Thune-Begich Legislation Clarifying Red Flags Rule Signed into Law
WASHINGTON, D.C.-A bill authored by U.S. Sens. John Thune (R-S.D.) and Mark Begich (D-Alaska) to clarify a burdensome regulation by the Federal Trade Commission (FTC) that would otherwise require small businesses to undertake costly and unnecessary measures to prevent identity theft was signed into law by President Obama on Saturday, December 18, 2010.
"After months of collaboration with the FTC, small businesses, and industry stakeholders, I'm pleased to see the Thune-Begich Red Flags bill signed into law," said Thune. "This new law will ensure that small businesses in South Dakota and across our country are protected from unnecessary and misdirected federal regulation."
"Alaska's businesses will be able to start the New Year knowing they won't be unduly burdened by unnecessary and costly federal regulations," said Begich. "Identity theft is a serious issue, and we need to have the correct tools to make sure protections are in place. But this law makes sure the rules don't go too far and businesses are clear on where and how it works."
The FTC issued the Red Flags regulations under the Fair and Accurate Credit Transition Act of 2003, which requires the establishment of guidelines for financial institutions and creditors regarding identity theft. If implemented as planned on January 1, 2011, the FTC's overreaching definition of a creditor would have placed a significant burden on our nation's small businesses. Recognizing this, the FTC delayed implementation of the rule multiple times to allow for Congressional clarification.
The Red Flag Program Clarification Act of 2010 passed the full Senate by Unanimous Consent on November 30, 2010 and passed the full House of Representatives by voice vote on December 7, 2010.