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Red Flag Program Clarification Act of 201

Floor Speech

Location: Washington, DC


Mr. ADLER of New Jersey. Mr. Speaker, I yield myself such time as I may consume.

I rise today in support of the Red Flag Program Clarification Act of 2010. This legislation, which I introduced in the House, will narrow the scope of the Fair and Accurate Credit Transaction Act of 2003.

The FACT Act directed the Federal Trade Commission to promulgate rules requiring creditors to implement programs to detect and respond to so-called red flags that could indicate identity theft. Clearly, we all agree that identity theft is a serious problem and we must respond with strong regulations to protect consumers. That was the intent of the Congress in 2003. This Congress shares that intent.

However, we need to be careful that the laws we pass address the problem and do so in a way that doesn't adversely and unfairly impact small businesses. America's small businesses are struggling in today's tough economy. Congress needs to work in a bipartisan manner to find commonsense solutions to help America's small businesses remain as competitive as possible so they can create good-paying jobs.

I am pleased the House is taking up my legislation that will reduce burdensome regulations on small businesses. The purpose of the Red Flag Program Clarification Act is to limit the type of creditor that must be covered by the FTC's Red Flags Rule.

When I think of the word ``creditor,'' dentists, accounting firms, and law firms do not come to mind. However, the FACT Act, as read by the FTC, states that these professions and others will be required to comply with Red Flag's regulations. It is clear when Congress wrote the law, they never contemplated including these types of businesses within the broad scope of that law. The FTC, to its great credit, has already delayed implementation of the Red Flags Rule numerous times because of this issue. And I want to thank FTC Chairman Jon Leibowitz for his understanding that Congress in no way intended back in 2003 to include these sorts of businesses in the broad scope of the FACT Act.

We must act by the end of this year to head off the potentially damaging impact of this rule, and I am pleased this bill, this bipartisan bill, will provide a permanent solution to this problem. The Senate passed this bill unanimously. The House passed similar legislation, which I co-wrote with Mr. Broun and Mr. Simpson, last year by a narrow vote of 400-0.

I want to thank my colleagues, particularly Congressman Broun and Congressman Simpson, along with Mr. Maffei and Mr. Lee, for their leadership on this issue. I also wish to thank, once again, Chairman Frank and Ranking Member Bachus for allowing this bill to come to the floor. We worked together on a bipartisan basis to solve a problem. Today we achieve a worthy balance the right way, a bipartisan solution to a nonpartisan problem.

Mr. Speaker, I urge passage of this legislation that is so important to our small businesses.

I reserve the balance of my time.


Mr. ADLER of New Jersey. Mr. Speaker, the gentleman from Idaho (Mr. Simpson) and I agree. We agree on lots of things. And we also agree, I think, that this Chamber should see more bills like this, more processes like this.

The House and Senate actually cooperated and got something good done that helps our small businesses, that helps Americans all across this country and that brings a little bit of common sense.

A few years ago, Congress tried to do a good thing and overreached just a little bit with good intent over each little bit. As Mr. Simpson acknowledged, we saw the problem. Chairman Leibowitz of the FTC also saw the problem, and we worked together. The bureaucracy was not inflexible. It showed some restraint and didn't impose an additional burden on small businesses--on the doctors and dentists and lawyers around the country, who are clearly not creditors. So, for once, the process kind of worked.

This gives hope to the people who will be serving in the next Congress. They can work together on a bipartisan basis. This gives hope to people like me, who are leaving at the end of this term, that Congress will continue to function, in some way, in a bipartisan, commonsense manner.

I am satisfied we've done a good job here.

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