On November 30, 2012, the Federal Trade Commission (FTC) issued an interim final rule related to its identity theft “Red Flags Rule” that amends the regulatory definition of “creditor” to make it consistent with the revised definition adopted by Congress in the Red Flags Program Clarification Act of 2010 (the “Clarification Act”). The interim final rule takes effect on February 11, 2013. Public comments on the interim final rule will be accepted by the FTC until this date.

The Clarification Act narrows the applicability of the Red Flags Rule to creditors (as defined in the Equal Opportunity Act) that regularly and in the ordinary course of business engage in at least one of the following three types of conduct:

- Obtain or use consumer reports, directly or indirectly, in connection with a credit transaction;

- Furnish information to consumer reporting agencies in connection with a credit transaction; or

- Advance funds to or on behalf of a person, based on an obligation of the person to repay the funds or repayable from specific property pledged by or on behalf of the person.