Archives: Financial Institutions

Subscribe to Financial Institutions RSS Feed

New York State Proposes Cybersecurity Regulation for Financial Services Institutions

On September 13, 2016, New York Governor Andrew Cuomo announced a proposed regulation that would require financial service institutions to develop and implement cybersecurity programs to prevent and mitigate cyber-attacks.  The proposed regulation will be subject to a 45-day comment period once it is published in the New York State Register. The regulation will become … Continue Reading

FTC Requests Comments on the Safeguards Rule

The Federal Trade Commission (“FTC” or “Commission”) is soliciting public comments on its Standards for Safeguarding Customer Information (“Safeguards Rule”) as part of the systematic review of all FTC rules and guides on a 10-year schedule.  The Safeguards Rule was promulgated by the Commission pursuant to the Gramm-Leach-Bliley Act’s (“GLBA”) directive for federal agencies to … Continue Reading

EU Cyber Security Directive To Enter Into Force In August

The EU Network and Information Security (NIS) Directive now looks likely to enter into force in August of this year.  Member States will then have 21 months to implement it into national law before the new security and incident notification obligations will start to apply to the following entities: designated* “operators of essential services” within … Continue Reading

CFPB Issues $100,000 Fine in First-Ever Data Security Enforcement Action

On March 2, 2016, the Consumer Financial Protection Bureau (CFPB) entered into a consent order with online payment systems operator Dwolla, Inc., based on allegations that Dwolla deceived consumers about its data security practices and the safety of its online payment system. The CFPB brought this action under its authority in Sections 1031(a) and 1036(a)(1) … Continue Reading

Cybersecurity Regulators (Renew) Focus on Outside Vendors of Financial Institutions

By David Fagan and Sumon Dantiki Recently several media outlets reported that the New York State Department of Financial Services (“NYDFS”) sent a letter to many of the nation’s banks, regarding the “level of insight financial institutions have into the sufficiency of cybersecurity controls of their third-party service providers.”  The letter requested financial institutions to … Continue Reading

CFPB Finalizes Rule to Allow Online Privacy Disclosures from Financial Institutions

By Ani Gevorkian On Monday, the Consumer Financial Protection Bureau (CFPB) finalized a rule that promotes more effective privacy disclosures and saves the financial services industry around $17 million dollars.  The new rule permits financial institutions that restrict data-sharing to post their annual privacy notices online rather than delivering them to customers individually.  The rule will … Continue Reading

The FTC’s Agenda to Tackle Big Data and Discrimination

Last Friday, the FTC announced an agenda for its upcoming workshop, “Big Data: A Tool for Inclusion or Exclusion?” which will take place on Monday, Sept. 15, starting at 8:00 a.m.  As we’ve previously reported, the workshop will build on recent efforts by the FTC and other government agencies to understand how new technologies affect … Continue Reading

Ten Things You Should Know About the SEC’s New Cybersecurity Examinations

Last week, the Securities and Exchange Commission announced that it will conduct more than 50 cybersecurity examinations to identify risks and ensure that broker-dealers and investment advisers are adequately protecting customer information.  Below are some key takeaways from the Risk Alert that the SEC’s Office of Compliance Inspections and Examinations released with its announcement:… Continue Reading

Is Korea Moving Towards EU-Style Legislation for Financial Institutions?

By Hee-Eun Kim and Monika Kuschewsky In January 2014, a massive data leak of some 104 million credit card accounts shocked South Korea.  The number of affected accounts was twice the number of the population of South Korea’s.  The incident arose when a temporary employee of a personal credit rating agency that manages personal financial … Continue Reading

Comparison of Five Data-Breach Bills Currently Pending in the Senate

Data security continues to be a hot issue on Capitol Hill, and just yesterday Attorney General Eric Holder urged Congress to create a “strong, national standard” for quickly reporting data breaches to consumers.  Democratic and Republican senators have been busy drafting legislation that would establish national requirements for data security and breach notice.  The following … Continue Reading

SEC Exams of Asset Managers to Include Focus on Cybersecurity

Routine SEC examinations of investment advisers and investment companies this year will include scrutiny of these entities’ cybersecurity policies, an SEC official told attendees Thursday at a national agency-hosted compliance seminar. The SEC’s Regulation S-P, which implements the federal Gramm-Leach-Bliley Act, requires brokers, dealers, investment companies, and registered investment advisers to “adopt policies and procedures … Continue Reading

Covington and the George Washington University’s Cybersecurity Initiative Release Issue Brief on Cyberespionage and Trade Secret Theft

At a co-hosted event last week, Covington & Burling LLP and The George Washington University’s Cybersecurity Initiative released an issue brief on the growing threats of cyberespionage and trade secret theft and responses to address these threats.  The paper provides an overview of existing laws and policy reforms being considered in the U.S. and European … Continue Reading

CFPB Rulemaking Agenda Includes Potential Changes to GLBA Annual Privacy Notice Requirement

Earlier this month, the Consumer Financial Protection Bureau (CFPB) posted its semi-annual update of its rulemaking agenda for the coming 12-month regulatory cycle, including recently-completed rulemakings.  The rulemaking agenda is part of a broader initiative led by the Office of Management and Budget (OMB) to publish a Unified Agenda of federal regulatory and deregulatory actions across … 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 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

President Obama Issues Cybersecurity Executive Order

In his State of the Union message on Tuesday, President Obama announced that he had signed an Executive Order addressing the cybersecurity of  critical infrastructure.  President Obama emphasized that in the face of threats to corporate secrets, the power grid, and financial institutions, among others, “We cannot look back years from now and wonder why … 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 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

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

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
LexBlog