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If you’ve been working on implementing the revised Safeguards Rule at your business by the upcoming deadline, that’s good news for your company and your customers. Just know that for certain provisions of the updated Rule, the FTC has extended the compliance deadline by six months – to June 9, 2023 – in response to reports of personnel shortages and supply chain issues.

Some regulations may have cryptic titles, but you can’t count the FTC Safeguards Rule on that list. Its clear purpose is to strengthen the data security safeguards that covered companies must put in place to protect customers’ personal information. Last year the FTC announced updates to the Safeguards Rule and later issued a to-the-point publication to help streamline your compliance efforts, FTC Safeguards Rule: What Your Business Needs to Know.

Now to answer two questions that may be on your mind.

What provisions are included in the six-month extension?  Consult the Federal Register Notice for details, but the extension applies to provisions in the revised Rule that require covered companies to:

  • designate a qualified person to oversee their information security program,
  • develop a written risk assessment,
  • limit and monitor who can access sensitive customer information,
  • encrypt all sensitive information,
  • train security personnel,
  • develop an incident response plan,
  • periodically assess the security practices of service providers, and
  • implement multi-factor authentication or another method with equivalent protection for anyone accessing customer information.

Who’s covered by the Safeguards Rule?  The Rule applies to financial institutions within the FTC’s jurisdiction and that aren’t subject to the enforcement authority of another regulator under section 505 of the Gramm-Leach-Bliley Act. You’ll want to read the Rule for the specifics, but here’s the important takeaway point. In this context, the definition of a “financial institution” isn’t a hushed hall with tellers, deposit slips, and ballpoint pens on chains. Rather, the FTC Safeguards Rule covers businesses like mortgage lenders, mortgage brokers, motor vehicle dealers, payday lenders, finance companies, account servicers, check cashing companies, wire transferors, collection agencies, credit counselors and other financial advisors, tax preparation firms, non-federally insured credit unions, and investment advisors that aren’t required to register with the SEC. That’s not an exhaustive list, so if you aren’t sure if you’re covered, now’s the time to nail that down.

The FTC has more resources for your business on the Safeguards Rule in particular and Data Security in general.

1 Comments


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Holly
November 22, 2022

What part(s) must be completed by December 9. I am specifically interested in any December 9th deadlines which apply to a small Powersports business with under 5,000 customers.
Thank you.

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