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Fed’l Judge Rules From Bench for ABA: ‘Red Flags’ Doesn’t Apply to Lawyers

Posted Oct 29, 2009, 06:33 pm CST
By Martha Neil

Updated: In a surprise ruling from the bench today, a federal judge in Washington, D.C., agreed with the American Bar Association that the Federal Trade Commission exceeded its authority by applying its "red flags rule" to practicing lawyers.

Congress did not intend lawyers to be considered "creditors" under the Fair and Accurate Credit Transactions Act, held U.S. District Judge Reggie Walton of the District of Columbia, granting a partial summary judgment motion by the ABA in the declaratory judgment action. A subsequent written order (PDF) was issued Oct. 30.

Under Walton's decision, the so-called red flags rule developed by the FTC to impose the statute's identity-fraud-protection provisions on businesses is inapplicable to lawyers outside the financial sector,… Continue reading...



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