Financial Update (Fourth Quarter 2006)
Agencies Propose Rules
Early detection emphasized
The proposed prevention programs for card issuers and financial institutions would be required to include policies and procedures for detecting activities that often indicate identity theft and to implement a mitigation strategy appropriate to the level of risk.
New addresses receive focus
A change of address can be one such warning sign. To that end, the proposed regulations would require credit and debit card issuers to pay special attention to a change-of-address request that is followed within 30 days by a request for an additional or replacement card.
The proposed regulations prescribe rules a card issuer must follow in such cases: The card issuer may not issue the additional card unless it notifies the cardholder of the request at the cardholder's former address and provides the cardholder with a means to promptly report an incorrect address, notifies the cardholder of the address change request by another means of communication previously agreed to with the cardholder, or uses other means of verifying the address change in accordance with the policies and procedures the card issuer established to comply with the joint regulations.
Additional proposed regulations would require users of consumer reports to develop procedures to apply when they receive a notice of address discrepancy from a consumer reporting agency.
In addition to the Federal Reserve Board, the agencies proposing the rulemaking are the Federal Deposit Insurance Corp., the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. The rules would implement sections of the Fair and Accurate Credit Transactions Act of 2003, also known as the FACT Act.
Comments received from the public can be viewed on the Board's Web site.