Branch
Banking and Trust Co.
From: Vaughn, Mark [mailto:MVaughn@BBandT.com]
Sent: Friday, May 28, 2004 3:22 PM
To: Comments
Subject: RIN 3064-AC81
Mr. Robert E. Feldman, Executive Secretary
Attn: Comments
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
RE: 12 CFR Part 334 - RIN 3064-AC81
BB&T Corporation ("BB&T")
appreciates the opportunity to comment on the
joint agencies' proposed rulemaking regarding medical privacy. BB&T
is a
regional financial holding company with numerous banks and non-bank
subsidiaries. Our comments are as follows:
We think the overall regulation prescribed by the joint agencies'
is
appropriate to protect financial institutions needs with respect to
the use
of medical information in the credit granting process.
We think the existence of medical information in a credit file, in
itself,
does not constitute a violation of section 604(g)(2). Section 411(a)
amends
the Fair Credit Reporting Act by adding new section 604(g)(2) to prohibit
creditors from obtaining or using medical information pertaining to
a
consumer in connection with any determination of the consumer's eligibility,
or continued eligibility, for credit. We do not agree that Congress
intended Section 604(g)(2) to "contain two independent prohibitions
- a
prohibition on obtaining medical information and a prohibition on using
medical information" as interpreted by the joint agencies' and
as written in
the proposals' Background Supplementary Information. In fact, we think
the
intent was to follow the precedent set by the use of governmental monitoring
information (ethnicity, race & sex) under the Equal Credit Opportunity
Act.
The intent was to prohibit any creditor from discriminating against
any
applicant, with respect to any aspect of a credit transaction on the
basis
of prohibited factors. Equal Credit Opportunity Act not only allows
creditors to obtain governmental monitoring information in the credit
file
but also requires us to obtain and use this information in certain
cases.
We do not think the intent was to consider these as two independent
prohibitions but an overall attempt at prohibiting creditors from
discriminating against any applicant based on medical information.
The existence of medical information in a credit file does not in
itself
show that a creditor has obtained and used this information in connection
with any determination of a consumer's eligibility for credit. This
will put
an unintentional burden on financial institutions to justify if the
obtained
medical information meets one of the exceptions even though it was
not
actually used in connection with any credit determination. We think
the
focus will be on the information being obtained and not on if it has
been
used in connection with determination of the consumer's eligibility.
We
feel the current proposal will put too much emphasis on the existence
of
medical information and less on how or if this information was used.
It is also true that the mere existence of medical information in
a credit
file would put burden on financial institutions to show written proof
that
it was either solicited by the creditor or provided unsolicited by
the
applicant. Based on the proposal examples regardless if solicited or
unsolicited the creditor should not make a credit decision based on
the
applicant's medical condition. This is true even if the medical information
was obtained in a credit file or verbally received from the consumer.
Again
the burden of proof as to if medical information was used as part of
the
credit determination or if it was solicited or unsolicited by the applicant
should not be the unintentional result of this proposal. Did the creditor
discriminate against any applicant based on medical information?
The joint agencies' should amend their regulation to state that the
existence of medical information in the credit file, in itself, does
not
constitute a violation of section 604(g)(2). 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 as long as the examples of acceptable practices are followed.
The joint agencies' have done a great job at explaining when it is
acceptable to obtain and use medical information. We agree certain
acceptable practices need to be followed. Thank you for the opportunity
to
provide these comments. We understand the difficulty of prescribing
a
regulation that is necessary and appropriate to protect legitimate
business
needs with respect to the use of medical information in the credit
granting
process. We commend you for trying to write a regulation that benefits
all.
Very truly yours,
Mark D. Vaughn
Branch Banking and Trust Co.
Vice President and
Corporate Compliance Officer, CRCM
Phone: 252-246-4347
Fax: 252-246-4895
Email: mvaughn@bbandt.com
