a payment or transaction information in a manner and to an
(iv) Information that does not identify extent that is no less favorable than it
a specific consumer. on behalf of the consumer in a manner
that does not involve a determination of would use comparable information that
(l) Person means any individual, is not medical information in a credit
partnership, corporation, trust, estate the consumer’s eligibility, or continued
eligibility, for credit; or transaction; and
cooperative, association, government or
(C) Maintaining or servicing the (iii) The creditor does not take the
governmental subdivision or agency, or
consumer’s account in a manner that consumer’s physical, mental, or
other entity.
does not involve a determination of the behavioral health, condition or history,
■ 3. Subpart D is added to part 222 to type of treatment, or prognosis into
consumer’s eligibility, or continued
read as follows: eligibility, for credit. account as part of any such
(c) Rule of construction for obtaining determination.
Subpart D—Medical Information
and using unsolicited medical (2) Examples. (i) Examples of the
§ 222.30 Obtaining or using medical information. (1) In general. A creditor types of information routinely used in
information in connection with a does not obtain medical information in making credit eligibility determinations.
determination of eligibility for credit. violation of the prohibition if it receives Paragraph (d)(1)(i) of this section
(a) Scope. This section applies to medical information pertaining to a permits a creditor, for example, to
(1) Any of the following that consumer in connection with any obtain and use information about:
participates as a creditor in a determination of the consumer’s (A) The dollar amount, repayment
transaction— eligibility, or continued eligibility, for terms, repayment history, and similar
(i) A bank that is a member of the credit without specifically requesting information regarding medical debts to
Federal Reserve System (other than medical information. calculate, measure, or verify the
national banks) and its subsidiaries; (2) Use of unsolicited medical repayment ability of the consumer, the
(ii) A branch or Agency of a foreign information. A creditor that receives use of proceeds, or the terms for
bank (other than Federal branches, unsolicited medical information in the granting credit;
Federal Agencies, and insured State manner described in paragraph (c)(1) of (B) The value, condition, and lien
branches of foreign banks) and its this section may use that information in status of a medical device that may
subsidiaries; connection with any determination of serve as collateral to secure a loan;

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(C) The dollar amount and continued $25,000 of credit and includes on the that the consumer must obtain a debt
eligibility for disability income, application information about a $50,000 cancellation contract, debt suspension
workers’ compensation income, or other debt to a hospital. The creditor contacts agreement, or credit insurance product
benefits related to health or a medical the hospital to verify the amount and from a nonaffiliated third party to
condition that is relied on as a source payment status of the debt, and learns qualify for the loan. The consumer
of repayment; or that the debt is current and that the obtains one of these products and the
(D) The identity of creditors to whom consumer has no delinquencies in her creditor approves the loan. The creditor
outstanding medical debts are owed in repayment history. If the existing debt has used medical information in a
connection with an application for were instead owed to a retail manner inconsistent with the exception
credit, including but not limited to, a department store, the creditor would by taking into account the consumer’s
transaction involving the consolidation approve the application and extend physical, mental, or behavioral health,
of medical debts. credit based on the amount and condition, or history, type of treatment,
(ii) Examples of uses of medical repayment history of the outstanding or prognosis in setting conditions on the
information consistent with the debt. The creditor, however, denies the consumer’s eligibility for credit.
exception. (A) A consumer includes on application because the consumer is (e) Specific exceptions for obtaining
an application for credit information indebted to a hospital. The creditor has and using medical information. (1) In
about two $20,000 debts. One debt is to used medical information, here the general. A creditor may obtain and use
a hospital; the other debt is to a retailer. identity of the medical creditor, in a medical information pertaining to a
The creditor contacts the hospital and manner and to an extent that is less consumer in connection with any
the retailer to verify the amount and favorable than it would use comparable determination of the consumer’s
payment status of the debts. The non-medical information. eligibility, or continued eligibility, for
creditor learns that both debts are more (B) A consumer meets with a loan credit—
than 90 days past due. Any two debts officer of a creditor to apply for a (i) To determine whether the use of a
of this size that are more than 90 days mortgage loan. While filling out the loan power of attorney or legal representative
past due would disqualify the consumer application, the consumer informs the that is triggered by a medical condition
under the creditor’s established loan officer orally that she has a or event is necessary and appropriate or
underwriting criteria. The creditor potentially terminal disease. The whether the consumer has the legal
denies the application on the basis that consumer meets the creditor’s capacity to contract when a person
the consumer has a poor repayment established requirements for the seeks to exercise a power of attorney or
history on outstanding debts. The requested mortgage loan. The loan act as legal representative for a
creditor has used medical information officer recommends to the credit consumer based on an asserted medical
in a manner and to an extent no less committee that the consumer be denied condition or event;
favorable than it would use comparable credit because the consumer has that (ii) To comply with applicable
non-medical information. disease. The credit committee follows requirements of local, state, or Federal
(B) A consumer indicates on an the loan officer’s recommendation and laws;
application for a $200,000 mortgage denies the application because the (iii) To determine, at the consumer’s
loan that she receives $15,000 in long- consumer has a potentially terminal request, whether the consumer qualifies
term disability income each year from disease. The creditor has used medical for a legally permissible special credit
her former employer and has no other information in a manner inconsistent program or credit-related assistance
income. Annual income of $15,000, with the exception by taking into program that is—
regardless of source, would not be account the consumer’s physical, (A) Designed to meet the special
sufficient to support the requested mental, or behavioral health, condition, needs of consumers with medical
amount of credit. The creditor denies or history, type of treatment, or conditions; and
the application on the basis that the prognosis as part of a determination of (B) Established and administered
projected debt-to-income ratio of the eligibility or continued eligibility for pursuant to a written plan that—
consumer does not meet the creditor’s credit. (1) Identifies the class of persons that
underwriting criteria. The creditor has (C) A consumer who has an apparent the program is designed to benefit; and
used medical information in a manner medical condition, such as a consumer (2) Sets forth the procedures and
and to an extent that is no less favorable who uses a wheelchair or an oxygen standards for extending credit or
than it would use comparable non- tank, meets with a loan officer to apply providing other credit-related assistance
medical information. for a home equity loan. The consumer under the program;
(C) A consumer includes on an meets the creditor’s established (iv) To the extent necessary for
application for a $10,000 home equity requirements for the requested home purposes of fraud prevention or
loan that he has a $50,000 debt to a equity loan and the creditor typically detection;
medical facility that specializes in does not require consumers to obtain a (v) In the case of credit for the
treating a potentially terminal disease. debt cancellation contract, debt purpose of financing medical products
The creditor contacts the medical suspension agreement, or credit or services, to determine and verify the
facility to verify the debt and obtain the insurance product in connection with medical purpose of a loan and the use
repayment history and current status of such loans. However, based on the of proceeds;
the loan. The creditor learns that the consumer’s apparent medical condition, (vi) Consistent with safe and sound
debt is current. The applicant meets the the loan officer recommends to the practices, if the consumer or the
income and other requirements of the credit committee that credit be extended consumer’s legal representative
creditor’s underwriting guidelines. The to the consumer only if the consumer specifically requests that the creditor
creditor grants the application. The obtains a debt cancellation contract, use medical information in determining
creditor has used medical information debt suspension agreement, or credit the consumer’s eligibility, or continued
in accordance with the exception. insurance product from a nonaffiliated eligibility, for credit, to accommodate
(iii) Examples of uses of medical third party. The credit committee agrees the consumer’s particular
information inconsistent with the with the loan officer’s recommendation. circumstances, and such request is
exception. (A) A consumer applies for The loan officer informs the consumer documented by the creditor;

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(vii) Consistent with safe and sound the surgeon. If the surgeon reports that space where the consumer may provide
practices, to determine whether the the cost of the procedure is $5,000, the any other information or special
provisions of a forbearance practice or creditor may use that medical circumstances, whether medical or non-
program that is triggered by a medical information to offer the consumer only medical, that the consumer would like
condition or event apply to a consumer; $5,000 of credit. the creditor to consider in evaluating
(viii) To determine the consumer’s (iii) A creditor has an established the consumer’s application, the creditor
eligibility for, the triggering of, or the medical loan program for financing may use medical information provided
reactivation of a debt cancellation particular elective surgical procedures. by the consumer in that space on that
contract or debt suspension agreement if The creditor receives a loan application application to accommodate the
a medical condition or event is a from a consumer requesting $10,000 of consumer’s application for credit,
triggering event for the provision of credit under the established loan consistent with safe and sound
benefits under the contract or program for an elective surgical practices, or may disregard that
agreement; or procedure. The consumer indicates on information.
(ix) To determine the consumer’s the application that the purpose of the (iv) If a consumer specifically requests
eligibility for, the triggering of, or the loan is to finance an elective surgical that the creditor use medical
reactivation of a credit insurance procedure not eligible for funding under information in determining the
product if a medical condition or event the guidelines of the established loan consumer’s eligibility, or continued
is a triggering event for the provision of program. The creditor may deny the eligibility, for credit and provides the
benefits under the product. consumer’s application because the creditor with medical information for
(2) Example of determining eligibility purpose of the loan is not for a that purpose, and the creditor
for a special credit program or credit particular procedure funded by the determines that it needs additional
assistance program. A not-for-profit established loan program. information regarding the consumer’s
organization establishes a credit (4) Examples of obtaining and using circumstances, the creditor may request,
assistance program pursuant to a written medical information at the request of obtain, and use additional medical
plan that is designed to assist disabled the consumer. (i) If a consumer applies information about the consumer as
veterans in purchasing homes by for a loan and specifically requests that necessary to verify the information
subsidizing the down payment for the the creditor consider the consumer’s provided by the consumer or to
home purchase mortgage loans of medical disability at the relevant time as determine whether to make an
qualifying veterans. The organization an explanation for adverse payment accommodation for the consumer. The
works through mortgage lenders and history information in his credit report, consumer may decline to provide
requires mortgage lenders to obtain the creditor may consider such medical additional information, withdraw the
medical information about the disability information in evaluating the request for an accommodation, and have
of any consumer that seeks to qualify for consumer’s willingness and ability to the application considered under the
the program, use that information to repay the requested loan to creditor’s otherwise applicable
verify the consumer’s eligibility for the accommodate the consumer’s particular underwriting criteria.
program, and forward that information circumstances, consistent with safe and (v) If a consumer completes and signs
to the organization. A consumer who is sound practices. The creditor may also a credit application that is not for
a veteran applies to a creditor for a decline to consider such medical medical purpose credit and the
home purchase mortgage loan. The information to accommodate the application contains boilerplate
creditor informs the consumer about the consumer, but may evaluate the language that routinely requests medical
credit assistance program for disabled consumer’s application in accordance information from the consumer or that
veterans and the consumer seeks to with its otherwise applicable indicates that by applying for credit the
qualify for the program. Assuming that underwriting criteria. The creditor may consumer authorizes or consents to the
the program complies with all not deny the consumer’s application or creditor obtaining and using medical
applicable law, including applicable fair otherwise treat the consumer less information in connection with a
lending laws, the creditor may obtain favorably because the consumer determination of the consumer’s
and use medical information about the specifically requested a medical eligibility, or continued eligibility, for
medical condition and disability, if any, accommodation, if the creditor would credit, the consumer has not specifically
of the consumer to determine whether have extended the credit or treated the requested that the creditor obtain and
the consumer qualifies for the credit consumer more favorably under the use medical information to
assistance program. creditor’s otherwise applicable accommodate the consumer’s particular
(3) Examples of verifying the medical underwriting criteria. circumstances.
purpose of the loan or the use of (ii) If a consumer applies for a loan by (5) Example of a forbearance practice
proceeds. (i) If a consumer applies for telephone and explains that his income or program. After an appropriate safety
$10,000 of credit for the purpose of has been and will continue to be and soundness review, a creditor
financing vision correction surgery, the interrupted on account of a medical institutes a program that allows
creditor may verify with the surgeon condition and that he expects to repay consumers who are or will be
that the procedure will be performed. If the loan by liquidating assets, the hospitalized to defer payments as
the surgeon reports that surgery will not creditor may, but is not required to, needed for up to three months, without
be performed on the consumer, the evaluate the application using the sale penalty, if the credit account has been
creditor may use that medical of assets as the primary source of open for more than one year and has not
information to deny the consumer’s repayment, consistent with safe and previously been in default, and the
application for credit, because the loan sound practices, provided that the consumer provides confirming
would not be used for the stated creditor documents the consumer’s documentation at an appropriate time.
purpose. request by recording the oral A consumer is hospitalized and does
(ii) If a consumer applies for $10,000 conversation or making a notation of the not pay her bill for a particular month.
of credit for the purpose of financing request in the consumer’s file. This consumer has had a credit account
cosmetic surgery, the creditor may (iii) If a consumer applies for a loan with the creditor for more than one year
confirm the cost of the procedure with and the application form provides a and has not previously been in default.

