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FTC Delays "Red Flags" Rule Until 12/31/2010

June 01, 2010

On May 28, the Federal Trade Commission announced it was delaying enforcement of its "Red Flags" rule for the third time, until Dec. 31, for financial institutions and creditors subject to the FTC's jurisdiction. The action was in response to a request from Congress, while officials consider legislation that would affect the scope of entities covered by the rule.

The AICPA is continuing to seek an exemption for public accounting firms before the rule takes effect. FTC enforcement of the rule was scheduled to begin June 1. The "Red Flags" rule requires "creditors" or "financial institutions" with covered accounts to have programs to assist in identifying a potential identity theft. On Nov. 10, the AICPA sued the FTC on behalf of its members over the "Red Flags" rule claiming that CPAs in public practice should not be subjected to it. Earlier this year, the US District Court for the District of Columbia granted a delay of enforcement of the rule for public accounting members of the AICPA for 90 days after an opinion comes down from the Court of Appeals on a similar case brought by the American Bar Association.

For more information, read this
summary of the matter.

This story was published in the CPA Letter Daily on 06/01/2010

The CPA Letter Daily