RE: Proposed Medical Privacy Regulations Comments
of Capital One Financial Corporation
Dear Sirs and Madams:
Capital
One Financial Corporation (Capital One) appreciates the opportunity to comment on the Proposed
Rules issued by the Board of Governors of the Federal Reserve System
(the FRB), Federal Deposit Insurance Corporation (FDIC), National
Credit Union Administration (NCUA), Office of the Comptroller of
the Currency (OCC), and Office of Thrift Supervision (OTS) (collectively,
the Agencies) with respect to the medical privacy requirements
contained in Section 411 of the Fair and Accurate Credit Transactions
Act (the FACT Act).
Capital
One had 46.7 million customers and $71.8 billion in managed loans
outstanding, as of March
31, 2004. A Fortune 200 company, Capital One is one of the largest
providers of MasterCard and Visa credit cards in the world. Capital
One also offers medical financing for elective procedures, such as
orthodontic procedures and corrective-vision surgery, through its
Amerifee business. This business involves making unsecured loans
to consumers who choose to undergo certain medical procedures that
typically are not covered by health insurance. To conduct its medical
lending in accordance with the decisions of our customers, our affiliates
and medical network necessarily must obtain and use information that
could be considered medical information.
In support of both this
business activity and consumer protection, we would like to offer
the following comments on the Proposed Rules.
I. Exceptions to the Restriction
on Obtaining and Using Medical Information
We
Support the Agencies Efforts to Draft Exceptions
that Will Allow Consumer-Friendly and Responsible Business Practices
to Continue.
Capital
One appreciates the Agencies willingness to draft practical exceptions to the general
statutory restriction on medical information contained in the FACT
Act. Congress specifically recognized in section 411(b) of the FACT
Act that exceptions would be necessary to allow creditors to continue
ordinary business practices that do not raise the concerns addressed
by the statutory restriction. In this regard, we especially appreciate
the specific examples provided by the Agencies to guide compliance
with the financial information exception and the fraud/confirmation
of proceeds exception. As the Agencies continue to evaluate additional
exceptions, we urge the Agencies to continue to balance consumer
protection concerns with practical business realities.
II. Rulemaking and Enforcement Authority
Under Section 411 of the FACT Act
A. We
Believe the Final Rules Should Apply to a Broader Group of Creditors
to Preserve Existing Medical Financing Practices that Benefit Consumers.
The Agencies should apply the exceptions
in the Proposed Rules to a broader group of creditors so that lenders
may continue to work with doctors and other non-lenders to conduct
existing financing practices. If the Agencies do not broaden the
group of creditors to which these exceptions would apply, the statutory
restriction on obtaining and using medical information will significantly
interfere with current lending practices to the detriment of both
consumers and lenders. Without broader exceptions, the statutory
restriction will also adversely affect the availability of medical
services to consumers, particularly consumers who do not have adequate
medical insurance. We explain below our assessment that the Agencies
have the authority to broaden the coverage of the exceptions to address
these crucial public policy concerns.
Section
411 of the FACT Act amends section 604 of the Fair Credit Reporting
Act (FCRA) to limit the ability
of creditors to obtain or use medical information.1 Section
604(g)(2) of the FCRA states that: Except as permitted pursuant
to paragraph (3)(C) or regulations prescribed under paragraph (5)(A),
a creditor shall not obtain or use medical information . . . pertaining
to a consumer in connection with any determination of the consumers
eligibility, or continued eligibility, for credit. This prohibition
applies to any creditor. The FCRA defines the term creditor in
section 603(r)(5), to have the same meaning as in section 702 of
the Equal Credit Opportunity Act (ECOA). Section 702 of the ECOA
defines creditor as any person who regularly extends, renews,
or continues credit; any person who regularly arranges for the extension,
renewal, or continuation of credit; or any assignee of an original
creditor who participates in the decision to extend, renew, or continue
credit. 2 Thus,
the prohibition in section 604(g)(2) could be construed to apply
to lenders and arrangers of credit that are neither banking institutions
themselves, nor affiliated with banking institutions.