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The creditor attempts to contact the paragraph (a) of this section if that are subject to §§ 41.30, 222.30, 334.30,
consumer and speaks with the person communicates to an affiliate: 571.30, or 717.30.
consumer’s adult child, who is not the (1) Medical information; (b) In general. A creditor may not
consumer’s legal representative. The (2) An individualized list or obtain or use medical information
adult child informs the creditor that the description based on the payment pertaining to a consumer in connection
consumer is hospitalized and is unable transactions of the consumer for with any determination of the
to pay the bill at that time. The creditor medical products or services; or consumer’s eligibility, or continued
defers payments for up to three months, (3) An aggregate list of identified eligibility, for credit, except as provided
without penalty, for the hospitalized consumers based on payment in this section.
consumer and sends the consumer a transactions for medical products or (c) Definitions. (1) Consumer means
letter confirming this practice and the services. an individual.
date on which the next payment will be (c) Exceptions. A person described in (2) Credit has the same meaning as in
due. The creditor has obtained and used paragraph (a) of this section may rely on section 702 of the Equal Credit
medical information to determine the exclusions from the term ‘‘consumer Opportunity Act, 15 U.S.C. 1691a.
whether the provisions of a medically- report’’ in section 603(d)(2) of the Act to (3) Creditor has the same meaning as
triggered forbearance practice or communicate the information in in section 702 of the Equal Credit
program apply to a consumer. paragraph (b) of this section to an Opportunity Act, 15 U.S.C. 1691a.
affiliate: (4) Eligibility, or continued eligibility,
§ 222.31 Limits on redisclosure of (1) In connection with the business of for credit means the consumer’s
information. insurance or annuities (including the qualification or fitness to receive, or
(a) Scope. This section applies to activities described in section 18B of the continue to receive, credit, including
banks that are members of the Federal model Privacy of Consumer Financial the terms on which credit is offered.
Reserve System (other than national and Health Information Regulation The term does not include:
banks) and their respective operating (i) Any determination of the
issued by the National Association of
subsidiaries, branches and agencies of consumer’s qualification or fitness for
Insurance Commissioners, as in effect
foreign banks (other than Federal employment, insurance (other than a
on January 1, 2003);
branches, Federal Agencies, and insured credit insurance product), or other non-
(2) For any purpose permitted without
State branches of foreign banks), credit products or services;
authorization under the regulations
commercial lending companies owned (ii) Authorizing, processing, or
promulgated by the Department of documenting a payment or transaction
or controlled by foreign banks, Health and Human Services pursuant to
organizations operating under section on behalf of the consumer in a manner
the Health Insurance Portability and that does not involve a determination of
25 or 25A of the Federal Reserve Act (12 Accountability Act of 1996 (HIPAA); the consumer’s eligibility, or continued
U.S.C. 601 et seq., and 611 et seq.), and (3) For any purpose referred to in eligibility, for credit; or
bank holding companies and affiliates of section 1179 of HIPAA; (iii) Maintaining or servicing the
such holding companies (other than (4) For any purpose described in consumer’s account in a manner that
depository institutions and consumer section 502(e) of the Gramm-Leach- does not involve a determination of the
reporting agencies). Bliley Act; consumer’s eligibility, or continued
(b) Limits on redisclosure. If a person (5) In connection with a eligibility, for credit.
described in paragraph (a) of this determination of the consumer’s (5) Medical information means:
section receives medical information eligibility, or continued eligibility, for (i) Information or data, whether oral
about a consumer from a consumer credit consistent with § 222.30 of this or recorded, in any form or medium,
reporting agency or its affiliate, the part; or created by or derived from a health care
person must not disclose that (6) As otherwise permitted by order of provider or the consumer, that relates
information to any other person, except the Board. to—
as necessary to carry out the purpose for ■ 4. A new part 232 is added to read as (A) The past, present, or future
which the information was initially follows: physical, mental, or behavioral health or
disclosed, or as otherwise permitted by condition of an individual;
statute, regulation, or order. PART 232—OBTAINING AND USING (B) The provision of health care to an
MEDICAL INFORMATION IN individual; or
§ 222.32 Sharing medical information with
CONNECTION WITH CREDIT (C) The payment for the provision of
affiliates.
(REGULATION FF) health care to an individual.
(a) Scope. This section applies to (ii) The term does not include:
banks that are members of the Federal Sec. (A) The age or gender of a consumer;
Reserve System (other than national § 232.1 Scope, General Prohibition and (B) Demographic information about
banks) and their respective operating Definitions
the consumer, including a consumer’s
subsidiaries, branches and agencies of § 232.2 Rule of Construction for Obtaining
and Using Unsolicited Medical residence address or e-mail address;
foreign banks (other than Federal (C) Any other information about a
Information
branches, Federal Agencies, and insured § 232.3 Financial Information Exception for consumer that does not relate to the
State branches of foreign banks), Obtaining and Using Medical physical, mental, or behavioral health or
commercial lending companies owned Information condition of a consumer, including the
or controlled by foreign banks, § 232.4 Specific Exceptions for Obtaining existence or value of any insurance
organizations operating under section and Using Medical Information policy; or
25 or 25A of the Federal Reserve Act (12 Authority: 15 U.S.C. 1681b. (D) Information that does not identify
U.S.C. 601 et seq., and 611 et seq.). a specific consumer.
(b) In general. The exclusions from § 232.1 Scope, General Prohibition and (6) Person means any individual,
the term ‘‘consumer report’’ in section Definitions partnership, corporation, trust, estate
603(d)(2) of the Act that allow the (a) Scope. This part applies to cooperative, association, government or
sharing of information with affiliates do creditors, as defined in paragraph (c)(3) governmental subdivision or agency, or
not apply to a person described in of this section, except for creditors that other entity.

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§ 232.2 Rule of construction for obtaining (b) Examples. (1) Examples of the loan that he has a $50,000 debt to a
and using unsolicited medical information. types of information routinely used in medical facility that specializes in
(a) In general. A creditor does not making credit eligibility determinations. treating a potentially terminal disease.
obtain medical information in violation Paragraph (a)(1) of this section permits The creditor contacts the medical
of the prohibition if it receives medical a creditor, for example, to obtain and facility to verify the debt and obtain the
information pertaining to a consumer in use information about: repayment history and current status of
connection with any determination of (i) The dollar amount, repayment the loan. The creditor learns that the
the consumer’s eligibility, or continued terms, repayment history, and similar debt is current. The applicant meets the
eligibility, for credit without specifically information regarding medical debts to income and other requirements of the
requesting medical information. calculate, measure, or verify the creditor’s underwriting guidelines. The
(b) Use of unsolicited medical repayment ability of the consumer, the creditor grants the application. The
information. A creditor that receives use of proceeds, or the terms for creditor has used medical information
unsolicited medical information in the granting credit; in accordance with the exception.
manner described in paragraph (a) of (ii) The value, condition, and lien (3) Examples of uses of medical
this section may use that information in status of a medical device that may information inconsistent with the
connection with any determination of serve as collateral to secure a loan; exception. (i) A consumer applies for
the consumer’s eligibility, or continued (iii) The dollar amount and continued $25,000 of credit and includes on the
eligibility, for credit to the extent the eligibility for disability income, application information about a $50,000
creditor can rely on at least one of the workers’ compensation income, or other debt to a hospital. The creditor contacts
exceptions in § 232.3 or § 232.4. benefits related to health or a medical the hospital to verify the amount and
(c) Examples. A creditor does not condition that is relied on as a source payment status of the debt, and learns
obtain medical information in violation of repayment; or that the debt is current and that the
of the prohibition if, for example: (iv) The identity of creditors to whom consumer has no delinquencies in her
(1) In response to a general question outstanding medical debts are owed in repayment history. If the existing debt
regarding a consumer’s debts or connection with an application for were instead owed to a retail
expenses, the creditor receives credit, including but not limited to, a department store, the creditor would
information that the consumer owes a transaction involving the consolidation approve the application and extend
debt to a hospital. of medical debts. credit based on the amount and
(2) In a conversation with the (2) Examples of uses of medical repayment history of the outstanding
creditor’s loan officer, the consumer information consistent with the debt. The creditor, however, denies the
informs the creditor that the consumer exception. (i) A consumer includes on application because the consumer is
has a particular medical condition. an application for credit information indebted to a hospital. The creditor has
(3) In connection with a consumer’s about two $20,000 debts. One debt is to used medical information, here the
application for an extension of credit, a hospital; the other debt is to a retailer. identity of the medical creditor, in a
the creditor requests a consumer report The creditor contacts the hospital and manner and to an extent that is less
from a consumer reporting agency and the retailer to verify the amount and favorable than it would use comparable
receives medical information in the payment status of the debts. The non-medical information.
consumer report furnished by the creditor learns that both debts are more (ii) A consumer meets with a loan
agency even though the creditor did not than 90 days past due. Any two debts officer of a creditor to apply for a
specifically request medical information of this size that are more than 90 days mortgage loan. While filling out the loan
from the consumer reporting agency. past due would disqualify the consumer application, the consumer informs the
under the creditor’s established loan officer orally that she has a
§ 232.3 Financial information exception for underwriting criteria. The creditor potentially terminal disease. The
obtaining and using medical information. denies the application on the basis that consumer meets the creditor’s
(a) In general. A creditor may obtain the consumer has a poor repayment established requirements for the
and use medical information pertaining history on outstanding debts. The requested mortgage loan. The loan
to a consumer in connection with any creditor has used medical information officer recommends to the credit
determination of the consumer’s in a manner and to an extent no less committee that the consumer be denied
eligibility, or continued eligibility, for favorable than it would use comparable credit because the consumer has that
credit so long as: non-medical information. disease. The credit committee follows
(1) The information is the type of (ii) A consumer indicates on an the loan officer’s recommendation and
information routinely used in making application for a $200,000 mortgage denies the application because the
credit eligibility determinations, such as loan that she receives $15,000 in long- consumer has a potentially terminal
information relating to debts, expenses, term disability income each year from disease. The creditor has used medical
income, benefits, assets, collateral, or her former employer and has no other information in a manner inconsistent
the purpose of the loan, including the income. Annual income of $15,000, with the exception by taking into
use of proceeds; regardless of source, would not be account the consumer’s physical,
(2) The creditor uses the medical sufficient to support the requested mental, or behavioral health, condition,
information in a manner and to an amount of credit. The creditor denies or history, type of treatment, or
extent that is no less favorable than it the application on the basis that the prognosis as part of a determination of
would use comparable information that projected debt-to-income ratio of the eligibility or continued eligibility for
is not medical information in a credit consumer does not meet the creditor’s credit.
transaction; and underwriting criteria. The creditor has (iii) A consumer who has an apparent
(3) The creditor does not take the used medical information in a manner medical condition, such as a consumer
consumer’s physical, mental, or and to an extent that is no less favorable who uses a wheelchair or an oxygen
behavioral health, condition or history, than it would use comparable non- tank, meets with a loan officer to apply
type of treatment, or prognosis into medical information. for a home equity loan. The consumer
account as part of any such (iii) A consumer includes on an meets the creditor’s established
determination. application for a $10,000 home equity requirements for the requested home

