Privacy

Introduction  

On August 21, 2020, the California legislature enacted the California Consumer Financial Protection Law (CCFPL), which is to take effect on January 1, 2021.[1]  The law renames the “Department of Business Oversight” (DBO) the “California Department of Financial Protection and Innovation (DFPI)” and, among other things, empowers the department to regulate the offering and provision of consumer financial products or services under California consumer financial laws.[2]  The California legislature noted that the CCFPL strengthens “consumer protections by expanding the ability of the department to improve accountability and transparency in the California financial system and promote nondiscriminatory access to responsible, affordable credit, among other purposes.”[3]  In this blog post, we examine the DFPI’s possible authority over California’s principal privacy laws.  Covington will monitor how active the DFPI is in promulgating and enforcing privacy rules as the contours of the DFPI’s authority become apparent over time.…

Continue Reading Privacy Oversight and the California Department of Financial Protection and Innovation

On February 26, 2020, the Consumer Financial Protection Bureau hosted a symposium titled “Consumer Access to Financial Records.”  Video of the Symposium is available here.  The agenda included discussion among panelists from large financial institutions, fintechs, consumer groups, policy centers, and the CFPB.  Director Kathleen L. Kraninger also delivered brief opening remarks describing the history of regulation of financial data access.

Much of the symposium’s discussion focused on Section 1033 of the Dodd-Frank Act, which governs consumers’ rights to access their financial data.  While the CFPB has the authority to issue rules interpreting Section 1033, it has not done so (although it has issued non-binding “Consumer Protection Principles” on financial data sharing and aggregation).…

Continue Reading CFPB Hosts Symposium on Consumer Access to Financial Records

On March 5, 2019 the Federal Trade Commission (“FTC”) published requests for comment on proposed amendments to two key rules under the Gramm-Leach-Bliley Act (“GLBA”).  Most significantly, the FTC is proposing to add more detailed requirements to the Safeguards Rule, which governs the information security programs financial institutions must implement to protect customer data.

In addition, the FTC is proposing to expand the definition of “financial institution” under the Safeguards Rule and the Privacy Rule to include “finders.”  Finally, the FTC is proposing to amend the Privacy Rule to make technical and conforming changes resulting from legislative amendments to GLBA in the Dodd-Frank Act and FAST Act of 2015.

Proposed Revisions to the Safeguards Rule’s Information Security Program Requirements

The Safeguards Rule establishes requirements for the information security programs of all financial institutions subject to FTC jurisdiction.  The Rule, which first went into effect in 2003, requires financial institutions to develop, implement, and maintain a comprehensive information security program.  As currently drafted, the Safeguards Rule has few prescriptive requirements, but instead generally directs financial institutions to take reasonable steps to protect customer information.

The FTC’s proposed revisions would add substantially more detail to these requirements.  Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, explained that the purpose of the proposed changes is “to better protect consumers and provide more certainty for business.”  The new requirements are primarily based on the cybersecurity regulations issued by New York Department of Financial Services (“NYSDFS”), and the insurance data security model law issued by the National Association of Insurance Commissioners.

Some of the specific proposed changes include:…

Continue Reading FTC Proposes to Add Detailed Cybersecurity Requirements to the GLBA Safeguards Rule

On February 6, the FTC, along with the State of New Jersey, announced a settlement with TV-maker VIZIO related to VIZIO’s alleged data collection practices on millions of its ‘smart,’ network-connected TVs. According to the complaint, VIZIO collected information on consumers which it then shared with third parties, without sufficiently disclosing the data collection…