The
Proposed Rule would adopt the general rule of section 604(g)(2)
prohibiting creditors from obtaining or
using medical information in connection with credit eligibility determinations,
and that proposes to adopt the FCRA definition of creditor.
3 In addition, the Agencies each
propose substantially identical exceptions to the general prohibition
against creditors obtaining or using medical information in connection
with credit eligibility determinations.4 The
Agencies proposed regulations differ in one significant respect. Each
of the Agencies regulations would only apply to the creditors that
the Agency views as being subject to its jurisdiction. Typically,
the institutions subject to the Agencies rules appear to be limited
to institutions chartered as a bank, savings association or credit
union and the affiliates of these institutions. The statutory basis
for these jurisdictional determinations is unclear. For example,
the FDIC proposal refers to other entities or persons with respect
to which the FDIC may exercise its enforcement authority under any
provision of law, but this language does not appear in the other
Agencies proposals.5
As a result of the broad statutory prohibition
and the limitation of the proposed exception rules to banking institutions
and some affiliated or related entities, many creditors would be
prohibited from obtaining or using medical information in connection
with credit eligibility determinations, but only a limited group
of creditors would rely on the exceptions. In many cases, the persons
that would be unable to rely on the exceptions would be the nonaffiliated
businesses that assist banks with medical financing. The unavailability
of these exceptions to non-banking entities could have a significant
effect on banks and on the availability of medical services to consumers,
particularly consumers that lack or have limited medical insurance.
B. The
Agencies Should Apply the Exceptions to a Broader Group of Creditors
Because of the Practical Realities and Public Policy Concerns Associated
with Financing Medical Procedures.
Medical financing depends on the participation
of parties other than financial institutions. Doctors, and other
non-bank entities, play a crucial role in the process of making financing
options available in medical transactions in that they are best able
to inform consumers about options related to paying for health care. As
the first link in the chain for determining health care options,
it is critical that doctors be able to present patients not only
with options for a course of treatment or elective medical procedures,
but payment options as well, so that consumers can make informed,
intelligent decisions regarding their required or desired course
of action.
Insurance is frequently unavailable
for certain treatments or elective procedures. Because doctors
know that payment concerns are sometimes a significant determinant
in individual decisions regarding whether to pursue certain options,
particularly elective procedures, doctors will present a patient
with several options on how to pay for the recommended treatment
or procedure. Among the options doctors may choose to present
are payment plans to the office and third-party payment plans designed
specifically for medical services. By limiting the exceptions
for obtaining and using medical information under the FACT Act to
banking institutions and their affiliates, the Proposed Rule would
reduce access to quality medical care as consumers choose to forgo
important treatments or procedures because of the mistaken belief
that they will not be able to finance them.
Insufficient information may also lead
to suboptimal medical decisions not only in doctors offices,
but in other medical businesses as well. For example, if a
medical device store owner is unable to inform consumers of financing
options for equipment such as wheelchairs, consumers may be
forced to make do without needed medical devices due to the mistaken
belief that they have no way to pay for their care.
C. We
Believe the Agencies Have the Authority to Broaden the Scope of
the Proposed Rules to Address these Public Policy Concerns.
The
Agencies have the authority to extend the Proposed Rules to cover
additional creditors, thereby
addressing the public policy concerns discussed above. Section 604(g)(5)(A)
does not limit the persons that may rely on the exceptions created
by any of the Agencies under that provision. Accordingly, read literally,
the exceptions created by the rules of each Agency can apply to all
creditors unless the Agencies limit the scope of the exceptions more
narrowly. We believe this interpretation is particularly reasonable
in light of the references to creditors in section 604(g)(2) the
general prohibition on obtaining and using medical information and
the double reference in section 604(g)(5)(A) to section 604(g)(2)
itself.