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equity loan and the creditor typically (4) To the extent necessary for (c) Examples of verifying the medical
does not require consumers to obtain a purposes of fraud prevention or purpose of the loan or the use of
debt cancellation contract, debt detection; proceeds. (1) If a consumer applies for
suspension agreement, or credit (5) In the case of credit for the $10,000 of credit for the purpose of
insurance product in connection with purpose of financing medical products financing vision correction surgery, the
such loans. However, based on the or services, to determine and verify the creditor may verify with the surgeon
consumer’s apparent medical condition, medical purpose of a loan and the use that the procedure will be performed. If
the loan officer recommends to the of proceeds; the surgeon reports that surgery will not
credit committee that credit be extended (6) Consistent with safe and sound be performed on the consumer, the
to the consumer only if the consumer practices, if the consumer or the creditor may use that medical
obtains a debt cancellation contract, consumer’s legal representative information to deny the consumer’s
debt suspension agreement, or credit specifically requests that the creditor application for credit, because the loan
insurance product from a nonaffiliated use medical information in determining would not be used for the stated
third party. The credit committee agrees the consumer’s eligibility, or continued purpose.
with the loan officer’s recommendation. eligibility, for credit, to accommodate (2) If a consumer applies for $10,000
The loan officer informs the consumer the consumer’s particular of credit for the purpose of financing
that the consumer must obtain a debt circumstances, and such request is cosmetic surgery, the creditor may
cancellation contract, debt suspension documented by the creditor; confirm the cost of the procedure with
agreement, or credit insurance product (7) Consistent with safe and sound
the surgeon. If the surgeon reports that
from a nonaffiliated third party to practices, to determine whether the
the cost of the procedure is $5,000, the
qualify for the loan. The consumer provisions of a forbearance practice or
creditor may use that medical
obtains one of these products and the program that is triggered by a medical
information to offer the consumer only
creditor approves the loan. The creditor condition or event apply to a consumer;
(8) To determine the consumer’s $5,000 of credit.
has used medical information in a (3) A creditor has an established
eligibility for, the triggering of, or the
manner inconsistent with the exception medical loan program for financing
reactivation of a debt cancellation
by taking into account the consumer’s particular elective surgical procedures.
contract or debt suspension agreement if
physical, mental, or behavioral health, The creditor receives a loan application
a medical condition or event is a
condition, or history, type of treatment, triggering event for the provision of from a consumer requesting $10,000 of
or prognosis in setting conditions on the benefits under the contract or credit under the established loan
consumer’s eligibility for credit. agreement; or program for an elective surgical
(9) To determine the consumer’s procedure. The consumer indicates on
§ 232.4 Specific exceptions for obtaining
and using medical information. eligibility for, the triggering of, or the the application that the purpose of the
reactivation of a credit insurance loan is to finance an elective surgical
(a) In general. A creditor may obtain procedure not eligible for funding under
product if a medical condition or event
and use medical information pertaining the guidelines of the established loan
is a triggering event for the provision of
to a consumer in connection with any program. The creditor may deny the
benefits under the product.
determination of the consumer’s (b) Example of determining eligibility consumer’s application because the
eligibility, or continued eligibility, for for a special credit program or credit purpose of the loan is not for a
credit: assistance program. A not-for-profit particular procedure funded by the
(1) To determine whether the use of organization establishes a credit established loan program.
a power of attorney or legal assistance program pursuant to a written (d) Examples of obtaining and using
representative that is triggered by a plan that is designed to assist disabled medical information at the request of
medical condition or event is necessary veterans in purchasing homes by the consumer. (1) If a consumer applies
and appropriate or whether the subsidizing the down payment for the for a loan and specifically requests that
consumer has the legal capacity to home purchase mortgage loans of the creditor consider the consumer’s
contract when a person seeks to exercise qualifying veterans. The organization medical disability at the relevant time as
a power of attorney or act as legal works through mortgage lenders and an explanation for adverse payment
representative for a consumer based on requires mortgage lenders to obtain history information in his credit report,
an asserted medical condition or event; medical information about the disability the creditor may consider such medical
(2) To comply with applicable of any consumer that seeks to qualify for information in evaluating the
requirements of local, state, or Federal the program, use that information to consumer’s willingness and ability to
laws; verify the consumer’s eligibility for the repay the requested loan to
(3) To determine, at the consumer’s program, and forward that information accommodate the consumer’s particular
request, whether the consumer qualifies to the organization. A consumer who is circumstances, consistent with safe and
for a legally permissible special credit a veteran applies to a creditor for a sound practices. The creditor may also
program or credit-related assistance home purchase mortgage loan. The decline to consider such medical
program that is— creditor informs the consumer about the information to accommodate the
(i) Designed to meet the special needs credit assistance program for disabled consumer, but may evaluate the
of consumers with medical conditions; veterans and the consumer seeks to consumer’s application in accordance
and qualify for the program. Assuming that with its otherwise applicable
(ii) Established and administered the program complies with all underwriting criteria. The creditor may
pursuant to a written plan that— applicable law, including applicable fair not deny the consumer’s application or
(A) Identifies the class of persons that lending laws, the creditor may obtain otherwise treat the consumer less
the program is designed to benefit; and and use medical information about the favorably because the consumer
(B) Sets forth the procedures and medical condition and disability, if any, specifically requested a medical
standards for extending credit or of the consumer to determine whether accommodation, if the creditor would
providing other credit-related assistance the consumer qualifies for the credit have extended the credit or treated the
under the program; assistance program. consumer more favorably under the

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Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations 70685

creditor’s otherwise applicable accommodate the consumer’s particular § 334.3 Definitions.


underwriting criteria. circumstances. As used in this part, unless the
(2) If a consumer applies for a loan by (e) Example of a forbearance practice context requires otherwise:
telephone and explains that his income or program. After an appropriate safety (a) Act means the Fair Credit
has been and will continue to be and soundness review, a creditor Reporting Act (15 U.S.C. 1681 et seq.).
interrupted on account of a medical institutes a program that allows (b) Affiliate means any company that
condition and that he expects to repay consumers who are or will be is related by common ownership or
the loan liquidating assets, the creditor hospitalized to defer payments as common corporate control with another
may, but is not required to, evaluate the needed for up to three months, without company.
application using the sale of assets as penalty, if the credit account has been (c) [Reserved]
the primary source of repayment, open for more than one year and has not (d) Company means any corporation,
consistent with safe and sound previously been in default, and the limited liability company, business
practices, provided that the creditor consumer provides confirming trust, general or limited partnership,
documents the consumer’s request by documentation at an appropriate time. association, or similar organization.
recording the oral conversation or A consumer is hospitalized and does (e) Consumer means an individual.
making a notation of the request in the not pay her bill for a particular month. (f) [Reserved]
consumer’s file. This consumer has had a credit account (g) [Reserved]
(3) If a consumer applies for a loan with the creditor for more than one year (h) [Reserved]
and the application form provides a and has not previously been in default. (i) Common ownership or common
space where the consumer may provide The creditor attempts to contact the corporate control means a relationship
any other information or special consumer and speaks with the between two companies under which:
circumstances, whether medical or non- consumer’s adult child, who is not the (1) One company has, with respect to
medical, that the consumer would like consumer’s legal representative. The the other company:
the creditor to consider in evaluating adult child informs the creditor that the (i) Ownership, control, or power to
the consumer’s application, the creditor consumer is hospitalized and is unable vote 25 percent or more of the
may use medical information provided to pay the bill at that time. The creditor outstanding shares of any class of voting
by the consumer in that space on that defers payments for up to three months, security of a company, directly or
application to accommodate the without penalty, for the hospitalized indirectly, or acting through one or
consumer’s application for credit, consumer and sends the consumer a more other persons;
consistent with safe and sound letter confirming this practice and the (ii) Control in any manner over the
practices, or may disregard that date on which the next payment will be election of a majority of the directors,
information. due. The creditor has obtained and used trustees, or general partners (or
(4) If a consumer specifically requests individuals exercising similar functions)
medical information to determine
that the creditor use medical of a company; or
whether the provisions of a medically-
information in determining the (iii) The power to exercise, directly or
triggered forbearance practice or
consumer’s eligibility, or continued indirectly, a controlling influence over
program apply to a consumer.
eligibility, for credit and provides the the management or policies of a
creditor with medical information for Federal Deposit Insurance Corporation company, as the FDIC determines; or
that purpose, and the creditor (2) Any other person has, with respect
12 CFR Chapter III
determines that it needs additional to both companies, a relationship
information regarding the consumer’s Authority and Issuance described in paragraphs (i)(1)(i) through
circumstances, the creditor may request, (i)(1)(iii) of this section.
obtain, and use additional medical ■ For the reasons set forth in the joint
(j) [Reserved]
information about the consumer as preamble, the Federal Deposit Insurance
(k) Medical information means:
necessary to verify the information Corporation amends part 334 of chapter
(1) Information or data, whether oral
provided by the consumer or to III of title 12 of the Code of Federal
or recorded, in any form or medium,
determine whether to make an Regulations as follows:
created by or derived from a health care
accommodation for the consumer. The provider or the consumer, that relates
PART 334—FAIR CREDIT REPORTING
consumer may decline to provide to:
additional information, withdraw the ■ 1. The authority citation for part 334 (i) The past, present, or future
request for an accommodation, and have is revised to read as follows: physical, mental, or behavioral health or
the application considered under the Authority: 12 U.S.C. 1819(Tenth) and condition of an individual;
creditor’s otherwise applicable 1818; 15 U.S.C. 1681b and 1681s. (ii) The provision of health care to an
underwriting criteria. individual; or
(5) If a consumer completes and signs ■ 2. Subpart A is added to part 334 to (iii) The payment for the provision of
a credit application that is not for read as follows: health care to an individual.
medical purpose credit and the (2) The term does not include:
application contains boilerplate Subpart A—General Provisions (i) The age or gender of a consumer;
language that routinely requests medical § 334.1 [Reserved] (ii) Demographic information about
information from the consumer or that the consumer, including a consumer’s
indicates that by applying for credit the § 334.2 Examples. residence address or e-mail address;
consumer authorizes or consents to the The examples in this part are not (iii) Any other information about a
creditor obtaining and using medical exclusive. Compliance with an example, consumer that does not relate to the
information in connection with a to the extent applicable, constitutes physical, mental, or behavioral health or
determination of the consumer’s compliance with this part. Examples in condition of a consumer, including the
eligibility, or continued eligibility, for a paragraph illustrate only the issue existence or value of any insurance
credit, the consumer has not specifically described in the paragraph and do not policy; or
requested that the creditor obtain and illustrate any other issue that may arise (iv) Information that does not identify
use medical information to in this part. a specific consumer.

