On February 24, Congressman Patrick McHenry (NC-10) formally introduced his bill to modernize the Gramm-Leach-Bliley Act (“GLBA”) in the House as H.R. 1165. The bill was first released as a discussion draft in June 2022, although the latest version reflects a number of updates as compared to the initial discussion draft. The bill has
FTC Warns Companies to Remediate the Log4j Vulnerability and Hints at Potential Enforcement Actions
On January 4, 2022, the Federal Trade Commission published a warning to companies and their vendors to take reasonable steps to remediate the Log4j vulnerability (CVE-2021-44228). The FTC provided a list of recommended remedial actions for companies using the Log4j software. The FTC’s warning references obligations under the FTC Act and Gramm Leach Bliley Act (“GLBA”) to take reasonable action to remediate vulnerabilities, and hints at potential inquiries and enforcement actions against companies and vendors that fail to do so. As the FTC notes in its warning, the “FTC intends to use its full legal authority to pursue companies that fail to take reasonable steps to protect consumer data from exposure as a result of Log4j, or similar known vulnerabilities in the future.” …
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New Privacy Bill Provides Opt-Out Rights and New Data Security Requirements
To add to the growing list of federal privacy frameworks introduced this year, Senator Amy Klobuchar (D-MN) has re-introduced the bipartisan Social Media Privacy Protection and Consumer Rights Act of 2021 (S. 1667). Senator Klobuchar introduced the bill originally in 2018 and 2019, although it did not advance to committee in either instance. Senators Kennedy (R-LA), Burr (R-NC), and Manchin (D-WV) have co-sponsored the bill.
Key provisions in this bill include:…
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FTC Proposes to Add Detailed Cybersecurity Requirements to the GLBA Safeguards Rule
On March 5, 2019 the Federal Trade Commission (“FTC”) published requests for comment on proposed amendments to two key rules under the Gramm-Leach-Bliley Act (“GLBA”). Most significantly, the FTC is proposing to add more detailed requirements to the Safeguards Rule, which governs the information security programs financial institutions must implement to protect customer data.
In addition, the FTC is proposing to expand the definition of “financial institution” under the Safeguards Rule and the Privacy Rule to include “finders.” Finally, the FTC is proposing to amend the Privacy Rule to make technical and conforming changes resulting from legislative amendments to GLBA in the Dodd-Frank Act and FAST Act of 2015.
Proposed Revisions to the Safeguards Rule’s Information Security Program Requirements
The Safeguards Rule establishes requirements for the information security programs of all financial institutions subject to FTC jurisdiction. The Rule, which first went into effect in 2003, requires financial institutions to develop, implement, and maintain a comprehensive information security program. As currently drafted, the Safeguards Rule has few prescriptive requirements, but instead generally directs financial institutions to take reasonable steps to protect customer information.
The FTC’s proposed revisions would add substantially more detail to these requirements. Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, explained that the purpose of the proposed changes is “to better protect consumers and provide more certainty for business.” The new requirements are primarily based on the cybersecurity regulations issued by New York Department of Financial Services (“NYSDFS”), and the insurance data security model law issued by the National Association of Insurance Commissioners.
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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…
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…
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…
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 consumer compliance, legal, reputation, and operational risks associated with the use of social media, along with expectations for managing those risks.
The proposed guidance defines “social media” as “a form of interactive online communication in which users can generate and share content through text, images, audio, and/or video.” The FFIEC warns that social media can impact a depository institution’s risk profile by increasing the risk of harm to consumers, compliance and legal risk, operational risk, and reputational risk.
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 opened to the public in June 2012.…
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FTC Settles P2P-Related Data Breach Charges Alleging Failure to Provide Appropriate Security
By Brian Ryoo
The Federal Trade Commission (“FTC”) reached separate settlements with two companies it had accused of exposing sensitive personal information through peer-to-peer (“P2P”) file-sharing software installed on their corporate networks. The complaints filed against the companies alleged that the companies failed to have in place adequate information security policies and procedures, risk assessment protocols, employee training, or other internal compliance measures.…
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