Revisiting Red Flags

The Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) adopted joint rules addressing identify theft as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Although we have written articles in previous issues of the Quarterly Report and discussed ITPP at many quarterly meetings, we felt that in light of the new rules adopted by the SEC and the CFTC, the regulators' increased focus on identity theft prevention programs (ITPP), and the requirement that a bank's ITPP be updated periodically, it might be a good time to revisit the Red Flags Rule.

Every bank's ITPP requires continuing administration of the bank's program which includes involvement of the board of directors, a committee thereof, or an appropriate senior management official. Board involvement is very important component of an ITPP and is an indication of the importance of identity theft prevention. During an annual review, the board, senior