OTS Red Flag examination procedures

Now that the Office of Thrift Supervision (OTS) has unveiled its FACT Act Red Flags examination procedures, financial institutions are getting the first concrete look at what they can expect during an examination. With less than three months to go before the November 1 compliance deadline, many banks are realizing that they need to expedite implementation of the necessary policies and procedures.

Identity-fraud risk-management company ID Insight has been following and reporting on the FACT Act Red Flags process since 2003. According to company president Adam Elliott, the OTS procedures will no doubt act as a wake-up call for financial institutions who may have been hoping for a little more leniency in their compliance timeline.

The new prescriptive Red Flag guidelines require institutions to begin scrutinizing address changes on existing customers, as well as new account applications where the application address differs from the information maintained by the credit bureaus.