House Votes to Exempt Small Groups from FTC "Red Flag" Rules

On Tuesday, the House voted to exempt small businesses from the Federal Trade Commission's "red flag" rules by a unanimous vote of 400 to 0.

The bill, H.R. 3763, exempts healthcare, legal, and accounting practices with 20 employees or less from "creditor" status under the rules. The "red flag" rules require creditors to implement programs and policies to monitor and combat identity theft by November 1.

The "red flag" rules faced opposition from several professional groups including the American Bar Association and American Medical Association. They felt that the FTC's broad definition of "creditor" included entities that were outside of the Congressional intent of the rules. Under this interpretation, healthcare providers are considered creditors since they defer payment of services until they are reimbursed through a patient's insurer.


Source: BNA