House Bill Would Exclude Medical Information From Credit Reports

The House this fall will likely consider a bill (HR 2622) that would limit the amount of medical information that could appear in credit reports as part of the renewal of provisions in the Fair Credit Report Reporting Act scheduled to expire Jan. 1, the Wall Street Journal reports. The bill, approved last month by the House Committee on Financial Services, would mandate that affiliates of creditors could not share medical information for credit purposes without the written consent of customers and that creditors could not use medical information to make credit decisions. In addition, legislation would require the use of a code for medical information that appears in credit reports. According to the Journal, privacy advocates have raised concerns because studies have found that a "substantial amount of health data could be inferred by entries on a credit report" and could affect credit decisions. For example, creditors could determine that customers have diseases based on information that they owe money or have made payments to certain specialists or health clinics. According to the Journal, "It's unclear how many creditors, if any, evaluate a consumer's risk on the basis of health," but in 1993, a government report cited a case in which a creditor used medical information to determine which customers had certain diseases and "called due the mortgages of those customers who had cancer."

Joy Pritts, assistant research professor at Georgetown University, said that many health insurers use credit reports to establish premiums or decide whether to renew policies and that the use of "medical information for credit decisions" may "develop along the same lines." However, Susan Henrichsen, a supervising deputy attorney general in California, said that the House bill would not provide "good coverage" because the legislation would limit the definition of "medical information" to data collected by physicians and hospitals. The bill would not regulate life insurers or other entities that collect medical information, the Journal reports. Rep Barney Frank (D-Mass.), ranking member of the House Financial Services Committee, said that the House could revise the definition in floor debate (Marciniak, Wall Street Journal, 8/6).