A New General Notice Requirement For Financial Institutions

Highlights

• The Federal Trade Commission (FTC) announced an amendment to the Gramm-Leach-Bliley Safeguards Rule (Safeguards Rule) on Oct. 27, 2023, that will require non-banking financial institutions to report certain security events to the FTC.
• The amendment will apply to financial institutions under the FTC's jurisdiction that suffer a security event in which unencrypted customer information affecting at least 500 consumers is acquired without authorization.
• Only notification to the FTC is required. This amendment to the Safeguards Rule helps the FTC enforce the Rule by incentivizing financial institutions to avoid potential follow-up regulatory review and the reputational hit of public disclosure.