In
the area of regulation of financial institutions, it is common
for a statute to designate a particular
agency to prescribe rules that apply to a broad array of entities
even though that agency may not have any other relationship to some
of the entities that are subject to those rules. In many cases, in
a separate section, these statutes designate other agencies to enforce
the provisions of the statute, often according to the jurisdiction
of the relevant federal agency under other law and relying on the
enforcement powers specified by that other law. This model is followed
by many other federal laws, including the Electronic Fund Transfer
Act6 (consumer electronic
banking transactions), the Equal Credit Opportunity Act7 (discrimination in credit), the
Expedited Funds Availability Act8 (availability
of funds deposited in bank accounts and the collection and return
of checks) and the Truth in Lending Act9 (credit
disclosures). Section 604(g)(5)(A) of the FCRA follows this same
model. Rule writing is authorized under section 604(g)(5)(A) and
enforcement by the rule writing and other agencies is specified in
section 621.
Other statutes delegate rule writing
authority to a particular agency and rely on other law for the enforcement
of those rules against entities over which the rule writing agency
does not have direct enforcement authority without ever referring
directly to that enforcement authority. For example, both the reserve
requirements imposed on depository institutions by the Federal Reserve
and the margin requirements for loans for the purpose of purchasing
or carrying securities follow this model. (More detailed descriptions
of these and other statutes where the rule writing authority and
the enforcement authority do not coincide are included in Attachment
A.)
D. Section
604 of the FCRA Allows the Agencies to Write Exceptions that Apply
to a Broader Set of Creditors than Federally Regulated Financial
Institutions and Their Affiliates.
Section 604(g)(5)(A) of the FCRA requires
the Agencies to provide exceptions to the general prohibition that
creditors may not obtain or use medical information in making credit
eligibility determinations. Applying the exceptions established
under section 604(g)(5) to a broader set of creditors would be consistent
with the other rule writing authorizations in the FCRA, such as those
noted above, that are not limited by the enforcement jurisdiction
provisions in section 621 of the FCRA.
The structure of section 604(g) of the
FCRA reinforces the view that the section 604(g)(5)(A) exceptions
should apply to a broader set of creditors. As noted above, section
604(g)(2) of the FCRA refers to exceptions under both section 604(g)(5)(A)
and section 604(g)(3)(C). In stark contrast to section 604(g)(5)(A),
which does not limit the applicability of the exceptions established
under that paragraph, section 604(g)(3)(C) specifically delineates
the coverage of the exceptions under the Agencies regulations. Section
604(g)(3)(C) provides an exception to the FCRAs limitations on affiliate
sharing of medical information if the information is disclosed as
otherwise determined to be necessary and appropriate, by regulation
or order . . . by the Commission, any Federal banking agency or the
National Credit Union Administration (with respect to any financial
institution subject to the jurisdiction of such agency or Administration
under paragraph (1), (2), or (3) of section 621(b)).
Thus
section 604(g) of the FCRA itself includes rule writings that fit
in both categoriesrule
writings where the rules apply to entities for which the rule writer
has enforcement authority under the FCRA and rule writings where
the enforcement authority of the rule writer under the FCRA is irrelevant. Where
Congress intended to limit the coverage of the Agencies rule writing
authority in the FCRA, the FCRA indicates the Congressional intent
to do so. There
is no evidence in section 604(g)(5)(A) of Congressional intent to
limit the entities to which the Agencies rule writing authority
under section 604(g)(5)(A) applies. Consequently, the Agencies are
authorized to write rules under section 604(g)(5)(A) that would apply
to creditors that are beyond the Agencies limited administrative
enforcement jurisdiction.
E. Application
of the Exceptions to a Broader Group of Creditors Would Not Affect
the FTCs Enforcement Authority with Respect to Certain Creditors
under the FCRA.
If the Agencies write regulations that
provide exceptions for certain creditors that are beyond the Agencies administrative
enforcement jurisdiction, these creditors still will be covered by
the administrative enforcement jurisdiction of the FTC under the
FCRA.
