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The Federal Trade Commission (FTC) proposed amendments to two regulations in place under the Gramm-Leach-Bliley Act (GLBA). The regulations – the Safeguards Rule and the Privacy Rule – protect the privacy and security of consumer information held by financial institutions.
The Safeguards Rule, in place since 2003, requires financial institutions to develop, implement and maintain a comprehensive information security program to protect consumer data. The FTC would like to add more specific requirements, which would require applicable financial institutions to:
Note that financial institutions maintaining secure information for fewer than 5,000 consumers would be exempt from certain requirements.
The Privacy Rule, which went into effect in 2000, requires financial institutions to inform consumers of its information-sharing practices and allows consumers to choose not to have their information shared with third parties. However, unlike the Safeguards Rule, this rule only applies to certain motor vehicle dealers. The proposed changes would:
For both rules, the FTC proposes expanding the definition of “financial institution” to include “finders,” or companies that connect consumers looking for a loan with a lender.
Currently the proposed amendments are in a 60-day commenting period. As more information is made available our Financial Institutions Group will keep you updated. Stay tuned! In the meantime, should you have any questions about how this may impact your financial institution, contact one of our team members.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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