More good news on the “red flags” front.
Following the Senate's lead, the U.S. House of Representatives has passed a measure that narrows the definition of “creditor” in the Fair Credit Reporting Act and thus likely excludes CPAs and CPA firms from having to comply with the Federal Trade Commission's “red flags rule,” which requires certain business entities to “develop and implement written identity theft prevention programs” that could detect the red flags that signal identity theft.
The bill now goes to President Obama, who can choose to either sign it, veto it or take no action and let it become law anyway.
AICPA officials are optimistic that the measure will become law soon since there is “no indication” that President Obama will veto the bill.
It's important to note that the big winners in this effort are CPAs in public practice. Small businesses and non-profits will still have to comply with the FTC's rule by the Dec. 31 deadline.
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