The U.S. House of Representatives today passed "The Red Flag Program Clarification Act of 2010." U.S. Rep. Paul Broun, M.D. (GA-10) cosponsored a similar bill, H.R. 3763, which exempts many small business owners and other unrelated businesses from burdensome regulations established in the Fair and Accurate Credit Transaction Act of 2003.
"Similar to many federal regulations, several unintended consequences resulted from the Fair and Accurate Credit Transaction Act. As a result, accounting, legal and healthcare practices were subjected to unrelated and over burdensome regulations. I am pleased that my colleagues in both the House and Senate supported this bill. At a time when we are experiencing record high unemployment, Congress needs to provide our nation's job creators relief from unnecessary regulations. This legislation will do just that," said Broun.
Due to requirements in the Fair and Accurate Credit Transaction Act of 2003, the Federal Trade Commission established "Red Flags", which requires 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 that could lead to potential identity theft. Due to broad language, many unrelated small businesses were considered creditors and bound to these burdensome regulation. "The Red Flag Program Clarification Act" simply defines which businesses should be considered creditors. The bill passed the Senate by unanimous consent last week, and the House unanimously passed similar legislation, cosponsored by Broun, last fa