On the recordNovember 30, 2010
I rise today in support of S. 3987, the Red Flag Program Clarification Act of 2010, legislation that Senator Begich and I have introduced to narrow the scope of section 114 of the Fair and Accurate Credit Transactions Act of 2003--the FACT Act. This section of the FACT Act directed financial regulatory agencies, including the Federal Trade Commission, FTC, to promulgate rules requiring ``creditors'' and ``financial institutions'' to implement programs to detect and respond to red flags--patterns, practices, or specific activities--that could indicate identity theft. The purpose of the Red Flag Program Clarification Act of 2010 is to identify and limit the type of ``creditor'' that must be covered. If the FTC's final red flags rule is implemented, this rule could require small businesses to undertake costly, burdensome measures to prevent identity theft in industries where it poses little threat. Identity theft is a serious problem, but the definition of ``creditor'' for purposes of the FTC's red flags rule is too broad and would cover small businesses that pose little risk to consumers.
