FTC Beefs Up Security Mandates For Financial Sector

guest · Nov 1, 2021

FTC Beefs Up Security Mandates For Financial Sector
October 28, 2021
https://duo.com/decipher/ftc-beefs-up-security-requirements-for-financial-sector

The Federal Trade Commission (FTC) has announced sweeping updates to a set of existing requirements, called the Safeguards Rule, which aim to ensure that financial institutions secure consumer data.

The Safeguards Rule, established 19 years ago, mandates that financial institutions develop information security programs to better protect the collection, storage and transmission of sensitive data - including customers' bank account and social security information.
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Under the FTC’s modifications, announced on Wednesday, the criteria for these programs is fleshed out in more detail, and the rule now extends to non-banking financial institutions, such as mortgage brokers. An FTC spokesperson said that these changes are part of the FTC’s periodic review of its rules, in order to ensure they “keep up to date with technological and other changes in the marketplace.”

“Financial institutions and other entities that collect sensitive consumer data have a responsibility to protect it,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement.
“The updates adopted by the Commission to the Safeguards Rule detail common-sense steps that these institutions must implement to protect consumer data from cyberattacks and other threats.”
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As part of the recent changes, the FTC has detailed how financial institutions can develop and implement the required information security programs, by pointing to the specific criteria that needs to be in place. As part of this criteria, for instance, organizations need to make sure they limit who can access consumer data and utilize encryption to secure the data.

Another change will hold financial institutions more accountable in securing consumer data, with the FTC now requiring each organization to designate a “qualified” individual to oversee the program and give periodic reports on the program to a board of directors.
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Moving forward, the FTC is looking for further comments on making additional changes to the rule that would require financial institutions to report certain data breaches, and other security incidents, to the commission.
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FTC: FTC Strengthens Security Safeguards for Consumer Financial Information Following Widespread Data Breaches

Agency updates Safeguards Rule to better protect the American public from breaches and cyberattacks that lead to identity theft and other financial losses
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