On the recordDecember 7, 2010
I strongly support S. 3987, the Red Flag Program Clarification Act of 2010, which will remove a regulatory burden that our nation's small businesses are facing. In November of 2007, the Federal Trade Commission issued a regulation, known as the ``Red Flags'' rule, as required by section 114 of the Fair and Accurate Credit Transaction Act of 2003. Red Flags required financial regulatory agencies, including the FTC, to craft rules requiring financial institutions and creditors to implement programs to detect and respond to patterns, practices, or specific activities--in other words, ``Red Flags''--that could lead to potential identity theft. The FTC broadly interpreted ``creditors'' to include any business that allows clients to establish a payment plan in exchange for their services rendered, sweeping in many businesses that do not operate as a creditor in the general understanding of the term, such as dentists, doctors, veterinarians, lawyers, accountants, and many other health care providers that offer their clients payment plans. Congress did not intend to have the Red Flags rule cover these types of small businesses when it passed the Fair and Accurate Credit Transaction Act of 2003.
