Archives: Financial Privacy

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FTC Issues Revised Business Guide on Identity Theft Red Flags Rule

By: Kelly Carson Last month, the Federal Trade Commission (FTC) issued an updated “How-To” guide to help businesses and organizations determine whether they are subject to the agency’s Red Flags rule (Rule).  Under the Rule, certain entities are required to establish written programs that are aimed at detecting and preventing identity theft. The FTC’s revised … Continue Reading

FTC Official Highlights FCRA Enforcement as a High Priority

Earlier this month, Maneesha Mithal, Associate Director of the Federal Trade Commission’s Division of Privacy and Identity Protection, testified before the U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance regarding consumer report accuracy and the FTC’s efforts to improve accuracy through education and enforcement.  Her testimony emphasized the impact that consumer report errors may … Continue Reading

SEC and CFTC Issue Final Identity Theft Rule

Last week, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) published in the Federal Register a joint rule requiring entities regulated by the agencies to adopt programs to detect and prevent identity theft.  The rule is referred to as the “red flags rule” and applies to certain broker-dealers, mutual funds, investment advisers, futures … Continue Reading

Federal Reserve Releases Report of Mobile Banking and Mobile Payments Use

On March 27, 2013, the Federal Reserve released a report on consumers’ use of mobile banking and mobile payments.  The report follows a similar report issued by the Federal Reserve last year.  The report found that use of mobile banking has increased significantly in the past year while use of mobile payments has increased as well.  … Continue Reading

House Passes Legislation Eliminating Annual GLBA Privacy Notice Requirement

Earlier this week, the House of Representatives passed H.R. 749, the Eliminate Privacy Notice Confusion Act.  The bill is sponsored by Rep. Blaine Leutkemeyer (R-MO) and Rep. Brad Sherman (D-CA).  An earlier version of the bill passed the House in December but was never taken up by the Senate.  We previously covered similar legislation introduced by … Continue Reading

FTC Issues Report on Mobile Payments

Last Friday, the Federal Trade Commission released a report, Paper, Plastic…or Mobile?, on the use of mobile payments.  The report follows a workshop hosted by the FTC in April 2012 that explored innovative mobile payment products and services, the potential benefits offered by mobile payments, and the concerns they raise.  For purposes of the report, mobile … Continue Reading

FTC Study Details Inaccuracies in Credit Reports

This week, the Federal Trade Commission released a study of the U.S. credit reporting industry and credit report accuracy.  The study found that five percent of consumers had errors on one of their three nationwide credit reports that could lead them to pay more for financial products.  The study is required under section 319 of the … Continue Reading

PCI Council Releases PCI-DSS Cloud Computing Guidelines

On February 7, 2013, the Payment Card Industry (PCI) council released a supplement to the payment card industry data security standards (PCI-DSS) on the use of cloud technologies and considerations for maintaining PCI DSS controls in cloud environments.  The supplement is intended for merchants, service providers, assessors, and other entities in evaluating the use of cloud … Continue Reading

FFIEC Proposes Social Media Guidance

On January 22, 2013, the Federal Financial Institutions Examination Council proposed guidance on the applicability of consumer protection and compliance laws, regulations, and policies to activities conducted via social media by depository institutions.  The proposed guidance would not impose additional compliance obligations on institutions.  Instead, the guidance is intended to help financial institutions understand potential … Continue Reading

FDIC Highlights Mobile Payment Technologies and Related Risks

In its most recent issue of the Supervisory Insights newsletter, the Federal Deposit Insurance Corporation (FDIC) describes mobile payment technologies, the risks they pose to depository institutions, and the regulatory framework applicable to such technologies.  The FDIC notes the widespread use of smartphones as a payment technology and the increasing availability of point-of-sale terminals equipped … Continue Reading

FTC Enters into Consent Order with Mobile Application Developers for Fair Credit Reporting Act Violations

Last week, the Federal Trade Commission entered into a consent order with two companies alleged to have operated as consumer reporting agencies, by providing criminal record reports through mobile applications, without complying with the Fair Credit Reporting Act (FCRA).  The consent order represents the FTC’s first FCRA case involving mobile applications.  According to the FTC’s complaint, Filiquarian … Continue Reading

FTC Announces Amended Rule on Identity Theft “Red Flags”

On Friday, November 30, the Federal Trade Commission (FTC) issued an Interim Final Rule to amend its Red Flags Rule, which requires certain financial institutions and creditors to establish programs to detect, prevent and mitigate identity theft in connection with consumer accounts.  The Interim Final Rule narrows the definition of “creditor” in response to legislation … Continue Reading

