ABA Sues FTC To Stop Application of Red Flag Rules to Lawyers

In a move threatened but not expected this soon, the American Bar Association today sued the Federal Trade Commission, in an effort to stop the application of the Red Flags Rule to lawyers.  The Red Flags Rule is scheduled to go into effect on November 1, 2009. 

The complaint (.pdf), which was filed in federal district court in Washington, D.C., seeks declaratory and injunctive relief, with the goal of making clear that lawyers are not "creditors" required to comply with the Red Flags Rule.  Interestingly, nowhere does the complaint suggest that lawyers are not just as vulnerable to identify theft as other professionals.  Rather, the complaint argues that lawyers are regulated at the state level, not by the federal government, and that the FTC has not been given the necessary authority by Congress to change this state of affairs.

The FTC had already delayed its planned enforcement of these rules from August 1 to November 1, in response to the ABA’s objection (see our prior post on the back and forth between the FTC and ABA).  Whether there will be further delays in the Red Flags Rule implementation date or further talks to discuss carving out lawyers, is not yet known.

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