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IBA: Lawyers Exempted from Red Flags Rule

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Following aggressive advocacy by organized bar associations around the country, the end is in sight regarding how the Federal Trade Commission should apply the “Red Flags Rule.”  The U.S. Senate voted last week to clarify the rule so that lawyers are clearly not included.

At issue was whether lawyers would be considered “creditors” under the so-called FTC’s Red Flags Rule, and would thus be required to develop programs identifying, detecting, and responding to the warning signs (“red flags”) of identity theft.

On Aug. 27, 2009, the American Bar Association filed suit against the FTC in the U.S. District Court for the District of Columbia. On Oct. 29, 2009, the ABA’s motion for summary judgment for declaratory and injunctive relief from the Rule’s application to lawyers was granted. On Dec. 1, 2009, Judge Reggie Walton issued his full opinion in support of the ABA’s motion, the principal arguments of which are supported by the state and local bar amici.

The amicus curiae brief stated that adhering to the Rule, if it had gone into effect as applicable to lawyers, would have been particularly detrimental to small firms and solo practitioners, “The burden to create such a plan will fall disproportionately upon small law firms and solo practitioner lawyers in this country who represent the great majority of clients and whose time and resources are already spent serving the needs of their clients.”

The state and local bars also emphasized the historical regulation at the state level of lawyer conduct and the “sacrosanct confidentiality of client financial information.”

At press time action by the U.S. House of Representatives was pending.•

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  2. What a fine example of the best of the Hoosier tradition! How sad that the AP has to include partisan snark in the obit for this great American patriot and adventurer.

  3. Why are all these lawyers yakking to the media about pending matters? Trial by media? What the devil happened to not making extrajudicial statements? The system is falling apart.

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  5. Could be his email did something especially heinous, really over the top like questioning Ind S.Ct. officials or accusing JLAP of being the political correctness police.

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