Government May be Immune to Suits Alleging Violations of FACTA

The U.S. Supreme Court ruled on Tuesday that the federal government does not always lose its sovereign immunity to damages lawsuits claiming that an agency violated the Fair and Accurate Credit Transactions Act (“FACTA”) by printing the expiration date of a credit card on a receipt issued to a consumer. In a unanimous decision, authored … Continue Reading

CFPB Offers Assistance for Consumer Credit Reporting Complaints

Last week, the Consumer Financial Protection Bureau (CFPB) announced that it had established a process for assisting consumers with credit reporting complaints.  The CFPB previously had implemented similar processes for complaints relating to credit cards, mortgages, bank accounts and services, private student loans, vehicle, and other consumer loans.  The complaint process is intended to complement the … Continue Reading

FTC Finalizes Settlements with Companies for Exposing Sensitive Consumer Information through Installation of Peer-to-Peer File Sharing Software

On October 26, 2012, the FTC finalized settlements with Georgia auto dealer Franklin Budget Car Sales, Inc. and Utah-based debt collector EPN Inc. over charges that each company illegally exposed sensitive personal information of consumers by allowing peer-to-peer (P2P) file-sharing software to be installed on their corporate computer systems.  The final settlements follow a notice-and-comment period … Continue Reading

CFPB Study Assesses Differences in Credit Scores Sold to Consumers and Creditors

Last week, the Consumer Financial Protection Bureau (CFPB) released a study comparing credit scores sold to creditors and those sold to consumers.  The study found that approximately 1 in 5 consumers would, upon purchasing their credit score from a consumer reporting agency, receive a different credit score than the score provided to creditors for use in … Continue Reading

FDIC Official Discusses Implementation of FFIEC Authentication Guidance

In an interview with Information Security Media Group, William Henley, Associate Director of the Federal Deposit Insurance Corporation’s (FDIC) Technology Supervision Branch, discussed the status of the banking industry’s implementation of FFIEC authentication guidance released in July 2011.  Henley generally said that the industry was working towards compliance and offered that FDIC examiners at this stage … Continue Reading

FTC Obtains Second Largest Civil Penalty Under FCRA

An employment background screening company will pay a $2.6 million civil penalty to settle Federal Trade Commission charges under the Fair Credit Reporting Act.   The FTC alleged that HireRight Solutions, Inc., which compiles background reports to assist employers in making hiring and other employment-related decisions, is a consumer reporting agency since its reports “bear on … Continue Reading

CFPB Issues Rule to Supervise Larger Participants in Consumer Reporting Market

The Consumer Financial Protection Bureau (CFPB) has issued a final rule to implement its authority under section 1024 of Dodd-Frank to subject “larger participants” in the consumer reporting market to CFPB supervision.  The rule will have significant consequences for companies in the consumer reporting industry.  The final rule follows a proposed rule issued in February … Continue Reading

FFIEC Issues Risk Management Guidance for Cloud Computing

On July 10, the Federal Financial Institutions Examination Council (FFIEC) issued risk management guidance for depository institutions’ use of cloud computing.  The guidance defines cloud computing generally as “a migration from owned resources to shared resources in which client users receive information technology services, on demand, from third-party service providers via the Internet ‘cloud.’”  The guidance also … Continue Reading

Settlement Reached in Data Security Breach Lawsuit Against Bank

Yesterday, Village View, Inc. reached a settlement with Professional Business Bank, a California state-chartered bank subject to regulation by the Federal Deposit Insurance Corporation (FDIC), over the company’s lawsuit against the bank arising from a data security breach.  In March 2010, Village View lost nearly $400,000 after the company’s bank account was compromised by hackers.  … Continue Reading

FTC Enters into Consent Order with Spokeo over Fair Credit Reporting Act Violations

Yesterday, the Federal Trade Commission entered into a consent decree with Spokeo, Inc., for violations of the Fair Credit Reporting Act.  As reflected in the FTC staff blog post, the FTC’s action against Spokeo is the first FCRA case to address the sale of data collected from online sources, including social media, in the context of employee … Continue Reading

Proposed Bill Would Limit Annual Privacy Notice Requirement Under GLBA

Last week, Rep. Blaine Luetkemeyer (R-MO) introduced legislation (H.R. 5817) to limit the obligations of certain financial institutions to provide an annual privacy notice to consumers.  Under the Gramm-Leach-Bliley Act (“GLBA”), financial institutions must provide customers an initial privacy notice and, for the duration of a customer relationship, an annual privacy notice that describes the … Continue Reading

Federal Reserve Official Testifies Before Congress on Mobile Financial Services

On March 29, 2012, Director of the Federal Reserve’s Division of Consumer and Community Affairs Sandra Braunstein testified before the Senate Banking Committee on consumers’ use of mobile financial services.  Ms. Braunstein distinguished between “mobile banking,” which is a consumer’s use of a mobile device to interact with a financial institution, including checking balances and transferring … Continue Reading
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