FTC Seeks Comment on Proposed Amendments to Safeguards and Privacy Rules

March 7, 2019

The Federal Trade Commission proposed amending two privacy regulations in an effort to enhance the security of customer information held by financial companies.

In separate notices to be published in the Federal Register, the FTC is seeking comment on proposed changes to the Safeguards Rule and the Privacy Rule under the Gramm-Leach-Bliley Act (GLBA).

The Privacy Rule requires covered companies to provide notices to consumers that explain their privacy policies and practices. The rule also allows customers to opt out of having their information shared with certain third parties. The Safeguards Rule mandates that financial institutions—including title insurance companies and agents—protect the security, confidentiality and integrity of customer non-public personal information by implementing and maintaining a comprehensive written information security program. ALTA’s Title and Settlement Company Best Practices include policies and procedures

Proposed changes to the Safeguards Rule would require financial institutions to encrypt all customer data, to implement access controls to prevent unauthorized users from accessing customer information and to use multifactor authentication to access customer data. The FTC also has proposed improving compliance with these programs by requiring companies to submit periodic reports to their boards of directors

The FTC said the proposed changes would bring the rules into line with changes implemented by Congress through the Dodd-Frank Act in 2010 and the FAST Act in 2015, which modified the annual privacy notice requirement under GLBA.

The notices seeking comment on the proposed changes to the Safeguards Rule and to the Privacy Rule will be published in the Federal Register soon. Instructions for filing comments appear in the published notices. Comments must be received 60 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.

The Commission vote to submit the Privacy Rule notice for publication in the Federal Register was 5-0. The Commission vote to submit the Safeguards Rule notice for publication in the Federal Register was 3-2. Commissioners Noah Joshua Phillips and Christine S. Wilson issued a dissenting statement.

Contact ALTA at 202-296-3671 or communications@alta.org.