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FDIC Federal Register Citations

Keystone Bank

May 19, 2004

Mr. Robert E. Feldman, Executive Secretary
Attention: Comments/Executive Secretary Section
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429

Re: RIN 3064—AC81
12 CFR Part 334
Notice of Proposed Rulemaking Regarding Medical Privacy

Dear Mr. Feldman:

In the matter of this proposed rulemaking, we respectfully make the suggestions following.

The FDIC and the other financial institution regulatory agencies would best serve all of the financial institutions by agreeing on one set of regulations under the Fair and Accurate Credit Transactions Act of 2003 rather than proposing a separate set of regulations by each of the several financial institution regulatory agencies. The savings in paper, in handling, in confusion (caused by slight disparities), and in forward regulation maintenance, etc.; would be quite meaningful we believe.

Specifically with respect to proposed Part 334 of Chapter III of Title 12 of the Code of Federal Regulations, our understanding of Subsections (a), (b), and (c), including the examples set forth therein, indicates that in the event a creditor receives medical information disclosing a medical condition which would reasonably indicate the inability of the proposed borrower to continue to receive income sufficient to make the required payments to the proposed creditor, the creditor may not take that information into consideration in the loan approval process. If a loan decision is based solely upon collateral value of security pledged, this result is reasonable.

However, prudent banking decisions to grant credit are generally based upon the ability of the proposed borrower to repay an obligation out of current income. According to our interpretation of these Subsections, the creditor would be precluded from electing to disapprove in this situation and required to make a loan contrary to safe and sound banking practice.

We suggest appropriate modification to these Subsections.

Thank you.

Yours very sincerely,

Robert L. Levin
Keystone Bank
6021 W. Outer Road, South
Imperial, MO 63052

Last Updated 05/27/2004

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