Governance Controls at Center of FTC Financial Data Privacy Rule

Financial institutions face heightened expectations for corporate accountability and oversight of data security measures under the Federal Trade Commission’s new rule for protecting their consumer information.

The FTC’s Safeguards Rule, updated Oct. 27, directs financial institutions to designate a person in charge of security controls, such as a chief information security officer, who will report regularly to the board of directors.

The directives represent a recognition that boards are increasingly concerned about cybersecurity, according to Brittany Bacon, a partner in Hunton Andrews Kurth LLP’s privacy and cybersecurity practice.

“It sends a clear message that cybersecurity continues to be ...