Section 621(a) of the FCRA provides
that the FTC shall enforce the provisions of the FCRA with respect
to consumer reporting agencies and all other persons subject thereto,
except to the extent that enforcement of the requirements imposed
under this title is specifically committed to some other governmental
agency under subsection (b). As a result, if an entity has duties
under the FCRA, the entity will be under the FTCs enforcement authority,
unless specifically covered by another agency under section 621(b). Sections
604(g)(2) and 604(g)(5)(A) do not limit the FTCs general enforcement
authority and do not provide an enforcement structure that differs
from sections 621(a) and (b). Accordingly, the FTC is required by
section 621(a) to enforce compliance with section 604(g)(2)
and with regulations providing exceptions to section 604(g)(2)
with respect to any creditors under its jurisdiction.
As
a result of the foregoing analysis, we believe that the Agencies
should broaden the scope of the Proposed
Rule to cover a larger group of creditors to address the crucial
public policy concerns outlined earlier in this letter, and that
section 621 of the FCRA grants the FTC enforcement authority regarding
these regulations with respect to creditors that are not regulated
by the Agencies.
III. Inclusion
of Doctors within the Scope of the Final Rule
If the Agencies Do Not Believe that the Exceptions
Should Apply to All Creditors, the Agencies Should Adopt a Narrower
Exception to Address the Public Policy Concerns Raised by this
Issue.
If the Agencies do not believe the exceptions
should cover certain types of creditors, we believe the Agencies
should include in the scope of the Final Rule doctors and other persons
that arrange credit for financial institutions that are already covered
by the scope of the Proposed Rule. This inclusion would allow these
creditors to continue to help patients, particularly patients without
health insurance, locate financing for their medical treatments and
procedures.
As previously discussed in this letter,
our concern emanates from the fact that the Proposed Rule does not
cover individuals such as doctors who are an important link in the
chain to providing consumers with financing for certain medical treatments,
procedures and products. In this provision of the law, we believe
it was Congress intent to allow the use of medical information in
order to permit certain types of medical lending. Congress intended
to have the exceptions cover individuals and entities such as doctors
that are critical to the medical lending process. Doctors and other
medical professionals play a crucial role in making financing available
for medical transactions. They are often in the best position to
inform consumers of options that they may not otherwise have known
about. In this instance, doctors do not make the credit eligibility
decision, but they do assist in informing consumers of their financing
options and in arranging for that financing to occur.
Not
allowing the exceptions to cover these individuals and entities
would have an extremely detrimental
effect on consumers. Indeed, consumers would be denied access to
certain funding sources needed to assist them in meeting their medical
needs. Of even greater importance, such an approach will have a
disproportionate impact on low and moderate income workers, with
limited or no health insurance and limited resources to afford medical
treatment. As a result, we believe the doctors and other medical
providers that assist financial institutions with the financing of
medical treatments and procedures in the manner described above should
reasonably fall within the scope of the Final Rule.
For
instance, the Agencies could add the following language to the
end of section ___.1(b)(2)
of the Proposed Rules: , and any person arranging credit with these
institutions. This revision would allow parties that work with
financial institutions, such as doctors, to continue their crucial
role in financing medical procedures by applying the exceptions in
the Proposed Rule to those parties. The FTC could then enforce the
rule and the exceptions against those parties pursuant to its authority
under section 621 of the FCRA. We believe this outcome would be
fully consistent with both the FACT Act and FCRA.
IV. Rule of Construction: Persons Who
Assist Banks with Medical Financing
The Agencies Should Clarify that Doctors and
Other Medical Providers Who Assist Patients with Medical Financing
Are Not Obtaining or Using Medical Information to Determine Eligibility
for Credit.
As discussed above, we respectfully
request that the Agencies include doctors and other medical providers
who assist with medical financing within the scope of the Final Rule. We
also request that the Agencies clarify in the Final Rule that the
activities described above do not constitute obtaining or using
medical information for the purposes of determining eligibility
for credit. As a result of this exception, the doctors and other
parties who help patients finance their medical treatments and procedures
by referring them to financial institutions already covered by the
Proposed Rule would be able to continue this important practice.
