On November 10, 2009, the American Institute of Certified Public Accountants (“AICPA”) filed a lawsuit in the U.S. District Court for the District of Columbia on behalf of its nearly 350,000 certified public accountant members against the Federal Trade Commission (“FTC”) to seek an injunction barring the FTC from applying its Red Flags Rule to AICPA members.
As we noted here, the American Bar Association (“ABA”) recently won a similar action on October 30, 2009. Like the ABA, the AICPA argued that the FTC is exceeding its statutory authority by attempting to impose the Red Flags Rule on AICPA members. AICPA argues that “[l]ike the practice of law, the profession of public accountancy, including licensure, professional standards, and discipline of public accountants, is traditionally governed by the States and may be regulated by the Federal Government only when Congress has made its intention to do so ‘abundantly clear’.” The AICPA considers the FTC’s interpretation of the term “creditor” to include accountants arbitrary and capricious.
It remains to be seen how the FTC and the court will respond. We will update this post with any new developments.