If you handle consumer financial data, you need to be aware of the U.S. Federal Trade Commission‘s (FTC) revised Safeguards Rule cybersecurity regulation. The rule applies to a wide range of businesses, including those that may not consider themselves to be financial institutions. The FTC has classified many companies as “non-banking financial institutions” subject to the rule, which requires them to implement specific measures to protect customer data. Compliance with the revised Safeguards Rule is mandatory, and the deadline for implementation is fast approaching. Financial institutions covered by the rule must comply with certain provisions by June 9, 2023. While the FTC has extended the deadline for some changes to the rule, businesses should still take immediate steps to ensure they are in compliance by the deadline.
Understanding the FTC Safeguards Rule is the first step in compliance. The FTC Safeguards Rule is a set of regulations that require covered financial institutions to develop, implement, and maintain an information security program designed to protect customer information. The rule applies to non-bank financial institutions, such as mortgage lenders and brokers, and requires them to take steps to protect sensitive customer information from unauthorized access, use, or disclosure.
In order to protect customer data, businesses must conduct a comprehensive risk assessment to identify potential vulnerabilities and risks, develop and implement a data security program that addresses the risks, implement multi-factor authentication, train employees on data security best practices, and monitor their systems for unusual activity. Businesses must also have an incident response plan in place that outlines the steps to be taken in the event of a data breach.
The deadline for compliance with the revised Safeguards Rule has been extended to June 9, 2023. This provides businesses with an additional six months to assess their data security measures and implement necessary changes. Businesses that fail to comply with the revised Safeguards Rule by the deadline may be subject to enforcement actions by the FTC, including fines and penalties.
Protecting customer data is not only a legal obligation but also a moral responsibility. Businesses must prioritize data security and comply with the revised Safeguards Rule by the June 9, 2023 deadline.
Key Points:
• The FTC Safeguards Rule is a set of regulations that require non-bank financial institutions to develop, implement, and maintain an information security program designed to protect customer information.
• To comply with the revised Safeguards Rule, businesses must conduct a risk assessment, develop and implement a data security program, implement multi-factor authentication, train employees on data security best practices, and monitor their systems for unusual activity.
• The deadline for compliance with the revised Safeguards Rule has been extended to June 9, 2023.
• Businesses that fail to comply with the revised Safeguards Rule by the deadline may be subject to enforcement actions by the FTC, including fines and penalties.
• Protecting customer data is not only a legal obligation but also a moral responsibility. Businesses must prioritize data security and comply with the revised Safeguards Rule by the June 9, 2023 deadline.