As a practical matter, doctors generally
do not participate in determining a consumers eligibility for credit. Doctors
provide patients with applications for various plans to which the
patients may apply, but doctors do not review income or credit reports
and they do not advise the financial institution on the credit decision. Thus,
we do not believe that Congress intended to include this activity
in the phrase obtain or use medical information pertaining to a
consumer in connection with any determination of the consumers eligibility,
or continued eligibility, for credit. See Section 604(g)(2) of
the FCRA.
The
Agencies could address this concern by adding the following rule
of construction in section
___.30(b) of the Proposed Rules: a person that arranges credit for
financial institutions covered by section ___.1(b)(2) shall not be
considered to obtain or use medical information pertaining to a consumer
in connection with any determination of the consumers eligibility,
or continued eligibility, for credit if such person does not participate
in the credit decision of the financial institution other than by
providing information to the consumer about the availability, nature,
and terms of the credit being offered by the financial institution
or by providing general administrative assistance to the consumer,
including with respect to the submission of the application to the
financial institution. We appreciate the Agencies attention to
this important public policy issue.
V. Definition of Medical Information
The
Agencies Should Further Clarify the Definition of Medical Information with
Respect to Aggregated Data.
We believe it would be appropriate for
the Agencies to provide clarification that medical information must relate
to or pertain to a specific consumer. For example, a database
of information relating to the repayment behavior of thousands of
consumers, none of whom is personally identifiable, should not be
deemed to be medical information. If such information were medical
information, creditors may have difficulty in utilizing such data
even for basic analytical purposes that have no bearing on any individual. We
do not believe this was the intent of Congress or the Agencies, and
we urge the Agencies to provide a clarification of this issue in
the Final Rule or its commentary.
VI. Debt Cancellation Contracts and
Debt Suspension Agreements
We
respectfully recommend that debt cancellation contracts (DCCs) and debt suspension agreements
(DSAs) be subject to a specific exception to the prohibition on
the use of medical information, rather than an interpretation of
what constitutes eligibility for credit. Such an exception would
be consistent with the FACT Act and the legislative history of the
FACT Act, and it would also eliminate operational and legal uncertainties
associated with the Proposed Rules.
The Proposed Rules interpret the phrase eligibility,
or continued eligibility, for credit to exclude determinations of
whether provisions of a DCC or DSA are triggered. In effect, this
permits creditors to consider medical information when deciding whether
or not a borrower is eligible for the protection afforded by a DCC
or DSA. This exclusion is particularly important in the case of
DCCs and DSAs that have triggering events related to the health of
a borrower. Many DCCs and DSAs, for example, provide credit protection
in the event that a borrower becomes disabled or dies. Access to
medical information in that context is necessary and appropriate
to the operation of the DCC and DSA. Indeed, without such information,
it would be impossible to determine whether or not a borrower was
entitled to receive the protection promised in the DCC or DSA.
On the other hand, the proposed interpretation
fails to address all circumstances in which medical information may
be considered in connection with a DCC or DSA and creates some legal
uncertainty regarding the application of the regulation to these
products. Therefore, we respectfully recommend that proposed Section
__.30(d) be revised to include the following specific exception for
DCCs and DSAs:
(d)(1)(viii) To determine
the eligibility for, the triggering of, or the reactivation of a
debt cancellation contract or debt suspension agreement.
The Terms and Legislative History of the FACT
Act Support Our Proposed Exception.
The
proposed exception is consistent with the terms of Section 411 of
the FACT Act. New Section 604(g)(5)(A) of the FCRA (as added by
Section 411) expressly empowers the federal banking agencies and
the National Credit Union Administration to except from the prohibition
on the use of medical information transactions that are necessary
and appropriate to protect the legitimate operational, transactional,
risk, consumer, and other needs. An exception for determining the
eligibility for, the triggering of, and the reactivation of DCCs
and DSAs falls within the ambit of this authority. As noted above,
the consideration of medical information in such contexts is necessary
and appropriate to the ability to (1) provide borrowers with promised
protection (triggering and reactivation), and (2) control the risk
and price of DCCs and DSAs (eligibility).
