If a bank receives a change of address request from a consumer, what requires the bank to follow up to verify the validity of the request?

The requirement for a bank to follow up and verify the validity of a change of address request primarily stems from the "red flag rules." The red flag rules were established to help financial institutions and creditors protect against identity theft by implementing procedures for verifying the authenticity of requests that could potentially indicate fraud. When a consumer requests a change of address, this could be a sign of identity theft or fraud, particularly if the request comes from a new or unusual location compared to the previous address.

In this context, financial institutions are obligated to take reasonable measures to confirm that the request is legitimate and that the person making the request is indeed authorized to make changes to the account. This includes verifying identity through methods such as contacting the consumer directly, sending a confirmation to the old address, or other means of authentication. Implementing such safeguards is crucial to ensuring the security of consumer information and maintaining trust in the financial system while complying with legal and regulatory obligations concerning identity protection.

The other options listed do not specifically address the issue of validity verification for address changes. The Federal Reserve provides regulations and oversight but does not specifically mandate this verification process. The SAFE Act primarily deals with licensing and registering mortgage loan originators, while the Truth in Lending Act focuses on ensuring clear disclosure of terms