Lawyers e-Journal

Thursday, Dec. 2, 2010
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Legislative News

Senate passes a Red Flags Rule bill

Earlier this week the United States Senate passed a Red Flags Rule bill that would exempt lawyers and other entities from the Red Flags Rule.

The Massachusetts Bar Association was actively opposed to the application of the Red Flags Rule to attorneys and voiced its concerns to the Federal Trade Commission.

The MBA, working with the American Bar Association, also communicated its concerns to members of Congress. Ultimately, the ABA filed suit in August following months of work seeking clarification of the rule and its application to lawyers. The District Court for the District of Columbia ruled that the FTC's so-called "Red Flags Rule" cannot be applied to lawyers.

The Red Flags Rule was promulgated by the FTC under the Fair and Accurate Credit Transaction Act (FACTA Act) of 2003. The Red Flags Rule requires certain creditors to develop and implement programs to identify, detect and respond to warning signs of identity theft. The FTC had indicated plans to apply the rule to lawyers, despite the fact that they are not creditors.

The legislation now awaits House action.

Click here to view the bill.


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