AICPA Applauds Enactment of "Red Flags Clarification" Exempting Accountants From Onerous Federal Trade Commission Regulations
Published December 21, 2010
NEW YORK (Dec. 21, 2010) - The following is a statement by AICPA President and CEO Barry Melancon:
The AICPA is pleased Congress passed and the President has signed into law S. 3987, the “Red Flag Program Clarification Act of 2010,” amending the Fair Credit Reporting Act. The AICPA, with help from CPA state societies nationwide, worked tirelessly on this issue. The bill makes clear that CPAs and CPA firms are not classified as “creditors” for the purposes of the Federal Trade Commission's Red Flags Rule. CPAs and CPA firms often do not receive full payment from clients at the time services are rendered. That is not the same as a financial transaction like a bank loan or a credit card where ID theft is a risk. This legislation makes clear that a CPA's billing cycle isn’t an identity theft risk. This legislative fix to a burdensome regulation is a positive development in Washington.
We thank Senators John Thune, Mark Begich and Chris Dodd for their good work in getting this bill passed and making clear in Senate debate that congressional intent is the FTC’s Red Flags rule will not apply to accountants and other professional service providers. The AICPA commends Representatives Barney Frank and Spencer Bachus for bringing the bill to House consideration and we thank the bill’s authors Representatives John Adler, Mike Simpson and Paul Broun.