The
proposed exception also is supported by the legislative history accompanying
the FACT Act. The House Report accompanying the Act (House Report
108-263) specifically states that the use of medical information
in connection with credit-related debt cancellation agreements is necessary
and appropriate use of medical information:
The
Committee recognizes that there are limited circumstances in which
a creditor may require
medical information in determining a consumers eligibility or continued
eligibility for credit, for example, to confirm the use of loan proceeds
in connection with loans to finance a specific medical procedure
or device, or to verify a consumers death or disability in connection
with credit-related debt cancellation agreements, and considers the
limited use of medical information in these circumstances and any
similar circumstances the financial regulators may identify, to be
a necessary and appropriate use of medical information for purposes
of this section. (at page 53)
While the foregoing statement
is limited to the verification of a death or disability, a section-by-section
analysis of the Act introduced in the Congressional Record of
December 8, 2003 by the Chairman of the House Financial Services
Committee and the Chairman of the Financial Institutions and Consumer
Credit Subcommittee (who was an original sponsor of the House version
of the Act) indicates that Congress did not intend any part of a
DCC or DSA transaction to be subject to the prohibition on the use
of medical information:
The Federal banking agencies
and the NCUA are directed to prescribe regulations that are necessary
and appropriate to protect legitimate business needs with respect
to the use of medical information in the credit granting process,
including allowing appropriate sharing for verifying certain transactions as
well as for debt cancellation contracts, debt suspension agreements,
and credit insurance that are not generally intended to be restricted
by this provision. (at page 2518) emphasis added
Thus,
we urge the Agencies to establish a broader exception in the Final
Rule for DCC and DSA
transactions. Such an exception not only is consistent with the
FACT Act and its legislative history, but it would also eliminate
the operational and legal uncertainties associated with the Proposed
Rules.
* * *
In conclusion, Capital One supports
the Agencies proposed exceptions to the statutory restriction on
obtaining or using medical information. We respectfully request
that the Agencies make the following changes to the Proposed Rules:
- We
believe that the FCRA, as amended by the FACT Act, allows the
Agencies to write exceptions that apply to a broader
group of creditors, and that the FTC could then enforce those regulations
against the entities that it regulates pursuant to section 621
of the FCRA.
- At a minimum, we believe those additional entities
should include doctors and other medical service providers that
assist patients and financial institutions with the arranging of
medical financing.
- The
agencies should further clarify the definition of medical information with
respect to aggregated data.
- The
Agencies should also create a rule of construction stating that
such activity, when conducted by doctors and other
medical service providers for financial institutions, does not
constitute obtaining or using medical information for the purposes
of section 604(g)(2) of the FCRA.
- Lastly,
we urge the Agencies to clarify the definition of medical information and
to develop a broader exception for certain practices related
to DCCs and DSAs.
We
appreciate the opportunity to comment on the Proposed Rules. If
you have any questions about this letter, please contact me at
(703) 720-2266.
Sincerely,
Andres
L. Navarrete
Director
and Associate General Counsel
Capital
One Financial Corporation
ATTACHMENT
A
Attachment
A is a chart of federal laws that grant rulemaking authority to
an agency or agencies that do not regulate
all of the entities covered by the rule. Other agencies are charged
with enforcing these rules against the entities they regulate, even
though those agencies may not have written the rule itself.
Statute
|
Section
|
Coverage
|
|
|
|
Childrens
On-Line Privacy Protection Act
15 U.S.C. §§ 6501-6506
|
15 U.S.C. § 6502(a)(1)
15 U.S.C. § 6502(b)
15 U.S.C. § 6505(a)
15 U.S.C. § 6505(b)
|
Covered Entities Operators of Web sites
Regulatory Authority FTC
Administrative
Enforcement Authority FTC,
OTS,
FDIC, FRB, NCUA, OCC, Farm
Credit Administration, Secretary of Agriculture, Secretary of Transportation
|
Controlling the Assault of
Non-Solicited Pornography and Marketing Act of 2003
15 U.S.C. §§ 7701-7713
|
15 U.S.C. § 7704(a)(1)
15 U.S.C. § 7711(a)
15 U.S.C. § 7706(a)
15 U.S.C. § 7706(b)
|
Covered Entities Any person
Regulatory Authority FTC
Administrative
Enforcement Authority FTC
FCC, FDIC, FRB, NCUA,OCC, OTS,
SEC, Farm Credit Administration, Secretary of Agriculture, Secretary of
Transportation, applicable state insurance authority
|
Electronic Funds Transfer
Act
15 U.S.C. §§ 1693-1693r
|
15
U.S.C. § 1693a
15 U.S.C. § 1693b
15 U.S.C. § 1693o(a)
15 U.S.C. § 1693o(c)
|
Covered Entities Financial institutions State or National banks,
a State or Federal savings and loan associations, mutual savings banks, State
or Federal credit unions, or any other person who, directly or indirectly,
holds an account belonging to a consumer.
