ID Theft Red Flags FAQ IIA2 – Do the Red Flags Rules and Guidelines apply to all banks, savings associations, and credit unions, or only those that directly or indirectly hold transaction accounts belonging to consumers?

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Q:  Do the Red Flags Rules and Guidelines apply to all banks, savings associations, and credit unions, or only those that directly or indirectly hold transaction accounts belonging to consumers?
 
A:  The Red Flags Rules and Guidelines implement section 114 of the FACT Act, 15 U.S.C. § 1681m, which applies to “financial institutions” and “creditors.”
 
The FCRA definition of “financial institution” applies to: (1) all banks, savings associations, and credit unions, regardless of whether they hold a transaction account belonging to a consumer; and (2) any other person that directly or indirectly holds a transaction account belonging to a consumer.  Accordingly, all banks, savings associations, and credit unions are covered by the Red Flags Rules and Guidelines as “financial institutions,” whether or not they hold a transaction account belonging to a consumer.
 
 
ADDITIONAL INFORMATION:
This information was obtained from the Interagency FAQs for Identity Theft Red Flags and Address Discrepancies - https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20090611a1.pdf
 

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