U.S. Rep. James A. Leach, R-IA, yesterday introduced the Medical Financial Privacy Protection Act, which would serve to fill in the medical privacy concerns raised by the Gramm-Leach-Bliley Act, the financial modernization law that allows banks and insurance companies to merge. As expected, the measure was introduced to protect consumers' medical privacy and ensure that financial firms do not use consumers' health records to determine whether or not to extend credit.
The bill would require financial institutions to obtain customers' consent before sharing individually identifiable health information both within divisions of the company and with outside parties.
Meanwhile, the American Bankers Association and other groups yesterday introduced a list of guidelines for the financial services industry at a press conference in Washington. The guidelines provide some broad guidance for financial services firms' use of customer information, but also promote the industry's own agenda with such rules as, “Sharing information within the family of companies improves customer service.”
A spokesman for Leach applauded the industry's effort at self-regulation, but said the force of federal law was needed.
The MFPPA creates an opt-in format for obtaining customer consent to share medical information and prohibits its use for establishing credit. The MFPPA gives consumers the right to inspect and correct individually identifiable health information and places restrictions on the reuse of such information legitimately obtained by a financial institution. The act also calls for financial services firms to obtain specific consent before releasing mental health records.
The Leach spokesman said the bill is similar to the medical privacy regulations that Leach introduced last year as part of Gramm-Leach-Bliley Act, which becomes effective in November. Those regulations were removed from the bill last year with the expectation that separate legislation would be introduced this year.
The Senate is considering introducing legislation similar to the MFPPA, according to the Leach spokesman.