Regulatory Authority FRB
Administrative
Enforcement Authority FTC
FDIC, FRB, NCUA, OCC, OTS,
SEC, Secretary of Transportation
|
Equal Credit Opportunity
Act
15 U.S.C. §§ 1691-1691f
|
15 U.S.C. § 1691a(e)
15 U.S.C. § 1691b(a)(1)
15 U.S.C. § 1691c(d)
15 U.S.C. § 1691c(c)
15 U.S.C. § 1691c(a)
|
Covered Entities Creditors Persons who regularly extend, renew,
or continue credit; persons who regularly arrange for the extension, renewal,
or continuation of credit; or assignees of an original creditor who
participate in the decision to extend, renew, or continue credit.
Regulatory Authority FRB
The administrative
enforcement agencies may make rules respecting their own procedures in
enforcing compliance with the ECOA.
Administrative
Enforcement Authority FTC
FDIC, FRB, OCC, OTS, NCUA, Farm
Credit Administration, Secretary of Agriculture, Secretary of Transportation,
SEC, Small Business Administration
|
|
|
|
Statute
|
Section
|
Coverage
|
Expedited Funds
Availability Act
12 U.S.C. §§ 4001-4010
|
12 U.S.C. § 4001(12)
12 U.S.C. § 461(b)(1)(A)
12 U.S.C. § 4008(a)
12 U.S.C. § 4009(a)
|
Covered Entities Depository institutions (and branches of foreign
bank)
Federal
Reserve Act
Insured banks, mutual savings banks, savings banks, insured credit unions,
members under the Federal Home Loan Bank Act, and associations or entities
wholly owned by these depository institutions.
Regulatory Authority FRB
Administrative
Enforcement Authority FDIC,
FRB, NCUA, OTS, OCC
|
Federal Reserve Act
Reserve Requirements
|
12 U.S.C. § 461(b)(1)(A)
12 U.S.C. § 461(a)
|
Covered Entities Insured banks, mutual savings banks, savings banks,
insured credit unions, members under the Federal Home Loan Bank Act, and
associations or entities wholly owned by these depository institutions.
Regulatory Authority FRB
Administrative
Enforcement Authority Not
provided
|
Home Mortgage Disclosure
Act
12 U.S.C. §§ 2801-2810
|
12 U.S.C. § 2802(2)
12 U.S.C. § 2804(a)
12 U.S.C. § 2804(b)
|
Covered Entities Banks, savings associations, credit unions, and
any person engaged for profit in the business of mortgage lending.
Regulatory Authority FRB
Administrative
Enforcement Authority FRB,
FDIC, NCUA, OCC, OTS, Secretary of Housing and Urban Development
|
Securities Exchange Act of
1934
Margin Requirements
|
15 U.S.C. § 78g
|
Covered Entities Persons lending for the purpose of purchasing or
carrying securities.
Regulatory Authority FRB
FRB may delegate to the SEC
or Commodity Future Trading Commission
Administrative
Enforcement Authority Not
provided
|
Truth in Lending Act
15
U.S.C. §§ 1601-1615, 1631-1649, 1661-1665b, 1666-1667f
|
15 U.S.C. § 1602(f)
15 U.S.C. § 1604(a)
15 U.S.C. § 1607(d)
15 U.S.C. § 1607(c)
15 U.S.C. § 1607(a)
|
Covered Entities Creditors
Regulatory Authority FRB
The administrative
enforcement agencies may make rules respecting their own procedures in
enforcing compliance with the TILA.
