ICBA - News - News Release - ICBA Urges Regulators to Be Flexible in Proposed Identity Theft “Red Flags”
ICBA News Release Header


ICBA Urges Regulators to Be Flexible in Proposed Identity Theft “Red Flags”

Rigid Rules Would Hurt Tailored Options for Bank Customers

Washington, D.C. (Sept. 18, 2006)—The Independent Community Bankers of America (ICBA) commended federal banking agencies for proposing new procedures to help community bankers protect their customers from identity theft and asked banking regulators to maintain flexibility in their proposed rule to allow individual banks to tailor their policies and procedures to their own unique circumstances. ICBA expressed concern that the proposal could be unduly burdensome and fails to recognize existing steps community banks have already taken to detect and prevent fraud, including identity theft.

"The relationship of trust between community banks and their customers is critical to the ongoing vitality of the community banking industry and is an asset community bankers greatly value," said Robert G. Rowe III, ICBA regulatory counsel, in a comment letter to banking regulators. "It is extremely important that the final rule be sufficiently flexible and allow individual banks enough leeway to develop programs designed to address their own products, services, geographic markets and customer bases." ICBA also stressed that the red flags developed by the agencies should be seen as examples and not a mandatory checklist.

Further, ICBA called on regulators to apply the requirements only to consumer accounts so community banks can focus more fully on protecting consumers. The elements and burdens that would be imposed by the proposal if it is adopted without change will consume resources in both time and money that could be better used to protect consumers by detecting and stopping fraud, including identity theft. ICBA recommended that the proposed definition of identity theft be better focused to help stop true identity theft.

Finally, ICBA urged the agencies to make other changes to the proposal to ensure the final rule meets Congressional intent and protects consumers.

Read the complete comment letter at www.icba.org.