Enforcement of the Red Flags Rule Delayed Again - Attorneys Exempt?

On October 30, 2009, at the request of Members of Congress, the Federal Trade Commission announced that it is delaying enforcement of the Red Flags Rule until June 1, 2010.   The FTC's announcement may be viewed by clicking the following link:

http://www.ftc.gov/opa/2009/10/redflags.shtm

The Red Flags Rule requires creditors and financial institutions to implement programs to address identity theft.  The broad definition of "creditors", taken from the Fair Credit Reporting Act, has created a great deal of controversy by categorizing as creditors a number of business entities not commonly thought of as creditors.  Included among those businesses caught in the FTC's Red Flag web were hospitals, health care providers and attorneys.

Speaking of attorneys,  District Court Judge Reggie Walton of the Federal District Court for the District of Columbia entered an Order, also on October 30, 2009, granting the American Bar Association's Motion for Partial Summary Judgment in a case relating to the application of the Red Flags Rule to attorneys.  The ABA's motion alleged, among other things, that the FTC exceeded its statutory authority under the Fair and Accurate Credit Transactions Act of 2003 in violation of the Administrative Procedures Act.  The Order indicated that a Memorandum Opinion would be issued by the Court within 30 days of the date of the Order. 

A copy of the Court's Order may be view on the below link to the ABA website.

http://www.abanet.org/media/docs/ABA_v._FTC_Amended_Order.pdf

Prepared by:

Bill Dillon

Florida Board Certified Health Law Attorney