The last extension was also made only days before the November 2009 effective date to June 1, 2010 following a new bill, HR 3763, which the House of Representatives unanimously approved on October 20, 2009. HR 3763, if passed by the Senate would exempt certain businesses with 20 or fewer employees, including healthcare, accounting and legal firms from the Red Flags Rule.
On May 25, 2010, a parallel bill, S 3416 was introduced and submitted to the Senate Committee on Banking, Housing, and Urban Affairs.
The American Bar Association (“ABA”), American Institute of Certified Public Accountants (“AICPA”), and American Medical Association (“AMA”) have filed actions against the FTC to prevent the FTC from enforcing the Red Flags Rules against its members. On October 30, 2009, the U.S. District Court for the District of Columbia granted the injunction sought by the ABA, thereby barring the FTC from enforcing the Red Flags Rule against attorneys. The ruling, however, may only be a temporary reprieve, as the FTC has decided to appeal the decision.
The AICPA also succeeded in obtaining an injunction. On March 18, 2010, the U.S. District Court for the District of Columbia granted a delay in the enforcement of the Red Flags Rule for AICPA members for 90 days after the U.S. Court of Appeals for the District of Columbia renders an opinion in the ABA’s case against the FTC.
On May 21, 2010, the AMA filed a similar complaint for declaratory and injunctive relief to keep the FTC from enforcing the Rule against its members. For now, attorneys and accountants are not subject to the Red Flags Rule. Until these cases are resolved by the court of appeals, however, the reprieve may be only temporary.
We will continue to monitor any new developments and will provide updates here at www.insurereinsure.com.
Click here to view the official press release from the FTC.
