Senate Passes Red Flag Program Clarification Bill

On Tuesday, the U.S. Senate unanimously passed S. 3987, the “Red Flag Program Clarification Act of 2010,” legislation that limits the type of “creditor” that must comply with the Red Flags Rule. To further clarify protection for physicians from misguided federal regulation, Senators John Thune (R-SD) and Christopher Dodd (D-CT) spoke in support of the “Red Flag Program Clarification Act of 2010” and for the Congressional Record indicating that the purpose of this legislation is to clarify that doctors should no longer be classified as “creditors” for the purposes of the Red Flags Rule.

The Red Flags Rule requires creditors to develop identity theft prevention and detection programs, and was originally scheduled to take effect on November 1, 2008.  According to the Federal Trade Commission, physicians who do not accept payment from their patients at the time of service are creditors and must comply with the Rule by developing and implementing written identity theft prevention and detection programs in their practices.  Adamant opposition from national interest groups and pressure from Capitol Hill convinced the FTC to delay the November 1, 2008 compliance deadline on multiple occasions up through December 31, 2010.

Efforts are under way to secure House consideration and passage prior to the adjournment of the 111th Congress.


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