FTC Postpones Red Flags Rule After Lawmakers Seek Delay
At the request of several members of Congress, the Federal Trade Commission has agreed to postpone until the end of the year enforcement of the controversial new Red Flags Rule that had been scheduled to take effect today.
The rule implements a new federal law that the FTC had interpreted to require professionals including lawyers and physicians to comply with requirements that “creditors” and “financial institutions” take measures to protect consumers from identity theft. However, the FTC announced Friday that it would delay enforcement of the Red Flags Rule, reports the Blog of Legal Times.
The American Bar Association had previously won a federal court ruling that the Red Flags Rule should not be applied to attorneys, and physician groups including the American Medical Association sued the FTC on May 21 after it refused to apply the same reasoning to exclude doctors from enforcement.
“Congress needs to fix the unintended consequences of the legislation establishing the Red Flags Rule–and to fix this problem quickly. We appreciate the efforts of Congressmen Barney Frank and John Adler for getting a clarifying measure passed in the House, and hope action in the Senate will be swift,” said Jon Leibowitz, the chairman of the FTC, in a written statement provided to the legal publication. “As an agency we’re charged with enforcing the law, and endless extensions delay enforcement.”
The Red Flags Rule implements the Fair and Accurate Credit Transactions Act.
Earlier coverage:
ABAJournal.com: “FTC to Appeal Judge’s Decision That ‘Red Flags’ Rule Doesn’t Apply to Lawyers”
ABAJournal.com: “AMA Takes Page from ABA Playbook, Sues FTC Over Red Flags Rule”