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70686 Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations

(l) Person means any individual, medical information pertaining to a permits a creditor, for example, to
partnership, corporation, trust, estate consumer in connection with any obtain and use information about:
cooperative, association, government or determination of the consumer’s (A) The dollar amount, repayment
governmental subdivision or agency, or eligibility, or continued eligibility, for terms, repayment history, and similar
other entity. credit without specifically requesting information regarding medical debts to
■ 3. Subpart D is added to part 334 to medical information. calculate, measure, or verify the
read as follows: (2) Use of unsolicited medical repayment ability of the consumer, the
information. A creditor that receives use of proceeds, or the terms for
Subpart D—Medical Information unsolicited medical information in the granting credit;
manner described in paragraph (c)(1) of (B) The value, condition, and lien
§ 334.30 Obtaining or using medical this section may use that information in status of a medical device that may
information in connection with a serve as collateral to secure a loan;
connection with any determination of
determination of eligibility for credit. (C) The dollar amount and continued
the consumer’s eligibility, or continued
(a) Scope. This section applies to: eligibility, for credit to the extent the eligibility for disability income,
(1) Any of the following that creditor can rely on at least one of the workers’ compensation income, or other
participates as a creditor in a exceptions in § 334.30(d) or (e). benefits related to health or a medical
transaction: (3) Examples. A creditor does not condition that is relied on as a source
(i) A State bank insured by the FDIC obtain medical information in violation of repayment; or
(other than members of the Federal of the prohibition if, for example: (D) The identity of creditors to whom
Reserve System); (i) In response to a general question outstanding medical debts are owed in
(ii) An insured State branch of a regarding a consumer’s debts or connection with an application for
foreign bank; or expenses, the creditor receives credit, including but not limited to, a
(2) Any other person that participates information that the consumer owes a transaction involving the consolidation
as a creditor in a transaction involving debt to a hospital. of medical debts.
a person described in paragraph (a)(1) of (ii) In a conversation with the (ii) Examples of uses of medical
this section. creditor’s loan officer, the consumer information consistent with the
(b) General prohibition on obtaining informs the creditor that the consumer exception. (A) A consumer includes on
or using medical information. (1) In has a particular medical condition. an application for credit information
general. A creditor may not obtain or (iii) In connection with a consumer’s about two $20,000 debts. One debt is to
use medical information pertaining to a application for an extension of credit, a hospital; the other debt is to a retailer.
consumer in connection with any the creditor requests a consumer report The creditor contacts the hospital and
determination of the consumer’s from a consumer reporting agency and the retailer to verify the amount and
eligibility, or continued eligibility, for receives medical information in the payment status of the debts. The
credit, except as provided in this consumer report furnished by the creditor learns that both debts are more
section. agency even though the creditor did not than 90 days past due. Any two debts
(2) Definitions. (i) Credit has the same specifically request medical information of this size that are more than 90 days
meaning as in section 702 of the Equal from the consumer reporting agency. past due would disqualify the consumer
Credit Opportunity Act, 15 U.S.C. (d) Financial information exception under the creditor’s established
1691a. for obtaining and using medical underwriting criteria. The creditor
(ii) Creditor has the same meaning as information. denies the application on the basis that
in section 702 of the Equal Credit (1) In general. A creditor may obtain the consumer has a poor repayment
Opportunity Act, 15 U.S.C. 1691a. and use medical information pertaining history on outstanding debts. The
(iii) Eligibility, or continued eligibility, to a consumer in connection with any creditor has used medical information
for credit means the consumer’s determination of the consumer’s in a manner and to an extent no less
qualification or fitness to receive, or eligibility, or continued eligibility, for favorable than it would use comparable
continue to receive, credit, including credit so long as: non-medical information.
the terms on which credit is offered. (i) The information is the type of (B) A consumer indicates on an
The term does not include: information routinely used in making application for a $200,000 mortgage
(A) Any determination of the credit eligibility determinations, such as loan that she receives $15,000 in long-
consumer’s qualification or fitness for information relating to debts, expenses, term disability income each year from
employment, insurance (other than a income, benefits, assets, collateral, or her former employer and has no other
credit insurance product), or other non- the purpose of the loan, including the income. Annual income of $15,000,
credit products or services; use of proceeds; regardless of source, would not be
(B) Authorizing, processing, or (ii) The creditor uses the medical sufficient to support the requested
documenting a payment or transaction information in a manner and to an amount of credit. The creditor denies
on behalf of the consumer in a manner extent that is no less favorable than it the application on the basis that the
that does not involve a determination of would use comparable information that projected debt-to-income ratio of the
the consumer’s eligibility, or continued is not medical information in a credit consumer does not meet the creditor’s
eligibility, for credit; or transaction; and underwriting criteria. The creditor has
(C) Maintaining or servicing the (iii) The creditor does not take the used medical information in a manner
consumer’s account in a manner that consumer’s physical, mental, or and to an extent that is no less favorable
does not involve a determination of the behavioral health, condition or history, than it would use comparable non-
consumer’s eligibility, or continued type of treatment, or prognosis into medical information.
eligibility, for credit. account as part of any such (C) A consumer includes on an
(c) Rule of construction for obtaining determination. application for a $10,000 home equity
and using unsolicited medical (2) Examples. (i) Examples of the loan that he has a $50,000 debt to a
information. (1) In general. A creditor types of information routinely used in medical facility that specializes in
does not obtain medical information in making credit eligibility determinations. treating a potentially terminal disease.
violation of the prohibition if it receives Paragraph (d)(1)(i) of this section The creditor contacts the medical

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facility to verify the debt and obtain the insurance product in connection with medical purpose of a loan and the use
repayment history and current status of such loans. However, based on the of proceeds;
the loan. The creditor learns that the consumer’s apparent medical condition, (vi) Consistent with safe and sound
debt is current. The applicant meets the the loan officer recommends to the practices, if the consumer or the
income and other requirements of the credit committee that credit be extended consumer’s legal representative
creditor’s underwriting guidelines. The to the consumer only if the consumer specifically requests that the creditor
creditor grants the application. The obtains a debt cancellation contract, use medical information in determining
creditor has used medical information debt suspension agreement, or credit the consumer’s eligibility, or continued
in accordance with the exception. insurance product from a nonaffiliated eligibility, for credit, to accommodate
(iii) Examples of uses of medical third party. The credit committee agrees the consumer’s particular
information inconsistent with the with the loan officer’s recommendation. circumstances, and such request is
exception. (A) A consumer applies for The loan officer informs the consumer documented by the creditor;
$25,000 of credit and includes on the that the consumer must obtain a debt (vii) Consistent with safe and sound
application information about a $50,000 cancellation contract, debt suspension practices, to determine whether the
debt to a hospital. The creditor contacts agreement, or credit insurance product provisions of a forbearance practice or
the hospital to verify the amount and from a nonaffiliated third party to program that is triggered by a medical
payment status of the debt, and learns qualify for the loan. The consumer condition or event apply to a consumer;
that the debt is current and that the obtains one of these products and the (viii) To determine the consumer’s
consumer has no delinquencies in her creditor approves the loan. The creditor eligibility for, the triggering of, or the
repayment history. If the existing debt has used medical information in a reactivation of a debt cancellation
were instead owed to a retail manner inconsistent with the exception contract or debt suspension agreement if
department store, the creditor would by taking into account the consumer’s a medical condition or event is a
approve the application and extend physical, mental, or behavioral health, triggering event for the provision of
credit based on the amount and condition, or history, type of treatment, benefits under the contract or
repayment history of the outstanding agreement; or
or prognosis in setting conditions on the
debt. The creditor, however, denies the (ix) To determine the consumer’s
consumer’s eligibility for credit.
application because the consumer is eligibility for, the triggering of, or the
(e) Specific exceptions for obtaining
indebted to a hospital. The creditor has reactivation of a credit insurance
and using medical information. (1) In
used medical information, here the product if a medical condition or event
general. A creditor may obtain and use
identity of the medical creditor, in a is a triggering event for the provision of
medical information pertaining to a
manner and to an extent that is less benefits under the product.
consumer in connection with any (2) Example of determining eligibility
favorable than it would use comparable determination of the consumer’s
non-medical information. for a special credit program or credit
eligibility, or continued eligibility, for assistance program. A not-for-profit
(B) A consumer meets with a loan credit:
officer of a creditor to apply for a organization establishes a credit
(i) To determine whether the use of a
mortgage loan. While filling out the loan assistance program pursuant to a written
power of attorney or legal representative plan that is designed to assist disabled
application, the consumer informs the that is triggered by a medical condition
loan officer orally that she has a veterans in purchasing homes by
or event is necessary and appropriate or subsidizing the down payment for the
potentially terminal disease. The whether the consumer has the legal
consumer meets the creditor’s home purchase mortgage loans of
capacity to contract when a person qualifying veterans. The organization
established requirements for the seeks to exercise a power of attorney or
requested mortgage loan. The loan works through mortgage lenders and
act as legal representative for a requires mortgage lenders to obtain
officer recommends to the credit consumer based on an asserted medical
committee that the consumer be denied medical information about the disability
condition or event; of any consumer that seeks to qualify for
credit because the consumer has that (ii) To comply with applicable
disease. The credit committee follows the program, use that information to
requirements of local, state, or Federal
the loan officer’s recommendation and verify the consumer’s eligibility for the
laws;
denies the application because the (iii) To determine, at the consumer’s program, and forward that information
consumer has a potentially terminal request, whether the consumer qualifies to the organization. A consumer who is
disease. The creditor has used medical for a legally permissible special credit a veteran applies to a creditor for a
information in a manner inconsistent program or credit-related assistance home purchase mortgage loan. The
with the exception by taking into program that is: creditor informs the consumer about the
account the consumer’s physical, (A) Designed to meet the special credit assistance program for disabled
mental, or behavioral health, condition, needs of consumers with medical veterans and the consumer seeks to
or history, type of treatment, or conditions; and qualify for the program. Assuming that
prognosis as part of a determination of (B) Established and administered the program complies with all
eligibility or continued eligibility for pursuant to a written plan that: applicable law, including applicable fair
credit. (1) Identifies the class of persons that lending laws, the creditor may obtain
(C) A consumer who has an apparent the program is designed to benefit; and and use medical information about the
medical condition, such as a consumer (2) Sets forth the procedures and medical condition and disability, if any,
who uses a wheelchair or an oxygen standards for extending credit or of the consumer to determine whether
tank, meets with a loan officer to apply providing other credit-related assistance the consumer qualifies for the credit
for a home equity loan. The consumer under the program; assistance program.
meets the creditor’s established (iv) To the extent necessary for (3) Examples of verifying the medical
requirements for the requested home purposes of fraud prevention or purpose of the loan or the use of
equity loan and the creditor typically detection; proceeds. (i) If a consumer applies for
does not require consumers to obtain a (v) In the case of credit for the $10,000 of credit for the purpose of
debt cancellation contract, debt purpose of financing medical products financing vision correction surgery, the
suspension agreement, or credit or services, to determine and verify the creditor may verify with the surgeon

