FTC announces fourth Red Flags Rule extension |
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By SearchFinancialSecurity.com Staff
02 Nov 2009 | SearchFinancialSecurity.com |
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Under pressure from Congress, the Federal Trade Commission has again delayed its enforcement of the Red Flags Rule.
The FTC announced on Friday that the financial institutions and creditors it governs, which includes state-charted credit unions, mortgage brokers and auto dealers that offer financing, will have until June 1, 2010 to comply with the rule.
Members of Congress asked the FTC to extend the deadline, the agency said. The extension is the fourth time the FTC has delayed enforcement of the Red Flags Rule for the entities it governs.
The extension doesn't affect other financial regulatory agencies' ongoing enforcement of the Red Flags Rule.
The Red Flags Rule was issued by the FTC and federal banking regulators in October 2007. It requires financial institutions and creditors to implement a written program designed to spot patterns and practices - red flags - that indicate possible identity theft. The regulation implements Sections 114 and 315 of the Fair and Accurate Credit Transactions Act (FACTA) of 2003.
The U.S. District Court for the District of Columbia ruled last week in favor of the American Bar Association in barring the FTC from applying the rule to attorneys. The FTC said its enforcement delay doesn't affect the timeline of that proceeding or any possible appeals.
Pending legislation would exempt health care, legal and accounting firms with 20 or fewer employees (H.R. 3763) from Red Flags Rule compliance.
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