FTC Safeguards Rule Compliance

Understanding the requirements and how we can help your business achieve compliance

What Is the FTC Safeguards Rule?

The FTC Safeguards Rule, established under the Gramm-Leach-Bliley Act (GLBA), requires financial institutions to develop, implement, and maintain a comprehensive information security program to protect customer information. This rule applies to a broad range of entities that collect customer financial information, including:

  • Mortgage brokers and lenders
  • Motor vehicle dealers
  • Payday lenders
  • Financial advisors
  • Tax preparation firms
  • Real estate settlement service providers
  • And other businesses that handle customer financial information

The rule was updated in 2021 with additional requirements, and as of May 13, 2024, financial institutions must also notify the FTC within 30 days of discovering a security breach involving the information of at least 500 consumers.

Key Requirements of the FTC Safeguards Rule

Understanding what your business needs to implement

1. Designate a Qualified Individual

Appoint a person responsible for overseeing and implementing your information security program. This individual must have the knowledge and experience necessary to coordinate your information security program.

2. Conduct Risk Assessments

Identify and evaluate internal and external risks to the security, confidentiality, and integrity of customer information. This includes risks from your information systems, network security, and potential threats.

3. Implement Safeguards

Develop and implement safeguards to control identified risks, including:

  • Access controls to restrict unauthorized access
  • Encryption of customer information in transit and at rest
  • Multi-factor authentication for system access
  • Secure disposal of customer information
  • System inventory and network monitoring

4. Monitor and Test Safeguards

Regularly test the effectiveness of your security program through continuous monitoring or periodic assessments. This includes vulnerability assessments, penetration testing, and regular security audits.

5. Train Staff

Provide security awareness training to personnel. Employees must understand security procedures, recognize potential threats, and know how to respond to security incidents.

6. Oversee Service Providers

Ensure that service providers who have access to customer information maintain appropriate safeguards. This includes contract requirements and regular monitoring of service provider security practices.

7. Develop an Incident Response Plan

Establish a written incident response plan to respond to security events. The plan should include procedures for detecting, responding to, and recovering from security incidents, and must address the FTC breach notification requirements.

8. Report to Board of Directors

The Qualified Individual must report regularly to the board of directors or governing body on the status of the information security program, including any material matters related to the program.

Breach Notification Requirement

Important: New notification requirement as of May 13, 2024

FTC Breach Notification

As of May 13, 2024, the Safeguards Rule requires financial institutions to notify the FTC within 30 days of discovering a security breach involving the information of at least 500 consumers. This notification must be made as soon as possible, but no later than 30 days after discovery.

Your incident response plan must include procedures for meeting this notification requirement. Failure to comply with the breach notification requirement can result in significant penalties and enforcement actions by the FTC.

How NHM Ohio Can Help

Comprehensive services to help you achieve and maintain FTC Safeguards Rule compliance

Our Compliance Services

At NHM Ohio, we understand the complexities of achieving and maintaining compliance with the FTC Safeguards Rule. Our team of cybersecurity and compliance experts can help you implement a comprehensive information security program that meets all FTC Safeguards Rule requirements.

Services We Provide:

Risk Assessments

We conduct thorough risk assessments to identify vulnerabilities in your information security practices, systems, and processes. Our assessments evaluate both internal and external risks to help you understand your security posture.

Security Program Development

We help you develop and implement a comprehensive information security program tailored to your organization's specific needs and risks, including written policies and procedures required by the Safeguards Rule.

Technical Safeguards Implementation

We implement technical safeguards including access controls, encryption, multi-factor authentication, network monitoring, and secure disposal procedures to protect customer information.

Employee Training Programs

We provide security awareness training programs to ensure your staff understands security procedures, recognizes potential threats, and knows how to respond appropriately to security incidents.

Incident Response Planning

We develop comprehensive incident response plans that include procedures for detecting, responding to, and recovering from security incidents, including FTC breach notification procedures.

Ongoing Monitoring & Testing

We provide continuous security monitoring and regular testing of your security controls through vulnerability assessments, security audits, and penetration testing to ensure your safeguards remain effective.

Service Provider Management

We help you oversee service providers by establishing contract requirements, conducting security assessments, and monitoring service provider security practices to ensure they maintain appropriate safeguards.

Compliance Documentation

We help you maintain all required documentation, including security policies, risk assessments, training records, and incident response plans to demonstrate compliance with the Safeguards Rule.

By partnering with NHM Ohio, you can ensure that your organization not only meets the requirements of the FTC Safeguards Rule but also enhances the overall security and trustworthiness of your operations. Our comprehensive approach helps protect your business, your customers, and your reputation.

Ready to Achieve FTC Safeguards Rule Compliance?

Don't wait until you face an enforcement action or security breach. Contact NHM Ohio today to discuss how we can help your business develop and implement a comprehensive information security program that meets all FTC Safeguards Rule requirements.

Get Started Today

Get in Touch

For questions about FTC Safeguards Rule compliance or to schedule a consultation, please contact us or call (330) 587-9583. We're here to help you protect your business and your customers' information.

Related Services: Risk Management | Managed IT Security | Email Security | Data Backup & Recovery