Agencies Issue Proposed Rule on Use of Medical Information for Credit Eligibility
April 26, 2004
Circular No. 11591

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

The federal bank, thrift and credit union regulatory agencies issued a proposed rule under the Fair Credit Reporting Act (FCRA). The rule incorporates statutory the prohibition on obtaining or using medical information in connection with credit eligibility determinations and, as required by the statute, creates certain exceptions to be applied in limited circumstances.

Section 411 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act) amends the FCRA to provide that a creditor may not obtain or use medical information in connection with any determination of a consumer's eligibility, or continued eligibility, for credit, except as permitted by regulations. The FACT Act requires the agencies to prescribe regulations that permit creditors to obtain and use medical information for eligibility purposes when necessary and appropriate to protect legitimate operational, transactional, risk, consumer, and other needs. The FACT Act further provides for the regulations creating these exceptions to be issued in final form within six months of the date of enactment of the FACT Act, or June 4, 2004.

Section 411 of the FACT Act also amends the FCRA to limit the ability of creditors and others to share medical-related information with affiliates, except as permitted by the statute, regulation, or order. The proposed rule would enumerate situations in which creditors would be permitted to share such information among affiliates.

The proposed rule is being issued by the Federal Reserve Board, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision.

Comments are requested within thirty days after publication in the Federal Register.

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Interagency notice OFFSITE PDF

Maryann Campbell
Supervising Examiner
Legal and Compliance Risk Department