Who enforces the Red Flags Rule?

• A. State regulators
• B. The FTC and other federal regulators
• C. The Consumer Financial Protection Bureau
• D. The Federal Reserve

Answer: (B)

The enforcement of the Red Flags Rule is handled by the FTC along with other federal regulators. This rule, part of the FACT Act, requires certain financial institutions and creditors to implement an identity theft prevention program, and the FTC issued the rule while other federal regulators take on enforcement for entities under their supervision (for example, banks and credit unions are overseen by the federal banking agencies). Because enforcement depends on the type of institution, it isn’t limited to one agency, and state regulators may be involved for state-chartered entities, but the primary enforcement responsibility is shared among the FTC and the relevant federal regulators.