Bill Protecting Medical Financial Privacy Is Introduced
Legislation to plug a loophole in the privacy section of the Financial Services Modernization Act was introduced in the House Tuesday.
The Medical Financial Privacy Protection Act would tighten the protection of personal financial data by prohibiting financial institutions–banks, insurance companies, securities firms, their affiliates and others– from disclosing identifiable health information about their customers without written permission.
The legislation would also impose strict limitations on the disclosure and reuse of that information while prohibiting use of that data to determine a person’s creditworthiness. The legislation was introduced by House Banking Committee Chairman Rep. James A. Leach (R-IA).
In addition, the measure gives consumers access to their personally identifiable health information with the right to inspect, copy and correct any errors. It also encourages government financial regulators – such as the Federal Reserve Board – to develop special policies and practices protecting the confidentiality of data relating to a person’s mental health.
The legislation, referred to the House Banking and Commerce Committees for review, is similar to the medical privacy protections Leach unsuccessfully tried to have included in the financial service act which goes into effect in November.
The act permits the merger of banks, insurance and securities companies and allows them to offer competing products and services, but prohibits them from disclosing any financial information about their customers to affiliates, subsidiaries and others without written authorization.
