CUNA Comment Letter
Docket No. 1188 Regulation FF, Fair Credit Reporting Medical Information
July 11, 2005
Ms. Jennifer J. Johnson
Board of Governors of the
Federal Reserve System
20th Street and Constitution Avenue, N.W.
Washington, DC 20551
Dear Ms. Johnson:
The Credit Union National Association (CUNA) appreciates the opportunity to comment on an interagency interim final rule that will provide exceptions to the restrictions on obtaining and using medical information that were included in the Fair and Accurate Credit Transactions (FACT) Act, which was enacted in 2003. CUNA represents more than 90 percent of our nations 9,100 federal and state-chartered credit unions.
When the proposed rule regarding the exceptions to the FACT Act medical privacy restrictions was issued last year, the significant issue that we addressed in our comment letter in response to the proposal was that the rule would only apply to federal credit unions, not to state-chartered credit unions. This is because the FACT Act gives NCUA direct rulemaking authority over federal credit unions and is silent regarding state-chartered credit unions. Although other agencies also have explicit rulemaking authority with regard to the use of medical information, none of those rules would apply to state-chartered credit unions. The result could have been that state-chartered credit unions would not be able to benefit from the exceptions to the provisions of the FACT Act that severely restrict the ability of creditors to obtain and use medical information.
We commend the Federal Reserve Board (Fed) and the other agencies for clarifying that the exceptions will be available to all creditors, including state-chartered credit unions. To accomplish this, the Fed has issued a separate rule to cover those creditors not covered under the proposed rule, including state-chartered credit unions, nonbank finance companies, and others.
Although we generally agree that this will effectively resolve the issue, we do note that this separate rule does not contain the provisions with regard to the sharing of medical information among affiliates. NCUAs rule that applies to federal credit unions creates the two following additional exceptions that permit the sharing of medical-related information among affiliates under the standard Fair Credit Reporting Act (FCRA) exceptions, such as the sharing of transactional or experience information among affiliates or the sharing of certain other information after providing consumers with the opportunity to opt-out:
- If the information is disclosed to an affiliate in connection with a credit eligibility determination, as permitted under these rules.
- As otherwise permitted by order of the appropriate government agency.
We understand these provisions were not included in the Feds separate rule because although the Federal Trade Commission (FTC) does not have rulemaking authority with regard to the FACT Act provisions on obtaining and using medical information, it does have rulemaking authority with regard to the specific provisions that address the sharing of medical information among affiliates. We also realize that the FACT Act itself includes many exceptions that state chartered credit unions can utilize and are assessing whether there are other circumstances in which credit unions would need to use the two additional exceptions that have been included in NCUAs interim rule for federal credit unions. We have and will continue to be in contact with the FTC to discuss the need for the FTC to issue rules in this area.
We also commend the agencies for broadening the exception for certain information used for credit eligibility determinations, as long as the medical information is not used to the detriment of the consumer, and the exception for situations in which the consumer or legal representative specifically requests that medical information be used, both of which were suggested in CUNAs comment letter in response the proposed rule. We also suggested that the effective date for the rule be delayed for a significant period of time after the rule is issued in final form. We commend the agencies for delaying the effective date until March 7, 2006.
Thank you for the opportunity to comment on the interim final rule that will provide exceptions to the FACT Act restrictions on obtaining and using medical information. If you have questions about our comments, please contact Senior Vice President and Associate General Counsel Mary Dunn or me at (202) 638-5777.
Senior Assistant General Counsel