The judge who ruled that lawyers can’t be forced to comply with new federal rules meant to prevent identity theft released his written opinion Tuesday. The 40-page document pdf) is pretty much in keeping with U.S. District Judge Reggie Walton’s Oct. 29 comments from the bench. But it provides a lengthy explanation of his on-the-spot decision, made just days before the so-called “Red Flags Rule” had been scheduled to go into effect.
In short, Walton of the District of Columbia found that the Federal Trade Commission overreached when it tried to define lawyers as “creditors.” In 2003, Congress passed the Fair and Accurate Credit Transactions Act, which required businesses that regularly extend credit to customers to come up with a written plan for heading off potential identity thefts. Congress left the definition of creditor somewhat open-ended, but Walton was fairly sure legislators didn’t have lawyers in mind when they wrote the law.
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