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that the procedure will be performed. If the loan by liquidating assets, the hospitalized to defer payments as
the surgeon reports that surgery will not creditor may, but is not required to, needed for up to three months, without
be performed on the consumer, the evaluate the application using the sale penalty, if the credit account has been
creditor may use that medical of assets as the primary source of open for more than one year and has not
information to deny the consumer’s repayment, consistent with safe and previously been in default, and the
application for credit, because the loan sound practices, provided that the consumer provides confirming
would not be used for the stated creditor documents the consumer’s documentation at an appropriate time.
purpose. request by recording the oral A consumer is hospitalized and does
(ii) If a consumer applies for $10,000 conversation or making a notation of the not pay her bill for a particular month.
of credit for the purpose of financing request in the consumer’s file. This consumer has had a credit account
cosmetic surgery, the creditor may (iii) If a consumer applies for a loan with the creditor for more than one year
confirm the cost of the procedure with and the application form provides a and has not previously been in default.
the surgeon. If the surgeon reports that space where the consumer may provide The creditor attempts to contact the
the cost of the procedure is $5,000, the any other information or special consumer and speaks with the
creditor may use that medical circumstances, whether medical or non- consumer’s adult child, who is not the
information to offer the consumer only medical, that the consumer would like consumer’s legal representative. The
$5,000 of credit. the creditor to consider in evaluating adult child informs the creditor that the
(iii) A creditor has an established the consumer’s application, the creditor consumer is hospitalized and is unable
medical loan program for financing may use medical information provided to pay the bill at that time. The creditor
particular elective surgical procedures. by the consumer in that space on that defers payments for up to three months,
The creditor receives a loan application application to accommodate the without penalty, for the hospitalized
from a consumer requesting $10,000 of consumer’s application for credit, consumer and sends the consumer a
credit under the established loan consistent with safe and sound letter confirming this practice and the
program for an elective surgical practices, or may disregard that date on which the next payment will be
procedure. The consumer indicates on information. due. The creditor has obtained and used
the application that the purpose of the (iv) If a consumer specifically requests medical information to determine
loan is to finance an elective surgical that the creditor use medical whether the provisions of a medically-
procedure not eligible for funding under information in determining the triggered forbearance practice or
the guidelines of the established loan consumer’s eligibility, or continued program apply to a consumer.
program. The creditor may deny the eligibility, for credit and provides the
consumer’s application because the creditor with medical information for § 334.31 Limits on redisclosure of
purpose of the loan is not for a that purpose, and the creditor information.
particular procedure funded by the determines that it needs additional (a) Scope. This section applies to
established loan program. information regarding the consumer’s State banks insured by the FDIC (other
(4) Examples of obtaining and using circumstances, the creditor may request, than members of the Federal Reserve
medical information at the request of obtain, and use additional medical System) and insured State branches of
the consumer. (i) If a consumer applies information about the consumer as foreign banks.
for a loan and specifically requests that necessary to verify the information
the creditor consider the consumer’s (b) Limits on redisclosure. If a person
provided by the consumer or to
medical disability at the relevant time as described in paragraph (a) of this
determine whether to make an
an explanation for adverse payment section receives medical information
accommodation for the consumer. The
history information in his credit report, about a consumer from a consumer
consumer may decline to provide
the creditor may consider such medical reporting agency or its affiliate, the
additional information, withdraw the
information in evaluating the request for an accommodation, and have person must not disclose that
consumer’s willingness and ability to the application considered under the information to any other person, except
repay the requested loan to creditor’s otherwise applicable as necessary to carry out the purpose for
accommodate the consumer’s particular underwriting criteria. which the information was initially
circumstances, consistent with safe and (v) If a consumer completes and signs disclosed, or as otherwise permitted by
sound practices. The creditor may also a credit application that is not for statute, regulation, or order.
decline to consider such medical medical purpose credit and the § 334.32 Sharing medical information with
information to accommodate the application contains boilerplate affiliates.
consumer, but may evaluate the language that routinely requests medical
(a) Scope. This section applies to
consumer’s application in accordance information from the consumer or that
State banks insured by the FDIC (other
with its otherwise applicable indicates that by applying for credit the
than members of the Federal Reserve
underwriting criteria. The creditor may consumer authorizes or consents to the
System) and insured State branches of
not deny the consumer’s application or creditor obtaining and using medical
foreign banks.
otherwise treat the consumer less information in connection with a
favorably because the consumer determination of the consumer’s (b) In general. The exclusions from
specifically requested a medical eligibility, or continued eligibility, for the term ‘‘consumer report’’ in section
accommodation, if the creditor would credit, the consumer has not specifically 603(d)(2) of the Act that allow the
have extended the credit or treated the requested that the creditor obtain and sharing of information with affiliates do
consumer more favorably under the use medical information to not apply if a person described in
creditor’s otherwise applicable accommodate the consumer’s particular paragraph (a) of this section
underwriting criteria. circumstances. communicates to an affiliate—
(ii) If a consumer applies for a loan by (5) Example of a forbearance practice (1) Medical information;
telephone and explains that his income or program. After an appropriate safety (2) An individualized list or
has been and will continue to be and soundness review, a creditor description based on the payment
interrupted on account of a medical institutes a program that allows transactions of the consumer for
condition and that he expects to repay consumers who are or will be medical products or services; or

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(3) An aggregate list of identified Insurance Corporation (and federal (ii) The provision of health care to an
consumers based on payment savings association operating individual; or
transactions for medical products or subsidiaries in accordance with (iii) The payment for the provision of
services. § 559.3(h)(1) of this chapter). health care to an individual.
(c) Exceptions. A person described in ■ 3. Add § 571.2 to read as follows: (2) The term does not include:
paragraph (a) of this section may rely on (i) The age or gender of a consumer;
the exclusions from the term ‘‘consumer § 571.2 Examples. (ii) Demographic information about
report’’ in section 603(d)(2) of the Act to The examples in this part are not the consumer, including a consumer’s
communicate the information in exclusive. Compliance with an example, residence address or e-mail address;
paragraph (b) of this section to an to the extent applicable, constitutes (iii) Any other information about a
affiliate— compliance with this part. Examples in consumer that does not relate to the
(1) In connection with the business of a paragraph illustrate only the issue physical, mental, or behavioral health or
insurance or annuities (including the described in the paragraph and do not condition of a consumer, including the
activities described in section 18B of the illustrate any other issue that may arise existence or value of any insurance
model Privacy of Consumer Financial in this part. policy; or
and Health Information Regulation ■ 4. Amend § 571.3 by revising the (iv) Information that does not identify
issued by the National Association of introductory text and paragraphs (a) a specific consumer.
Insurance Commissioners, as in effect through (n) to read as follows: (l) Person means any individual,
on January 1, 2003); partnership, corporation, trust, estate
§ 571.3 Definitions.
(2) For any purpose permitted without cooperative, association, government or
authorization under the regulations As used in this part, unless the governmental subdivision or agency, or
promulgated by the Department of context requires otherwise: other entity.
Health and Human Services pursuant to (a) Act means the Fair Credit (m)–(n) [Reserved]
the Health Insurance Portability and Reporting Act (15 U.S.C. 1681 et seq.).
(b) Affiliate means any company that * * * * *
Accountability Act of 1996 (HIPAA); ■ 5. Add subpart D to part 571 to read
(3) For any purpose referred to in is related by common ownership or
as follows:
section 1179 of HIPAA; common corporate control with another
(4) For any purpose described in company. Subpart D—Medical Information
section 502(e) of the Gramm-Leach- (c) [Reserved]
Bliley Act; (d) Company means any corporation, § 571.30 Obtaining or using medical
limited liability company, business information in connection with a
(5) In connection with a determination of eligibility for credit.
determination of the consumer’s trust, general or limited partnership,
eligibility, or continued eligibility, for association, or similar organization. (a) Scope. This section applies to:
credit consistent with § 334.30; or (e) Consumer means an individual. (1) Any of the following that
(6) As otherwise permitted by order of (f)–(h) [Reserved] participates as a creditor in a
the FDIC. (i) Common ownership or common transaction—
corporate control means a relationship (i) A savings association;
Office of Thrift Supervision between two companies under which: (ii) A subsidiary owned in whole or
12 CFR Chapter V. (1) One company has, with respect to in part by a savings association;
the other company: (iii) A savings and loan holding
Authority and Issuance (i) Ownership, control, or power to company;
■ For the reasons set forth in the joint vote 25 percent or more of the (iv) A subsidiary of a savings and loan
preamble, the Office of Thrift outstanding shares of any class of voting holding company other than a bank or
Supervision amends chapter V of title security of a company, directly or subsidiary of a bank; or
12 of the Code of Federal Regulations as indirectly, or acting through one or (v) A service corporation owned in
follows: more other persons; whole or in part by a savings
(ii) Control in any manner over the association; or
PART 571—FAIR CREDIT REPORTING election of a majority of the directors, (2) Any other person that participates
trustees, or general partners (or as a creditor in a transaction involving
■ 1. The authority citation for part 571 individuals exercising similar functions) a person described in paragraph (a)(1) of
is revised to read as follows: of a company; or this section.
Authority: 12 U.S.C. 1462a, 1463, 1464, (iii) The power to exercise, directly or (b) General prohibition on obtaining
1467a, 1828, 1831p–1, and 1881–1884; 15 indirectly, a controlling influence over or using medical information. (1) In
U.S.C. 1681b, 1681s, and 1681w; 15 U.S.C. the management or policies of a general. A creditor may not obtain or
6801 and 6805(b)(1). company, as the OTS determines; or use medical information pertaining to a
(2) Any other person has, with respect consumer in connection with any
Subpart A—General Provisions to both companies, a relationship determination of the consumer’s
■ 2. Revise § 571.1(b) to read as follows: described in paragraphs (i)(1)(i) through eligibility, or continued eligibility, for
(i)(1)(iii) of this section. credit, except as provided in this
§ 571.1 Purpose and Scope. (j) [Reserved] section.
* * * * * (k) Medical information means: (2) Definitions. (i) Credit has the same
(b) Scope. (1)–(3) [Reserved] (1) Information or data, whether oral meaning as in section 702 of the Equal
(4) The scope of Subpart D of this part or recorded, in any form or medium, Credit Opportunity Act, 15 U.S.C.
is stated in §§ 571.30(a), 571.31(a), and created by or derived from a health care 1691a.
571.32(a) of this part. provider or the consumer, that relates (ii) Creditor has the same meaning as
(5)–(8) [Reserved] to— in section 702 of the Equal Credit
(9) Subpart I of this part applies to (i) The past, present, or future Opportunity Act, 15 U.S.C. 1691a.
savings associations whose deposits are physical, mental, or behavioral health or (iii) Eligibility, or continued eligibility,
insured by the Federal Deposit condition of an individual; for credit means the consumer’s

