We've repeated the questions, given our answers, and included cites to provisions of Regulation V.
Some of the questions were real stumpers. If you think we've made a mistake, drop us an email. We're not afraid to admit we don't know it all!
Jack pays his insurance co-payment with a check drawn on your bank. The check is payable to Town Medical Services. The memo line indicates "Chest X-ray". Is the information on the memo line considered medical information?
Yes. This is medical information as defined in Regulation V, § 222.3(k)(1). It indicates that Jack received a chest X-ray and paid for it.
A military veteran applies for a home purchase loan under a program that assists disabled veterans in purchasing homes by subsidizing the down payment for the loan. Can the lender contact the veteran’s doctor to verify that the veteran is, in fact, disabled?
Yes. Although the lender is using medical information in this case, it is doing so in order to determine that the veteran is eligible for the downpayment assistance. That is an element of creditworthiness. See § 222.30(d)(2)(i)(C).
Ken presents the bank with a power of attorney (POA) for his mother's accounts. The POA is effective when Ken’s mother is no longer capable of managing her own affairs. May the bank contact the mother's doctor to discuss her condition?
Absolutely yes. The bank needs to know whether Ken can act for his mother under the POA. This is an allowable exception under § 222.30(e)(1).
Michele is borrowing money from your bank. She is purchasing both credit life and accident and health. She completes a questionnaire that inquires about various illnesses – have you had a heart attack, stroke, high blood pressure, diabetes, etc. Is the information collected using the questionnaire considered medical information?
Yes. It meets the definition found in § 222.3(k)(1).
As part of the processing of Michele's loan, your bank obtains a credit report on Michele. It shows a 60-day delinquency on a payment due to a medical clinic.
Is the credit report information considered medical information?
Yes. It relates to payment for the provision of health care to Michele. See § 222.3(k)(1).
Can Michele's delinquency in payment to a medical clinic be used as a basis of denying the loan request?
Yes, if it is treated no more unfavorably than a similar delinquency to other than a health care provider would be treated. See § 222.30(d)(1).
Jack requests a loan to refinance a home purchase loan currently held by another lender. He wants the lowest possible rate and the longest possible term. He explains that his doctor has told him that he has less than six months to live as a result of advanced stage lung cancer. He wants to refinance in order to lower the payments so that hopefully his wife and children will be able to hang on to the house after he is gone.
Is the information the borrower volunteered considered medical information?
Yes. It's information about Jack's health obtained from him. See § 222.3(k)(1).
Can the lender use the information about Jack's condition to deny the loan?
No. That's a use of medical information that's inconsistent with the regulation. See § 222.30(d)(2)(iii)(B).
Can the lender require Jack to assign a life insurance policy in order to obtain the loan?
No. See § 222.30(d)(2)(iii)(C).
Amy has applied for a loan to fund various elective medical procedures (an extreme makeover). Can the lender contact the various medical professionals in order to verify that the procedures are to be performed and the cost?
No problem. See §§ 222.30(d)(1)(i) and 222.30(e)(1)(v).
George's bank has been investigating the use of various biometric tools in connection with authentication of online users, including loan applicants and borrowers. Since the term "medical information" has such a broad definition, will the use of biometrics in connection with credit customers be precluded under FACTA?
This is a tough one. Generally, simple use of biometrics doesn't relate to an individual's past, present, or future physical, mental, or behavioral health or condition. But, unless there is a choice of the biometrics to be used, one might argue that a eye scan, for example, could show that an individual suffers from cataracts. We don't see in the question any suggestion that biometrics would be used to deny credit (except when a user's identity can't be authenticated). So we don't think that the use of biometrics to authenticate identification violates the FACTA rules.
Shirley applies for a loan. On the written application, she lists all of her outstanding debts, including many owed to local doctors and a hospital. Can you consider those debts in evaluating her request for credit, or are you prohibited from doing so because of their medical nature?
With apologies for the pun, you can "surely" use this information as long as the medical debts are considered on the same plane as Shirley's other obligations. § 222.30(d)(1).
Leon has a long history of mental illness. While he has had periods of time when he has been able to work, on two occasions that you are aware of in the past, he was unable to continue his employment due to mental health issues. He seems to be fine now, has a good job, and is applying for a mortgage loan. Can you take into consideration his mental health in making a decision on his application?
You may consider the medical history as an explanation for Leon's former payment lapses, or you may refuse to weigh the medical history and simply evaluate Leon's payment record using your normal underwriting guidelines. What you may not do is use Leon's medical information against him in evaluating his application. See § 222.30(e)(4).
BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.
Print Friendly!
Email This Article!
Discuss NOW!
