FTC Releases Detailed Information Security Requirements and Proposes Breach Notification for Financial Institutions
On October 27, the FTC announced revisions to its Safeguards Rule, which requires certain financial institutions to implement information security programs to protect consumer financial information. The FTC’s Safeguards Rule covers a range of companies that engage in financial activities and are subject to the Gramm-Leach-Bliley Act, including many online financial technology companies, mortgage lenders, and companies otherwise involved in credit transactions, among others.
The FTC voted 3-2 along party lines, to approve the Revised Safeguards Rule. While a joint statement by Democratic commissioners Khan and Slaughter praised the revision as an effort to “meet the challenges of today’s security environment,” the dissenting statement by Republican commissioners Phillips and Wilson criticized the regulations as a “one-size-fits-all” approach to data security that may not be flexible enough to meet its goals.
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