The Red Flags Rule
The Red Flags Rule was promulgated in 2007. It was enacted into law as part of the Fair and Accurate Credit Transaction Act of 2003 (FACT Act or FACTA). The purpose of FACTA was to update and amend the Fair Credit Reporting Act (FCRA).
To better define the term “update and amend” the official purpose was “to amend the Fair Credit Reporting Act, to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and consumer access to, credit information, and for other purposes.”
As people who deal with consumer credit reports, this Act had quite an effect on mortgage brokers. Implementation of FACTA created disclosures and other provisions of credit information management that dramatically changed how mortgage lenders and brokers communicate with consumers.
Upon completion of The Red Flags Rule course, you will:
- Understand the origin, implementation timeline and enforcement of the Red Flags Rule
- Gain a full understanding of the purpose of the Red Flags Rule
- Understand who needs to comply with the law and able to identify the types of “covered accounts”
- Be able to implement and design a personal program under the Red Flags Rule
RED FLAGS RULE IMPLEMENTATION TIMELINE
In order to give impacted organizations the appropriate time to prepare and implement the requirements of the Red Flags Rule, it wasn’t slated for implementation until November of 2008. The actual implementation date however was eventually extended first to May 1, 2009 and then a second time to November 1, 2009.