Borrow Smart Compliance

June 30, 2022

Good Morning,

This is a follow-up to our email from earlier this week regarding the new FTC Safeguards Rule (here).

In our previous email, we promised to address the issue of the "impact" of the new rule for those of us in consumer finance.

The new rule will require those in our space to take action.

IMPACT OF THE NEW RULE

What are the essential elements of the new rule? The short answer is:

The appointment of a Qualified Individual to be responsible for oversight

Conduct a written risk assessment

Define the new elements of the information security program

Continuous monitoring or annual penetration test

Training of personnel

Periodic assessment of service providers

A written incident response plan

An annual written report from the Qualified Individual

Of course, these are only the highlights. The written policy we provide from our attorneys will furnish the details.

On a related note, it seems pretty clear the FTC is serious about this rule. We have seen more than one news item about the FTC pursuing breaches and non-compliance. Click here for a recent example of FTC enforcement. And, don't forget that the CFPB has authority as well.

We hope you never need to deal with security issues. But, we believe the likelihood of a security event is significantly higher than zero. It is not insignificant. And, if it happens and you become the target of a federal agency (some states, too) or even direct legal action, as a result, you can expect your compliance with this rule to be an important issue.

Finally, we will provide more information in the coming weeks. We expect our law firm, Troutman Pepper, to have the policy completed soon.

Thanks, and enjoy your fourth of July holiday.

- Max

Questions or comments?

Email us at info@borrowsmartcompliance.com

Direct Tel: 205-733-9926