The FTC announced yesterday, October 22, 2008, that it is delaying enforcement of the Red Flag Rules by six months, to May 1, 2009. The delay was based on the fact that a number of institutions, entities, and industries that are subject to the rules but that are not generally governed by FTC regulations were uncertain about the coverage of the new regulation. In addition to financial institutions covered by the other banking agencies, the FTC rules apply to “creditors,” which includes finance companies, automobile dealers, mortgage brokers, utility companies and telecommunication companies.
Note that the November 1 compliance deadline is still effective for institutions subject to OCC, OTS, FRB, FDIC and NCUA regulation. Therefore, banks, thrifts, federally chartered credit unions, and certain of their subsidiaries that are regulated by these agencies, must have their Red Flag Programs in place by the original deadline.
The FTC plans to issue additional guidance as to Red Flag compliance before the delayed compliance deadline.