(a) In general. A creditor may obtain and use medical information
pertaining to a consumer in connection with any determination of the
consumer’s eligibility, or continued eligibility, for credit—
(1) to determine whether the use of a power
of attorney or legal representative that is triggered by a medical
condition or event is necessary and appropriate or whether the consumer
has the legal capacity to contract when a person seeks to exercise
a power of attorney or act as legal representative for a consumer
based on an asserted medical condition or event;
(2) to comply with applicable requirements
of local, state, or federal laws;
(3) to determine, at the consumer’s request,
whether the consumer qualifies for a legally permissible special credit
program or credit-related assistance program that is—
(i) designed
to meet the special needs of consumers with medical conditions; and
(ii) established and
administered pursuant to a written plan that—
(A) identifies
the class of persons that the program is designed to benefit; and
(B) sets forth the procedures
and standards for extending credit or providing other credit-related
assistance under the program;
(4) to the extent necessary
for purposes of fraud prevention or detection;
(5) in the case of credit for the purpose
of financing medical products or services, to determine and verify
the medical purpose of a loan and the use of proceeds;
(6) consistent with safe and
sound practices, if the consumer or the consumer’s legal representative
specifically requests that the creditor use medical information in
determining the consumer’s eligibility, or continued eligibility,
for credit, to accommodate the consumer’s particular circumstances,
and such request is documented by the creditor;
(7) consistent with safe and sound practices,
to determine whether the provisions of a forbearance practice or program
that is triggered by a medical condition or event apply to a consumer;
(8) to determine the
consumer’s eligibility for, the triggering of, or the reactivation
of a debt- cancellation contract or debt-suspension agreement if a
medical condition or event is a triggering event for the provision
of benefits under the contract or agreement; or
(9) to determine the consumer’s eligibility
for, the triggering of, or the reactivation of a credit insurance
product if a medical condition or event is a triggering event for the
provision of benefits under the product.
6-3508
(b) Example of determining
eligibility for a special credit program or credit assistance program. A not-for-profit organization establishes a credit assistance program
pursuant to a written plan that is designed to assist disabled veterans
in purchasing homes by subsidizing the downpayment for the home-purchase
mortgage loans of qualifying veterans. The organization works through
mortgage lenders and requires mortgage lenders to obtain medical information
about the disability of any consumer that seeks to qualify for the
program, use that information to verify the consumer’s eligibility
for the program, and forward that information to the organization.
A consumer who is a veteran applies to a creditor for a home-purchase
mortgage loan. The creditor informs the consumer about the credit
assistance program for disabled veterans and the consumer seeks to
qualify for the program. Assuming that the program complies with all
applicable law, including applicable fair lending laws, the creditor
may obtain and use medical information about the medical condition
and disability, if any, of the consumer to determine whether the consumer
qualifies for the credit assistance program.
6-3509
(c) Examples of verifying the medical purpose of
the loan or the use of proceeds.
(1) If a consumer applies for $10,000 of
credit for the purpose of financing vision-correction surgery, the
creditor may verify with the surgeon that the procedure will be performed.
If the surgeon reports that surgery will not be performed on the consumer,
the creditor may use that medical information to deny the consumer’s
application for credit, because the loan would not be used for the
stated purpose.
(2)
If a consumer applies for $10,000 of credit for the purpose of financing
cosmetic surgery, the creditor may confirm the cost of the procedure
with the surgeon. If the surgeon reports that the cost of the procedure
is $5,000, the creditor may use that medical information to offer
the consumer only $5,000 of credit.
(3) A creditor has an established medical
loan program for financing particular elective surgical procedures.
The creditor receives a loan application from a consumer requesting
$10,000 of credit under the established loan program for an elective
surgical procedure. The consumer indicates on the application that
the purpose of the loan is to finance an elective surgical procedure
not eligible for funding under the guidelines of the established loan
program. The creditor may deny the consumer’s application because
the purpose of the loan is not for a particular procedure funded by
the established loan program.
6-3510
(d) Examples of obtaining and using medical information
at the request of the consumer.
(1) If a consumer applies for a loan and
specifically requests that the creditor consider the consumer’s medical
disability at the relevant time as an explanation for adverse payment
history information in his credit report, the creditor may consider
such medical information in evaluating the consumer’s willingness
and ability to repay the requested loan to accommodate the consumer’s
particular circumstances, consistent with safe and sound practices.
The creditor may also decline to consider such medical information
to accommodate the consumer, but may evaluate the consumer’s application
in accordance with its otherwise applicable underwriting criteria.
The creditor may not deny the consumer’s application or otherwise
treat the consumer less favorably because the consumer specifically
requested a medical accommodation, if the creditor would have extended
the credit or treated the consumer more favorably under the creditor’s
otherwise applicable underwriting criteria.
(2) If a consumer applies for a loan by
telephone and explains that his income has been and will continue
to be interrupted on account of a medical condition and that he expects to
repay the loan liquidating assets, the creditor may, but is not required
to, evaluate the application using the sale of assets as the primary
source of repayment, consistent with safe and sound practices, provided
that the creditor documents the consumer’s request by recording the
oral conversation or making a notation of the request in the consumer’s
file.
(3) If a consumer
applies for a loan and the application form provides a space where
the consumer may provide any other information or special circumstances,
whether medical or nonmedical, that the consumer would like the creditor
to consider in evaluating the consumer’s application, the creditor
may use medical information provided by the consumer in that space
on that application to accommodate the consumer’s application for
credit, consistent with safe and sound practices, or may disregard
that information.
(4)
If a consumer specifically requests that the creditor use medical
information in determining the consumer’s eligibility, or continued
eligibility, for credit and provides the creditor with medical information
for that purpose, and the creditor determines that it needs additional
information regarding the consumer’s circumstances, the creditor may
request, obtain, and use additional medical information about the
consumer as necessary to verify the information provided by the consumer
or to determine whether to make an accommodation for the consumer.
The consumer may decline to provide additional information, withdraw
the request for an accommodation, and have the application considered
under the creditor’s otherwise applicable underwriting criteria.
(5) If a consumer completes
and signs a credit application that is not for medical-purpose credit
and the application containsboilerplate language that routinely requests
medical information from the consumer or that indicates that by applying
for credit the consumer authorizes or consents to the creditor obtaining
and using medical information in connection with a determination of
the consumer’s eligibility, or continued eligibility, for credit,
the consumer has not specifically requested that the creditor obtain
and use medical information to accommodate the consumer’s particular
circumstances.
6-3511
(e) Example of a forbearance practice or program. After an appropriate safety-and-soundness review, a creditor institutes
a program that allows consumers who are or will be hospitalized to
defer payments as needed for up to three months, without penalty,
if the credit account has been open for more than one year and has
not previously been in default, and the consumer provides confirming
documentation at an appropriate time. A consumer is hospitalized and
does not pay her bill for a particular month. This consumer has had
a credit account with the creditor for more than one year and has
not previously been in default. The creditor attempts to contact the
consumer and speaks with the consumer’s adult child, who is not the
consumer’s legal representative. The adult child informs the creditor
that the consumer is hospitalized and is unable to pay the bill at
that time. The creditor defers payments for up to three months, without
penalty, for the hospitalized consumer and sends the consumer a letter
confirming this practice and the date on which the next payment will
be due. The creditor has obtained and used medical information to
determine whether the provisions of a medically triggered forbearance
practice or program apply to a consumer.
