The FTC has proposed amendments to its 2003 Safeguards Rule and the 2000 Privacy Rule, applicable to financial institutions under the Gramm Leach Bliley Act (GLBA). The proposed changes are informed by the FTC’s enforcement experience and are intended to keep pace with technological developments.
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NYDFS Requires Consumer Credit Reporting Agencies to Comply with Cybersecurity Regulation
The New York Department of Financial Services (“NYDFS”) has adopted a regulation that requires “consumer credit reporting agencies” (“CCRAs”) to register with the NYDFS, prohibits CCRAs from engaging in certain practices, and requires CCRAs to comply with certain provisions of the NYDFS cybersecurity regulation.
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OCC Semiannual Risk Perspective Highlights Cybersecurity, Fraud, Money Laundering Concerns
Last week, the Office of the Comptroller of the Currency (“OCC”) published the Spring 2018 Semiannual Risk Perspective (the “Report”), which uses up-to-date data to identify risks to U.S. banks and measure their compliance with applicable laws and regulations. The Report concluded that some of the OCC’s primary concerns are with the elevation in operational risk “as banks adapt business models, transform technology and operating processes, and respond to evolving cyber threats.” The Report also focused on elevated compliance risk associated with bank efforts to “manage money-laundering risks in a complex environment.”
Many of the OCC’s observations and recommendations remained the same from its Fall 2017 report, leaving readers to wonder what will spur less conversation and potentially more action among OCC-supervised banks or concrete guidance by the OCC. Regardless, a common thread running throughout both reports is the potential risk presented to financial institutions by emerging technologies, which carry the simultaneous blessing and curse of greater business opportunities, but also greater operational and compliance risks.
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South Carolina Enacts First Insurance Data Security Act
South Carolina has become the first state to enact a version of the Insurance Data Security Model Law, which was drafted by the National Association of Insurance Commissioners (NAIC) in 2017. Governor Henry McMaster signed the South Carolina Insurance Data Security Act into law on May 14, 2018. The Act will become effective on January 1, 2019.
South Carolina Insurance Director Raymond G. Farmer chaired the NAIC Cybersecurity Working Group that drafted the model law. The South Carolina Act appears to follow the Model Law closely, and bears similarities to cybersecurity laws and regulations enacted in other states and at the federal level – including the New York Department of Financial Services cybersecurity regulations, the new Alabama data breach law, and HIPAA/HITECH data security/breach notification requirements.
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U.S. Supreme Court Rejects Second Bid for Review in Spokeo
The U.S. Supreme Court on Monday denied the petition for certiorari seeking review of the U.S. Court of Appeals for the Ninth Circuit’s most recent decision in Spokeo v. Robins (Spokeo II), foregoing an opportunity to clarify the confusion that has ensued since the Supreme Court’s 2016 decision in Spokeo (Spokeo I
OCC Report Identifies Cybersecurity as Key Risk for Federal Banking System
Last week, the Office of the Comptroller of the Currency (OCC) released its semiannual risk report highlighting credit, operational, and compliance risks to the federal banking system. The report focuses on issues that pose threats to those financial institutions regulated by the OCC and is intended to be used as a resource by those financial institutions to address the key concerns identified by the OCC. Specifically, the OCC placed cybersecurity and anti-money laundering (AML) issues among the three top concerns highlighted in the report.
The OCC called for banks to remain vigilant against the operational risks that arise from efforts to adapt business models, transform technology and operating processes, and respond to increasing cybersecurity threats. The OCC stated that:
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