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Governance, Risk, Audit & Privacy · Advanced

FTC Safeguards Rule

FTC rule under GLBA requiring non-bank financial institutions to maintain a written information security program with specific controls.

Definition

The amended rule (effective June 2023) requires designating a qualified individual, written risk assessments, access controls, data inventory, encryption, MFA, secure development, change management, monitoring, penetration testing and vulnerability assessments, training, vendor oversight, an incident response plan, and annual reports to the board. Since May 2024 covered entities must notify the FTC of unencrypted data breaches affecting 500 or more consumers within 30 days.

Example

An auto dealership offering financing implements MFA and an incident response plan under the Safeguards Rule.

Exam tip

Car dealers and tax preparers can be financial institutions under GLBA.

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