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qualification or fitness to receive, or consumer’s eligibility, or continued favorable than it would use comparable
continue to receive, credit, including eligibility, for credit so long as: non-medical information.
the terms on which credit is offered. (i) The information is the type of (B) A consumer indicates on an
The term does not include: information routinely used in making application for a $200,000 mortgage
(A) Any determination of the credit eligibility determinations, such as loan that she receives $15,000 in long-
consumer’s qualification or fitness for information relating to debts, expenses, term disability income each year from
employment, insurance (other than a income, benefits, assets, collateral, or her former employer and has no other
credit insurance product), or other non- the purpose of the loan, including the income. Annual income of $15,000,
credit products or services; use of proceeds; regardless of source, would not be
(B) Authorizing, processing, or (ii) The creditor uses the medical sufficient to support the requested
documenting a payment or transaction information in a manner and to an amount of credit. The creditor denies
on behalf of the consumer in a manner extent that is no less favorable than it the application on the basis that the
that does not involve a determination of would use comparable information that projected debt-to-income ratio of the
the consumer’s eligibility, or continued is not medical information in a credit consumer does not meet the creditor’s
eligibility, for credit; or transaction; and underwriting criteria. The creditor has
(C) Maintaining or servicing the (iii) The creditor does not take the used medical information in a manner
consumer’s account in a manner that consumer’s physical, mental, or and to an extent that is no less favorable
does not involve a determination of the behavioral health, condition or history, than it would use comparable non-
consumer’s eligibility, or continued type of treatment, or prognosis into medical information.
eligibility, for credit. account as part of any such (C) A consumer includes on an
(c) Rule of construction for obtaining determination. application for a $10,000 home equity
(2) Examples. (i) Examples of the loan that he has a $50,000 debt to a
and using unsolicited medical
types of information routinely used in medical facility that specializes in
information. (1) In general. A creditor
making credit eligibility determinations. treating a potentially terminal disease.
does not obtain medical information in
Paragraph (d)(1)(i) of this section The creditor contacts the medical
violation of the prohibition if it receives
permits a creditor, for example, to facility to verify the debt and obtain the
medical information pertaining to a
obtain and use information about: repayment history and current status of
consumer in connection with any (A) The dollar amount, repayment the loan. The creditor learns that the
determination of the consumer’s terms, repayment history, and similar debt is current. The applicant meets the
eligibility, or continued eligibility, for information regarding medical debts to income and other requirements of the
credit without specifically requesting calculate, measure, or verify the creditor’s underwriting guidelines. The
medical information. repayment ability of the consumer, the creditor grants the application. The
(2) Use of unsolicited medical use of proceeds, or the terms for creditor has used medical information
information. A creditor that receives granting credit; in accordance with the exception.
unsolicited medical information in the (B) The value, condition, and lien (iii) Examples of uses of medical
manner described in paragraph (c)(1) of status of a medical device that may information inconsistent with the
this section may use that information in serve as collateral to secure a loan; exception. (A) A consumer applies for
connection with any determination of (C) The dollar amount and continued $25,000 of credit and includes on the
the consumer’s eligibility, or continued eligibility for disability income, application information about a $50,000
eligibility, for credit to the extent the workers’ compensation income, or other debt to a hospital. The creditor contacts
creditor can rely on at least one of the benefits related to health or a medical the hospital to verify the amount and
exceptions in § 571.30(d) or (e). condition that is relied on as a source payment status of the debt, and learns
(3) Examples. A creditor does not of repayment; or that the debt is current and that the
obtain medical information in violation (D) The identity of creditors to whom consumer has no delinquencies in her
of the prohibition if, for example: outstanding medical debts are owed in repayment history. If the existing debt
(i) In response to a general question connection with an application for were instead owed to a retail
regarding a consumer’s debts or credit, including but not limited to, a department store, the creditor would
expenses, the creditor receives transaction involving the consolidation approve the application and extend
information that the consumer owes a of medical debts. credit based on the amount and
debt to a hospital; (ii) Examples of uses of medical repayment history of the outstanding
(ii) In a conversation with the information consistent with the debt. The creditor, however, denies the
creditor’s loan officer, the consumer exception. (A) A consumer includes on application because the consumer is
informs the creditor that the consumer an application for credit information indebted to a hospital. The creditor has
has a particular medical condition; or about two $20,000 debts. One debt is to used medical information, here the
(iii) In connection with a consumer’s a hospital; the other debt is to a retailer. identity of the medical creditor, in a
application for an extension of credit, The creditor contacts the hospital and manner and to an extent that is less
the creditor requests a consumer report the retailer to verify the amount and favorable than it would use comparable
from a consumer reporting agency and payment status of the debts. The non-medical information.
receives medical information in the creditor learns that both debts are more (B) A consumer meets with a loan
consumer report furnished by the than 90 days past due. Any two debts officer of a creditor to apply for a
agency even though the creditor did not of this size that are more than 90 days mortgage loan. While filling out the loan
specifically request medical information past due would disqualify the consumer application, the consumer informs the
from the consumer reporting agency. under the creditor’s established loan officer orally that she has a
(d) Financial information exception underwriting criteria. The creditor potentially terminal disease. The
for obtaining and using medical denies the application on the basis that consumer meets the creditor’s
information. (1) In general. A creditor the consumer has a poor repayment established requirements for the
may obtain and use medical information history on outstanding debts. The requested mortgage loan. The loan
pertaining to a consumer in connection creditor has used medical information officer recommends to the credit
with any determination of the in a manner and to an extent no less committee that the consumer be denied

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Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations 70691

credit because the consumer has that (ii) To comply with applicable of any consumer that seeks to qualify for
disease. The credit committee follows requirements of local, state, or federal the program, use that information to
the loan officer’s recommendation and laws; verify the consumer’s eligibility for the
denies the application because the (iii) To determine, at the consumer’s program, and forward that information
consumer has a potentially terminal request, whether the consumer qualifies to the organization. A consumer who is
disease. The creditor has used medical for a legally permissible special credit a veteran applies to a creditor for a
information in a manner inconsistent program or credit-related assistance home purchase mortgage loan. The
with the exception by taking into program that is— creditor informs the consumer about the
account the consumer’s physical, (A) Designed to meet the special credit assistance program for disabled
mental, or behavioral health, condition, needs of consumers with medical veterans and the consumer seeks to
or history, type of treatment, or conditions; and qualify for the program. Assuming that
prognosis as part of a determination of (B) Established and administered the program complies with all
eligibility or continued eligibility for pursuant to a written plan that— applicable law, including applicable fair
credit. (1) Identifies the class of persons that lending laws, the creditor may obtain
(C) A consumer who has an apparent the program is designed to benefit; and and use medical information about the
medical condition, such as a consumer (2) Sets forth the procedures and medical condition and disability, if any,
who uses a wheelchair or an oxygen standards for extending credit or of the consumer to determine whether
tank, meets with a loan officer to apply providing other credit-related assistance the consumer qualifies for the credit
for a home equity loan. The consumer under the program; assistance program.
meets the creditor’s established (iv) To the extent necessary for (3) Examples of verifying the medical
requirements for the requested home purposes of fraud prevention or purpose of the loan or the use of
equity loan and the creditor typically detection; proceeds. (i) If a consumer applies for
does not require consumers to obtain a (v) In the case of credit for the $10,000 of credit for the purpose of
debt cancellation contract, debt purpose of financing medical products financing vision correction surgery, the
suspension agreement, or credit or services, to determine and verify the creditor may verify with the surgeon
insurance product in connection with medical purpose of a loan and the use that the procedure will be performed. If
such loans. However, based on the of proceeds; the surgeon reports that surgery will not
consumer’s apparent medical condition, (vi) Consistent with safe and sound be performed on the consumer, the
the loan officer recommends to the practices, if the consumer or the creditor may use that medical
credit committee that credit be extended consumer’s legal representative information to deny the consumer’s
to the consumer only if the consumer specifically requests that the creditor application for credit, because the loan
obtains a debt cancellation contract, use medical information in determining would not be used for the stated
debt suspension agreement, or credit the consumer’s eligibility, or continued purpose.
insurance product from a nonaffiliated eligibility, for credit, to accommodate (ii) If a consumer applies for $10,000
third party. The credit committee agrees the consumer’s particular of credit for the purpose of financing
with the loan officer’s recommendation. circumstances, and such request is cosmetic surgery, the creditor may
The loan officer informs the consumer documented by the creditor; confirm the cost of the procedure with
that the consumer must obtain a debt (vii) Consistent with safe and sound the surgeon. If the surgeon reports that
cancellation contract, debt suspension practices, to determine whether the the cost of the procedure is $5,000, the
agreement, or credit insurance product provisions of a forbearance practice or creditor may use that medical
from a nonaffiliated third party to program that is triggered by a medical information to offer the consumer only
qualify for the loan. The consumer condition or event apply to a consumer; $5,000 of credit.
obtains one of these products and the (viii) To determine the consumer’s (iii) A creditor has an established
creditor approves the loan. The creditor eligibility for, the triggering of, or the medical loan program for financing
has used medical information in a reactivation of a debt cancellation particular elective surgical procedures.
manner inconsistent with the exception contract or debt suspension agreement if The creditor receives a loan application
by taking into account the consumer’s a medical condition or event is a from a consumer requesting $10,000 of
physical, mental, or behavioral health, triggering event for the provision of credit under the established loan
condition, or history, type of treatment, benefits under the contract or program for an elective surgical
or prognosis in setting conditions on the agreement; or procedure. The consumer indicates on
consumer’s eligibility for credit. (ix) To determine the consumer’s the application that the purpose of the
(e) Specific exceptions for obtaining eligibility for, the triggering of, or the loan is to finance an elective surgical
and using medical information. (1) In reactivation of a credit insurance procedure not eligible for funding under
general. A creditor may obtain and use product if a medical condition or event the guidelines of the established loan
medical information pertaining to a is a triggering event for the provision of program. The creditor may deny the
consumer in connection with any benefits under the product. consumer’s application because the
determination of the consumer’s (2) Example of determining eligibility purpose of the loan is not for a
eligibility, or continued eligibility, for for a special credit program or credit particular procedure funded by the
credit— assistance program. A not-for-profit established loan program.
(i) To determine whether the use of a organization establishes a credit (4) Examples of obtaining and using
power of attorney or legal representative assistance program pursuant to a written medical information at the request of
that is triggered by a medical condition plan that is designed to assist disabled the consumer. (i) If a consumer applies
or event is necessary and appropriate or veterans in purchasing homes by for a loan and specifically requests that
whether the consumer has the legal subsidizing the down payment for the the creditor consider the consumer’s
capacity to contract when a person home purchase mortgage loans of medical disability at the relevant time as
seeks to exercise a power of attorney or qualifying veterans. The organization an explanation for adverse payment
act as legal representative for a works through mortgage lenders and history information in his credit report,
consumer based on an asserted medical requires mortgage lenders to obtain the creditor may consider such medical
condition or event; medical information about the disability information in evaluating the

