FTC postpones Red Flag Rule implementation: Effective date now Aug. 1MortgagePress.comFTC, red flags rules, NAMB, identitiy theft, Identity Theft Red Flags and Address Discrepancies
The Federal Trade Commission (FTC) has issued a statement
further delaying enforcement of the the "Identity Theft Red Flags
& Address Discrepancies" Final Rule (Red Flags Rule) under the
FACT Act. The new effective date is scheduled for Aug. 1, 2009.
The rule requires mortgage brokers to develop and implement a
written Identity Theft Prevention Program to detect, prevent, and
mitigate identity theft in connection with certain financial
accounts. Also required is identity theft detection training for
employees including processors, loan officers, and sales managers.
The guidelines accompanying the final rule are designed to assist
financial institutions and creditors in formulating and maintaining
a program that satisfies the requirements of the new rule.
The Red Flags Rule requires companies to:
1. Develop a written program to detect and respond to
potential ID theft.
Red Flag Rule detection programs should be appropriate to your
company. They can be complex customized solutions or simplistic
templates, but must be complete in scope and adhered to by your
company. Detection of identity theft can be accomplished through
3rd-party solutions.
2. Train employees on detection.
You must train employees who are in a position to detect ID theft.
This may be processors, loan officers, sales managers, and more,
depending on your operation. Your plan will address this.
3. Update and review your program
annually.
The written program must be approved by your leadership
annually.
For more information on the FTC's Red Flags Rules, click here.
