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FDIC Federal Register Citations

North Star Bank

May 13, 2004

Federal Deposit Insurance Corporation
5550 17th St. NW
Washington, DC 20429

Re: Medical Privacy Regulations Under The Fair And Accurate Credit Transactions Act of 2003

Instances exist wherein financial institutions should be able to use available medical information in their risk assessment analysis of creditworthiness and repayment ability. Unscrupulous consumers, armed with information regarding a terminal illness, will load credit cards and debt instruments, with the full knowledge that they will be unable to retire indebtedness during their life expectancy, nor will their estate be sufficient to cover same.

This risk is real and financial institutions should be armed with sufficient knowledge to allow them to use the information available, so as to determine whether or not they want this exposure.

Insurance companies are protected from paying claims through their established fraud exemptions and policy exclusions, and consequently are able to avoid exposure. Banks however, and other financial institutions are not similarly protected. Their biggest challenge is to manage risk for the good of their institution and the communities they serve. Communities include the individuals that make up same. Sound, strong financial institutions are the backbone of a healthy, thriving community.

Section 411 (a) which also amends the FCRA by adding new section 604 (g) (2) is overboard, and overreaching, and prohibits financial institutions from making sound risk management decisions, and same, including all other similarly restrictive covenants, should be repealed.

Time for public comment must be extended. The FDIC, FIL-47-2004 dated April 28, 2004 was received May 12, 2004 allowing only sixteen (16) days for public comment. Hardly enough time to research the issues thoroughly and respond timely. The normal sixty-day (60) time frame for a response should be adhered too. Any lesser time. frame regarding regulations and proposed regulation consideration is inconsistent with intent to foster and receive public comment and is indicative of being forced to accept regulations that are ambiguous and not necessarily in our best interest.

John A. Ritt
Chairman of the Board
North Star Bank
Roseville, Minnesota

Last Updated 08/11/2004

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