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FACTA - Medical Collections & Credit Decision

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During a recent FDIC exam, we were advised it would be a violation to use medical collections as a negative basis for a credit decision since that constituted "use of medical information." I reviewed the FACTA and commentary from the FTC which does not seem to support the statement from the examiner. As a general rule we would not view a few small medical collections as significant credit issues. However, if there are many unpaid medical collections or they are large amounts, it could negatively affect a credit decision in the same manner as any other non-medical collection would. It is hard for us to accept that evaluating an unpaid medical collection constitutes "use of medical information." What is your opinion?

You can use medical debts and income information just like you would anything else. You can verify medical payments, medical income, consider late and unpaid medical bills. I disagree with the examiner's comment. Refer to Section 334.30(d)(1) of the FDIC regulation [or Section 222.30(d)(1) of FRB Regulation V].

First published on 3/23/09

First published on 03/23/2009

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