FTC DELAYS MANDATORY COMPLIANCE DATE FOR RED FLAGS RULE YET AGAIN
The Federal Trade Commission (FTC) announced on May 28, 2010 that it will once again delay enforcement of its “Red Flags Rule” until December 31, 2010. The rule, promulgated under the Fair and Accurate Credit Transactions Act of 2003 (FACTA), had an original mandatory compliance date of November 1, 2008. The FTC has extended the compliance date several times already. See Alerts dated October 23, 2008 and May 4, 2009.
The applicability of the Rule has been a continuing subject of debate because of the broad definition of “creditors” subject to the requirements. Members of Congress urged the FTC to delay enforcement through the end of the year to give Congress time to reach a consensus on the types of businesses that should be covered. The FTC believes that a limited further postponement is warranted so that it does not begin to enforce a regulation that Congress plans to supersede. Accordingly, the FTC is extending its forbearance for bringing any enforcement action for violation of the Rule against a financial institution or creditor that is subject to administrative enforcement by the FTC through December 31, 2010 or such earlier date as relevant clarifying legislation is implemented.
As with the earlier delays, this additional extension in enforcement does not extend to the rule regarding address discrepancies applicable to users of consumer reports or to the rule regarding changes of address applicable to card issuers. The delay also does not extend to entities subject to the jurisdiction of any of the other federal agencies that have issued Red Flags Rules, including the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision.
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- Mike Tomkies