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consumer’s willingness and ability to the application considered under the disclosed, or as otherwise permitted by
repay the requested loan to creditor’s otherwise applicable statute, regulation, or order.
accommodate the consumer’s particular underwriting criteria.
(v) If a consumer completes and signs § 571.32 Sharing medical information with
circumstances, consistent with safe and
affiliates.
sound practices. The creditor may also a credit application that is not for
decline to consider such medical medical purpose credit and the (a) Scope. This section applies to
information to accommodate the application contains boilerplate savings associations and federal savings
consumer, but may evaluate the language that routinely requests medical association operating subsidiaries.
consumer’s application in accordance information from the consumer or that (b) In general. The exclusions from
with its otherwise applicable indicates that by applying for credit the the term ‘‘consumer report’’ in section
underwriting criteria. The creditor may consumer authorizes or consents to the 603(d)(2) of the Act that allow the
not deny the consumer’s application or creditor obtaining and using medical sharing of information with affiliates do
otherwise treat the consumer less information in connection with a not apply if a person described in
favorably because the consumer determination of the consumer’s paragraph (a) of this section
specifically requested a medical eligibility, or continued eligibility, for communicates to an affiliate:
credit, the consumer has not specifically (1) Medical information;
accommodation, if the creditor would (2) An individualized list or
have extended the credit or treated the requested that the creditor obtain and
description based on the payment
consumer more favorably under the use medical information to
transactions of the consumer for
creditor’s otherwise applicable accommodate the consumer’s particular
medical products or services; or
underwriting criteria. circumstances. (3) An aggregate list of identified
(ii) If a consumer applies for a loan by (5) Example of a forbearance practice
consumers based on payment
telephone and explains that his income or program. After an appropriate safety
transactions for medical products or
has been and will continue to be and soundness review, a creditor
services.
interrupted on account of a medical institutes a program that allows (c) Exceptions. A person described in
condition and that he expects to repay consumers who are or will be paragraph (a) of this section may rely on
the loan by liquidating assets, the hospitalized to defer payments as the exclusions from the term ‘‘consumer
creditor may, but is not required to, needed for up to three months, without report’’ in section 603(d)(2) of the Act to
evaluate the application using the sale penalty, if the credit account has been communicate the information in
of assets as the primary source of open for more than one year and has not paragraph (b) of this section to an
repayment, consistent with safe and previously been in default, and the affiliate:
sound practices, provided that the consumer provides confirming (1) In connection with the business of
creditor documents the consumer’s documentation at an appropriate time. insurance or annuities (including the
request by recording the oral A consumer is hospitalized and does activities described in section 18B of the
conversation or making a notation of the not pay her bill for a particular month. model Privacy of Consumer Financial
request in the consumer’s file. This consumer has had a credit account and Health Information Regulation
(iii) If a consumer applies for a loan with the creditor for more than one year issued by the National Association of
and the application form provides a and has not previously been in default. Insurance Commissioners, as in effect
space where the consumer may provide The creditor attempts to contact the on January 1, 2003);
any other information or special consumer and speaks with the (2) For any purpose permitted without
circumstances, whether medical or non- consumer’s spouse, who is not the authorization under the regulations
medical, that the consumer would like consumer’s legal representative. The promulgated by the Department of
the creditor to consider in evaluating spouse informs the creditor that the Health and Human Services pursuant to
the consumer’s application, the creditor consumer is hospitalized and is unable the Health Insurance Portability and
may use medical information provided to pay the bill at that time. The creditor Accountability Act of 1996 (HIPAA);
by the consumer in that space on that defers payments for up to three months, (3) For any purpose referred to in
application to accommodate the without penalty, for the hospitalized section 1179 of HIPAA;
consumer’s application for credit, consumer and sends the consumer a (4) For any purpose described in
consistent with safe and sound letter confirming this practice and the section 502(e) of the Gramm-Leach-
practices, or may disregard that date on which the next payment will be Bliley Act;
information. due. The creditor has obtained and used (5) In connection with a
(iv) If a consumer specifically requests medical information to determine determination of the consumer’s
that the creditor use medical whether the provisions of a medically- eligibility, or continued eligibility, for
information in determining the triggered forbearance practice or credit consistent with § 571.30; or
consumer’s eligibility, or continued program apply to a consumer. (6) As otherwise permitted by order of
eligibility, for credit and provides the the OTS.
creditor with medical information for § 571.31 Limits on redisclosure of
that purpose, and the creditor information. National Credit Union Administration
determines that it needs additional (a) Scope. This section applies to ■ For the reasons set out in the
information regarding the consumer’s savings associations and federal savings preamble, 12 CFR chapter VII is
circumstances, the creditor may request, association operating subsidiaries. amended as follows:
obtain, and use additional medical (b) Limits on redisclosure. If a person
information about the consumer as described in paragraph (a) of this PART 717—FAIR CREDIT REPORTING
necessary to verify the information section receives medical information
■ 1. Revise the authority citation for part
provided by the consumer or to about a consumer from a consumer
717 to read as follows:
determine whether to make an reporting agency or its affiliate, the
accommodation for the consumer. The person must not disclose that Authority: 15 U.S.C. 1681a, 1681b, 1681s,
consumer may decline to provide information to any other person, except 1681w, 6801 and 6805.
additional information, withdraw the as necessary to carry out the purpose for ■ 2. Amend part 717 by revising subpart
request for an accommodation, and have which the information was initially A to read as follows:

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Subpart A—General Provisions over the management or policies of a (ii) Creditor has the same meaning as
CUSO, if the CUSO is 67% owned by in section 702 of the Equal Credit
§ 717.1 Purpose. credit unions. Opportunity Act, 15 U.S.C. 1691a.
(a) Purpose. The purpose of this part (2) Any other person has, with respect (iii) Eligibility, or continued eligibility,
is to establish standards for Federal to both companies, a relationship for credit means the consumer’s
credit unions regarding consumer report described in paragraphs (i)(1)(i) through qualification or fitness to receive, or
information. In addition, the purpose of (i)(1)(iii) of this section. continue to receive, credit, including
this part is to specify the extent to (j) [Reserved] the terms on which credit is offered.
which Federal credit unions may obtain, (k) Medical information means: The term does not include:
use or share certain information. This (1) Information or data, whether oral (A) Any determination of the
part also contains a number of measures or recorded, in any form or medium, consumer’s qualification or fitness for
Federal credit unions must take to created by or derived from a health care employment, insurance (other than a
combat consumer fraud and related provider or the consumer, that relates credit insurance product), or other non-
crimes, including identity theft. to: credit products or services;
(b) [Reserved]. (B) Authorizing, processing, or
(i) The past, present, or future
documenting a payment or transaction
§ 717.2 Examples. physical, mental, or behavioral health or
on behalf of the consumer in a manner
The examples in this part are not condition of an individual;
that does not involve a determination of
exclusive. Compliance with an example, (ii) The provision of health care to an
the consumer’s eligibility, or continued
to the extent applicable, constitutes individual; or
eligibility, for credit; or
compliance with this part. Examples in (iii) The payment for the provision of (C) Maintaining or servicing the
a paragraph illustrate only the issue health care to an individual. consumer’s account in a manner that
described in the paragraph and do not (2) The term does not include: does not involve a determination of the
illustrate any other issue that may arise (i) The age or gender of a consumer; consumer’s eligibility, or continued
in this part. (ii) Demographic information about eligibility, for credit.
the consumer, including a consumer’s (c) Rule of construction for obtaining
§ 717.3 Definitions. residence address or e-mail address; and using unsolicited medical
As used in this part, unless the (iii) Any other information about a information. (1) In general. A creditor
context requires otherwise: consumer that does not relate to the does not obtain medical information in
(a) Act means the Fair Credit physical, mental, or behavioral health or violation of the prohibition if it receives
Reporting Act (15 U.S.C. 1681 et seq.). condition of a consumer, including the
(b) Affiliate means any company that medical information pertaining to a
existence or value of any insurance consumer in connection with any
is related by common ownership or policy; or
common corporate control with another determination of the consumer’s
(iv) Information that does not identify eligibility, or continued eligibility, for
company. For example, an affiliate of a
a specific consumer. credit without specifically requesting
Federal credit union is a credit union
(l) Person means any individual, medical information.
service corporation (CUSO), as provided
partnership, corporation, trust, estate (2) Use of unsolicited medical
in 12 CFR part 712, that is controlled by
cooperative, association, government or information. A creditor that receives
the Federal credit union.
(c) [Reserved] governmental subdivision or agency, or unsolicited medical information in the
(d) Company means any corporation, other entity. manner described in paragraph (c)(1) of
limited liability company, business ■ 3. Subpart D is added to part 717 to this section may use that information in
trust, general or limited partnership, read as follows: connection with any determination of
association, or similar organization. the consumer’s eligibility, or continued
(e) Consumer means an individual. Subpart D—Medical Information eligibility, for credit to the extent the
(f) [Reserved] creditor can rely on at least one of the
§ 717.30 Obtaining or using medical
(g) [Reserved] information in connection with a exceptions in § 717.30(d) or (e).
(h) [Reserved] determination of eligibility for credit. (3) Examples. A creditor does not
(i) Common ownership or common obtain medical information in violation
(a) Scope. This section applies to: of the prohibition if, for example:
corporate control means a relationship
(1) A Federal credit union that (i) In response to a general question
between two companies under which:
(1) One company has, with respect to participates as a creditor in a regarding a consumer’s debts or
the other company: transaction; or expenses, the creditor receives
(i) Ownership, control, or power to (2) Any other person that participates information that the consumer owes a
vote 25 percent or more of the as a creditor in a transaction involving debt to a hospital.
outstanding shares of any class of voting a person described in paragraph (a)(1) of (ii) In a conversation with the
security of a company, directly or this section. creditor’s loan officer, the consumer
indirectly, or acting through one or (b) General prohibition on obtaining informs the creditor that the consumer
more other persons; or using medical information. (1) In has a particular medical condition.
(ii) Control in any manner over the general. A creditor may not obtain or (iii) In connection with a consumer’s
election of a majority of the directors, use medical information pertaining to a application for an extension of credit,
trustees, or general partners (or consumer in connection with any the creditor requests a consumer report
individuals exercising similar functions) determination of the consumer’s from a consumer reporting agency and
of a company; or eligibility, or continued eligibility, for receives medical information in the
(iii) The power to exercise, directly or credit, except as provided in this consumer report furnished by the
indirectly, a controlling influence over section. agency even though the creditor did not
the management or policies of a (2) Definitions. (i) Credit has the same specifically request medical information
company, as the NCUA determines; or meaning as in section 702 of the Equal from the consumer reporting agency.
(iv) Example. NCUA will presume a Credit Opportunity Act, 15 U.S.C. (d) Financial information exception
credit union has a controlling influence 1691a. for obtaining and using medical

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70694 Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations

information. (1) In general. A creditor the consumer has a poor repayment established requirements for the
may obtain and use medical information history on outstanding debts. The requested mortgage loan. The loan
pertaining to a consumer in connection creditor has used medical information officer recommends to the credit
with any determination of the in a manner and to an extent no less committee that the consumer be denied
consumer’s eligibility, or continued favorable than it would use comparable credit because the consumer has that
eligibility, for credit so long as: non-medical information. disease. The credit committee follows
(i) The information is the type of (B) A consumer indicates on an the loan officer’s recommendation and
information routinely used in making application for a $200,000 mortgage denies the application because the
credit eligibility determinations, such as loan that she receives $15,000 in long- consumer has a potentially terminal
information relating to debts, expenses, term disability income each year from disease. The creditor has used medical
income, benefits, assets, collateral, or her former employer and has no other information in a manner inconsistent
the purpose of the loan, including the income. Annual income of $15,000, with the exception by taking into
use of proceeds; regardless of source, would not be account the consumer’s physical,
(ii) The creditor uses the medical sufficient to support the requested mental, or behavioral health, condition,
information in a manner and to an amount of credit. The creditor denies or history, type of treatment, or
extent that is no less favorable than it the application on the basis that the prognosis as part of a determination of
would use comparable information that projected debt-to-income ratio of the eligibility or continued eligibility for
is not medical information in a credit consumer does not meet the creditor’s credit.
transaction; and underwriting criteria. The creditor has (C) A consumer who has an apparent
(iii) The creditor does not take the used medical information in a manner medical condition, such as a consumer
consumer’s physical, mental, or and to an extent that is no less favorable who uses a wheelchair or an oxygen
behavioral health, condition or history, than it would use comparable non- tank, meets with a loan officer to apply
type of treatment, or prognosis into medical information. for a home equity loan. The consumer
account as part of any such (C) A consumer includes on an meets the creditor’s established
determination. application for a $10,000 home equity requirements for the requested home
(2) Examples. (i) Examples of the loan that he has a $50,000 debt to a equity loan and the creditor typically
types of information routinely used in medical facility that specializes in does not require consumers to obtain a
making credit eligibility determinations. treating a potentially terminal disease. debt cancellation contract, debt
Paragraph (d)(1)(i) of this section The creditor contacts the medical suspension agreement, or credit
permits a creditor, for example, to facility to verify the debt and obtain the insurance product in connection with
obtain and use information about: repayment history and current status of such loans. However, based on the
(A) The dollar amount, repayment the loan. The creditor learns that the consumer’s apparent medical condition,
terms, repayment history, and similar debt is current. The applicant meets the the loan officer recommends to the
information regarding medical debts to income and other requirements of the credit committee that credit be extended
calculate, measure, or verify the creditor’s underwriting guidelines. The to the consumer only if the consumer
repayment ability of the consumer, the creditor grants the application. The obtains a debt cancellation contract,
use of proceeds, or the terms for creditor has used medical information debt suspension agreement, or credit
granting credit; in accordance with the exception. insurance product from a nonaffiliated
(B) The value, condition, and lien (iii) Examples of uses of medical third party. The credit committee agrees
status of a medical device that may information inconsistent with the with the loan officer’s recommendation.
serve as collateral to secure a loan; exception. (A) A consumer applies for The loan officer informs the consumer
(C) The dollar amount and continued $25,000 of credit and includes on the that the consumer must obtain a debt
eligibility for disability income, application information about a $50,000 cancellation contract, debt suspension
workers’ compensation income, or other debt to a hospital. The creditor contacts agreement, or credit insurance product
benefits related to health or a medical the hospital to verify the amount and from a nonaffiliated third party to
condition that is relied on as a source payment status of the debt, and learns qualify for the loan. The consumer
of repayment; or that the debt is current and that the obtains one of these products and the
(D) The identity of creditors to whom consumer has no delinquencies in her creditor approves the loan. The creditor
outstanding medical debts are owed in repayment history. If the existing debt has used medical information in a
connection with an application for were instead owed to a retail manner inconsistent with the exception
credit, including but not limited to, a department store, the creditor would by taking into account the consumer’s
transaction involving the consolidation approve the application and extend physical, mental, or behavioral health,
of medical debts. credit based on the amount and condition, or history, type of treatment,
(ii) Examples of uses of medical repayment history of the outstanding or prognosis in setting conditions on the
information consistent with the debt. The creditor, however, denies the consumer’s eligibility for credit.
exception. (A) A consumer includes on application because the consumer is (e) Specific exceptions for obtaining
an application for credit information indebted to a hospital. The creditor has and using medical information. (1) In
about two $20,000 debts. One debt is to used medical information, here the general. A creditor may obtain and use
a hospital; the other debt is to a retailer. identity of the medical creditor, in a medical information pertaining to a
The creditor contacts the hospital and manner and to an extent that is less consumer in connection with any
the retailer to verify the amount and favorable than it would use comparable determination of the consumer’s
payment status of the debts. The non-medical information. eligibility, or continued eligibility, for
creditor learns that both debts are more (B) A consumer meets with a loan credit:
than 90 days past due. Any two debts officer of a creditor to apply for a (i) To determine whether the use of a
of this size that are more than 90 days mortgage loan. While filling out the loan power of attorney or legal representative
past due would disqualify the consumer application, the consumer informs the that is triggered by a medical condition
under the creditor’s established loan officer orally that she has a or event is necessary and appropriate or
underwriting criteria. The creditor potentially terminal disease. The whether the consumer has the legal
denies the application on the basis that consumer meets the creditor’s capacity to contract when a person