Administrative
Enforcement Authority FTC
FDIC, FRB, NCUA, OCC, OTS,
Farm Credit Administration, Secretary of Agriculture, Secretary of
Transportation
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Truth in Savings Act
12 U.S.C. §§ 4301-4313
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12 U.S.C. § 4313(6)
12 U.S.C. § 461(b)(1)(A)
12 U.S.C. § 4308(a)
12 U.S.C. § 4309(c)
12 U.S.C. § 4309(a)
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Covered Entities Depository institutions
Federal
Reserve Act
Insured banks, mutual savings banks, savings banks, insured credit unions,
members under the Federal Home Loan Bank Act, and associations or entities
wholly owned by these depository institutions.
Regulatory Authority FRB
The administrative
enforcement agencies may make rules respecting their own procedures in
enforcing compliance with the TISA.
Administrative
Enforcement Authority FDIC,
FRB, NCUA, OCC, OTS
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ATTACHMENT
B
Attachment
B is an analysis of the different types of rulemaking authority
that Congress granted to varying federal
regulatory agencies in the FACT Act. We have provided attachment
B.
May
27, 2004
The FCRA Employs Approaches to this Issue that
Vary by Topic.
The
FCRA itself, as amended by the FACT Act, includes an array of
rule writing models ranging from
rule writing authorities that are limited to those entities that
are subject to the rule writing agencys enforcement authority
under the FCRA, to provisions that authorize a single agency to
write rules that apply to entities regardless of the enforcement
scheme specified in the FCRA or any other law. The rule writing
authorizations in the FCRA can be categorized into two categories. The
first category of rule writing authorizations authorizes or requires
multiple agencies to write rules that apply to the entities that
fall under those agencies administrative enforcement jurisdiction
in section 621 of the FCRA. For example, section 615(e) of the
FCRA directs the Agencies and the Federal Trade Commission (FTC)
to establish red flag guidelines and prescribe regulations, with
respect to the entities that are subject to their respective enforcement
authority under section 621 of the FCRA. Similarly, sections 605(h),
623(e) and 628 and a note to section 624 of the FCRA direct the
Agencies and the FTC to write rules with respect to the entities
that are subject to their respective enforcement authority under
section 621 of the FCRA.1
The second category of FACT Act rule
writing authorizations authorizes or requires an agency or agencies
to write rules that cover entities that are both within, and beyond,
the agencys or agencies administrative enforcement jurisdiction
under the FCRA. For instance, section 615(h) of the FCRA directs
the FRB and the FTC to jointly prescribe rules to implement the
risk-based pricing notice requirement, including providing exceptions
to the requirement. This notice requirement applies to any person
that uses a consumer report in connection with an application for,
or a grant, extension or other provision of, credit. Accordingly,
the rules written under this provision will apply to national banks,
federal savings associations and federal credit unions, even though
these institutions are not under the enforcement jurisdiction of
the FRB or the FTC under section 621 of the FCRA. Section 615(h)
specifically provides that enforcement is committed exclusively
to the Agencies and officials identified in section 621 of the
FCRA.
Section 615(d)(2) of the FCRA requires
the FTC, in consultation with the Agencies, to write rules requiring
enhanced disclosure of pre-screening opt outs. This regulation
applies to any user of a consumer report making a prescreened offer
of credit or insurance, including banks and others that are not
subject to the enforcement authority of the FTC under the FCRA
or the Federal Trade Commission Act. Unlike section 615(h), section
615(d)(2) does not include a provision providing for the enforcement
of its requirements. Similarly, section 623(a)(7) of the FCRA
requires the Board to prescribe a model notice to be used by any
financial institution that extends credit and regularly and in
the ordinary course of business furnishes information to the national
consumer reporting agencies without specifically providing for
enforcement.