Tuesday, November 30, 2010

One Way Around Red Flag Rule for Law Firms -- Cut Down the Pole

While the ABA and FTC fight over Red Flag rules in court, those potentially affected by its provisions have opened a new plan of attack. As Hogan Lovells reports, H.R. 6420, the “Red Flag Program Clarification Act of 2010," was just introduced in Congress:
  • "H.R. 6420 seeks to narrow the scope of the Rule by exempting from the definition of 'creditor' a creditor that 'advances funds on behalf of a person for expenses incidental to a service provided by the creditor to that person.'"
Taking a lesson from those that don't like to lose, it appears that some of the organizations subject to these rules are attempting to change the conditions of the test.