Developments of Note

Federal Banking Authorities Issue
Identity Theft 'Red Flag' Regulations

Federal bank regulators issued a notice of proposed rulemaking concerning identity-theft “red flags” and address discrepancies under sections 114 and 315 of the Fair and Accurate Credit Transactions Act of 2003. 71 Fed. Reg. 40785 (July 18, 2006). According to the Federal Deposit Insurance Co. press release accompanying the NPR, the proposed regulations would require each financial institution and creditor to develop and implement an identity theft prevention program that includes policies and procedures for detecting, preventing and mitigating identity theft in connection with account openings and existing accounts. The proposed regulations include guidelines listing patterns, practices and specific forms of activity that should raise a “red flag” signaling a risk of identity theft.

The Indiana Telephone Privacy Act, which precludes charities from telemarketing through professional fundraisers to citizens who have placed their phone numbers on the Indiana do-not-call list, does not violate the charities' free speech rights under the First Amendment. National Coalition of Prayer, Inc. v. Carter, No. 05-3995, 2006 U.S. App. LEXIS 18946 (7th Cir. July 28, 2006). The appeals court concluded that under U.S. Supreme Court precedent, the state may enable its citizens to take affirmative steps to block the receipt of unwanted messages at home. The court rejected the argument that the act is invalid because it includes limited exceptions for certain types of calls, concluding that the exceptions “bear a legitimate relationship to the important government purpose of protecting residential privacy.”

Federal legislation making it a crime to use misleading words and images on a Web site to intentionally lure users into viewing material that is obscene or harmful to minors was signed into law on July 27. Adam Walsh Child Protection and Safety Act, Pub. L. No. 109-248 (July 27, 2006). Section 703 of the legislation, “Deception by Embedded Words or Images,” provides that anyone who “knowingly embeds words or digital images into the source code of a website” with the intent either to lure anyone into viewing obscenity or to lure a minor into viewing material that is harmful to minors is subject to a fine and imprisonment. The section also provides that “a word or digital image that clearly indicates the sexual content of the site, such as 'sex' or 'porn', is not misleading.”

Federal Banking Authorities Issue
Identity Theft 'Red Flag' Regulations

Federal bank regulators issued a notice of proposed rulemaking concerning identity-theft “red flags” and address discrepancies under sections 114 and 315 of the Fair and Accurate Credit Transactions Act of 2003. 71 Fed. Reg. 40785 (July 18, 2006). According to the Federal Deposit Insurance Co. press release accompanying the NPR, the proposed regulations would require each financial institution and creditor to develop and implement an identity theft prevention program that includes policies and procedures for detecting, preventing and mitigating identity theft in connection with account openings and existing accounts. The proposed regulations include guidelines listing patterns, practices and specific forms of activity that should raise a “red flag” signaling a risk of identity theft.

The Indiana Telephone Privacy Act, which precludes charities from telemarketing through professional fundraisers to citizens who have placed their phone numbers on the Indiana do-not-call list, does not violate the charities' free speech rights under the First Amendment. National Coalition of Prayer, Inc. v. Carter, No. 05-3995, 2006 U.S. App. LEXIS 18946 (7th Cir. July 28, 2006). The appeals court concluded that under U.S. Supreme Court precedent, the state may enable its citizens to take affirmative steps to block the receipt of unwanted messages at home. The court rejected the argument that the act is invalid because it includes limited exceptions for certain types of calls, concluding that the exceptions “bear a legitimate relationship to the important government purpose of protecting residential privacy.”

Federal legislation making it a crime to use misleading words and images on a Web site to intentionally lure users into viewing material that is obscene or harmful to minors was signed into law on July 27. Adam Walsh Child Protection and Safety Act, Pub. L. No. 109-248 (July 27, 2006). Section 703 of the legislation, “Deception by Embedded Words or Images,” provides that anyone who “knowingly embeds words or digital images into the source code of a website” with the intent either to lure anyone into viewing obscenity or to lure a minor into viewing material that is harmful to minors is subject to a fine and imprisonment. The section also provides that “a word or digital image that clearly indicates the sexual content of the site, such as 'sex' or 'porn', is not misleading.”