FTC updates data protection safeguards for financial institutions

The Federal Trade Commission Wednesday issued updated data security safeguards for financial institutions designed to protect their customers’ financial information.

The updated Safeguards Rule requires non-banking financial institutions, such as mortgage brokers, motor vehicle dealers and payday lenders, to develop, implement and maintain a comprehensive security system to keep customers’ information safe.

The FTC said the changes include requiring more specific criteria for the safeguards financial institutions must implement, such as limiting who can access consumer data and using encryption to secure data.

Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement that the updates “detail common-sense steps.”

The FTC is also seeking comment on whether to make an additional change to the rule to require financial institutions to report certain data breaches and other security events to the commission.

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