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Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations 70695

seeks to exercise a power of attorney or qualifying veterans. The organization an explanation for adverse payment
act as legal representative for a works through mortgage lenders and history information in his credit report,
consumer based on an asserted medical requires mortgage lenders to obtain the creditor may consider such medical
condition or event; medical information about the disability information in evaluating the
(ii) To comply with applicable of any consumer that seeks to qualify for consumer’s willingness and ability to
requirements of local, state, or Federal the program, use that information to repay the requested loan to
laws; verify the consumer’s eligibility for the accommodate the consumer’s particular
(iii) To determine, at the consumer’s program, and forward that information circumstances, consistent with safe and
request, whether the consumer qualifies to the organization. A consumer who is sound practices. The creditor may also
for a legally permissible special credit a veteran applies to a creditor for a decline to consider such medical
program or credit-related assistance home purchase mortgage loan. The information to accommodate the
program that is: creditor informs the consumer about the consumer, but may evaluate the
(A) Designed to meet the special credit assistance program for disabled consumer’s application in accordance
needs of consumers with medical veterans and the consumer seeks to with its otherwise applicable
conditions; and qualify for the program. Assuming that underwriting criteria. The creditor may
(B) Established and administered the program complies with all not deny the consumer’s application or
pursuant to a written plan that: applicable law, including applicable fair otherwise treat the consumer less
(1) Identifies the class of persons that lending laws, the creditor may obtain favorably because the consumer
the program is designed to benefit; and and use medical information about the specifically requested a medical
(2) Sets forth the procedures and medical condition and disability, if any, accommodation, if the creditor would
standards for extending credit or of the consumer to determine whether have extended the credit or treated the
providing other credit-related assistance the consumer qualifies for the credit consumer more favorably under the
under the program; assistance program. creditor’s otherwise applicable
(iv) To the extent necessary for (3) Examples of verifying the medical underwriting criteria.
purposes of fraud prevention or purpose of the loan or the use of (ii) If a consumer applies for a loan by
detection; proceeds. (i) If a consumer applies for telephone and explains that his income
(v) In the case of credit for the $10,000 of credit for the purpose of has been and will continue to be
purpose of financing medical products financing vision correction surgery, the interrupted on account of a medical
or services, to determine and verify the creditor may verify with the surgeon condition and that he expects to repay
medical purpose of a loan and the use that the procedure will be performed. If the loan by liquidating assets, the
of proceeds; the surgeon reports that surgery will not creditor may, but is not required to,
(vi) Consistent with safe and sound be performed on the consumer, the evaluate the application using the sale
practices, if the consumer or the creditor may use that medical of assets as the primary source of
consumer’s legal representative information to deny the consumer’s repayment, consistent with safe and
specifically requests that the creditor application for credit, because the loan sound practices, provided that the
use medical information in determining would not be used for the stated creditor documents the consumer’s
the consumer’s eligibility, or continued purpose. request by recording the oral
eligibility, for credit, to accommodate (ii) If a consumer applies for $10,000 conversation or making a notation of the
the consumer’s particular of credit for the purpose of financing request in the consumer’s file.
circumstances, and such request is cosmetic surgery, the creditor may (iii) If a consumer applies for a loan
documented by the creditor; confirm the cost of the procedure with and the application form provides a
(vii) Consistent with safe and sound the surgeon. If the surgeon reports that space where the consumer may provide
practices, to determine whether the the cost of the procedure is $5,000, the any other information or special
provisions of a forbearance practice or creditor may use that medical circumstances, whether medical or non-
program that is triggered by a medical information to offer the consumer only medical, that the consumer would like
condition or event apply to a consumer; $5,000 of credit. the creditor to consider in evaluating
(viii) To determine the consumer’s (iii) A creditor has an established the consumer’s application, the creditor
eligibility for, the triggering of, or the medical loan program for financing may use medical information provided
reactivation of a debt cancellation particular elective surgical procedures. by the consumer in that space on that
contract or debt suspension agreement if The creditor receives a loan application application to accommodate the
a medical condition or event is a from a consumer requesting $10,000 of consumer’s application for credit,
triggering event for the provision of credit under the established loan consistent with safe and sound
benefits under the contract or program for an elective surgical practices, or may disregard that
agreement; or procedure. The consumer indicates on information.
(ix) To determine the consumer’s the application that the purpose of the (iv) If a consumer specifically requests
eligibility for, the triggering of, or the loan is to finance an elective surgical that the creditor use medical
reactivation of a credit insurance procedure not eligible for funding under information in determining the
product if a medical condition or event the guidelines of the established loan consumer’s eligibility, or continued
is a triggering event for the provision of program. The creditor may deny the eligibility, for credit and provides the
benefits under the product. consumer’s application because the creditor with medical information for
(2) Example of determining eligibility purpose of the loan is not for a that purpose, and the creditor
for a special credit program or credit particular procedure funded by the determines that it needs additional
assistance program. A not-for-profit established loan program. information regarding the consumer’s
organization establishes a credit (4) Examples of obtaining and using circumstances, the creditor may request,
assistance program pursuant to a written medical information at the request of obtain, and use additional medical
plan that is designed to assist disabled the consumer. (i) If a consumer applies information about the consumer as
veterans in purchasing homes by for a loan and specifically requests that necessary to verify the information
subsidizing the down payment for the the creditor consider the consumer’s provided by the consumer or to
home purchase mortgage loans of medical disability at the relevant time as determine whether to make an

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70696 Federal Register / Vol. 70, No. 224 / Tuesday, November 22, 2005 / Rules and Regulations

accommodation for the consumer. The consumer and sends the consumer a activities described in section 18B of the
consumer may decline to provide letter confirming this practice and the model Privacy of Consumer Financial
additional information, withdraw the date on which the next payment will be and Health Information Regulation
request for an accommodation, and have due. The creditor has obtained and used issued by the National Association of
the application considered under the medical information to determine Insurance Commissioners, as in effect
creditor’s otherwise applicable whether the provisions of a medically- on January 1, 2003);
underwriting criteria. triggered forbearance practice or (2) For any purpose permitted without
(v) If a consumer completes and signs program apply to a consumer. authorization under the regulations
a credit application that is not for § 717.31 Limits on redisclosure of promulgated by the Department of
medical purpose credit and the information Health and Human Services pursuant to
application contains boilerplate (a) Scope. This section applies to the Health Insurance Portability and
language that routinely requests medical Federal credit unions. Accountability Act of 1996 (HIPAA);
information from the consumer or that (b) Limits on redisclosure. If a Federal (3) For any purpose referred to in
indicates that by applying for credit the credit union receives medical section 1179 of HIPAA;
consumer authorizes or consents to the information about a consumer from a (4) For any purpose described in
creditor obtaining and using medical consumer reporting agency or its section 502(e) of the Gramm-Leach-
information in connection with a affiliate, the person must not disclose Bliley Act;
determination of the consumer’s that information to any other person,
eligibility, or continued eligibility, for (5) In connection with a
except as necessary to carry out the determination of the consumer’s
credit, the consumer has not specifically purpose for which the information was
requested that the creditor obtain and eligibility, or continued eligibility, for
initially disclosed, or as otherwise credit consistent with § 717.30; or
use medical information to permitted by statute, regulation, or
accommodate the consumer’s particular order. (6) As otherwise permitted by order of
circumstances. the NCUA.
(5) Example of a forbearance practice § 717.32 Sharing medical information with Dated: November 8, 2005.
affiliates.
or program. After an appropriate safety John C. Dugan,
and soundness review, a creditor (a) Scope. This section applies to
Comptroller of the Currency.
institutes a program that allows Federal credit unions.
(b) In general. The exclusions from By order of the Board of Governors of the
consumers who are or will be Federal Reserve System, November 14, 2005.
the term ‘‘consumer report’’ in section
hospitalized to defer payments as Robert deV. Frierson,
603(d)(2) of the Act that allow the
needed for up to three months, without
sharing of information with affiliates do Deputy Secretary of the Board.
penalty, if the credit account has been
not apply if a Federal credit union Dated at Washington, DC, this 8th day of
open for more than one year and has not
communicates to an affiliate: November, 2005.
previously been in default, and the (1) Medical information;
consumer provides confirming By order of the Board of Directors,
(2) An individualized list or
documentation at an appropriate time. Federal Deposit Insurance Corporation.
description based on the payment
A consumer is hospitalized and does transactions of the consumer for Robert E. Feldman,
not pay her bill for a particular month. medical products or services; or Executive Secretary.
This consumer has had a credit account (3) An aggregate list of identified Dated: November 11, 2005.
with the creditor for more than one year consumers based on payment By the Office of Thrift Supervision,
and has not previously been in default. transactions for medical products or
The creditor attempts to contact the John M. Reich,
services.
consumer and speaks with the (c) Exceptions. A Federal credit union Director.
consumer’s adult child, who is not the may rely on the exclusions from the By the National Credit Union
consumer’s legal representative. The term ‘‘consumer report’’ in section Administration Board on November 8, 2005.
adult child informs the creditor that the 603(d)(2) of the Act to communicate the Mary F. Rupp,
consumer is hospitalized and is unable information in paragraph (b) to an Secretary of the Board.
to pay the bill at that time. The creditor affiliate: [FR Doc. 05–22830 Filed 11–21–05; 8:45 am]
defers payments for up to three months, (1) In connection with the business of BILLING CODE 4810–33–P; 6210–01–P; 6714–10–P;
without penalty, for the hospitalized insurance or annuities (including the 6720–01–P; 7535–01–P

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