Bulletin: FTC Safeguards Rule
Are You Compliant? FTC Safeguards Rule Already In Effect
The Federal Trade Commission's (FTC) Safeguards Rule, which implements the security provisions of the Gramm-Leach-Bliley Act, became effective May 23, 2003. A financial institution subject to the Safeguards Rule must have in place a comprehensive security program to ensure the security and confidentiality of customer information.
The Safeguards Rule applies both to financial institutions that collect information from their customers, as do OCCC licensees, and to those institutions that receive customer information, such as credit reporting agencies. Specifically, the Rule applies to a company that engages in any of a wide variety of financial activities, such as
- Brokering or servicing consumer loans
- Transferring money
- Preparing individual tax returns
- Offering financial advice or credit counseling
- Collecting consumer debts
A full list of the financial activities that trigger the Rule can be found in section 313.3(k) of the FTC’s Financial Privacy Rule.
To help businesses understand and comply with the Safeguards Rule, the Federal Trade Commission has issued “Financial Institutions and Customer Data: Complying with the Safeguards Rule.”
