Turinas & Bird, LLC

Strategic Counsel for Cloud Based Technology Companies & Expansion

(646) 679 4313

  • Google+
  • Linkedin
  • Twitter
  • Home
  • About
    • Alice Turinas
    • Alison Bird
  • Services
  • Client Success Stories
    • Testimonials
  • Blog
  • Contact Us
  • Health Tech
  • HR Tech
  • Corporate/Transactions
  • Technology Licensing

FTC GLBA Review: A Foreshadowing of Greater Oversight for FinTech Companies?

September 2, 2016 by Alison Bird Leave a Comment

FTC GLBA ReviewLast week, the Federal Trade Commission (the “FTC”) announced plans to review the Safeguards Rule of the Gramm-Leach-Bliley Act (“GLBA”). The Safeguards Rule requires financial institutions to develop, implement, and maintain a comprehensive, written information security program which contains administrative, technical, and physical safeguards to protect the security, confidentiality, and integrity of customer information. The areas in which the FTC seeks comment suggest that the FTC is evaluating a broader definition of financial institutions and security requirements, issues that could have important implications for FinTech companies.

Safeguards Rule Currently Not Prescriptive

As it stands, the Safeguards Rule is not terribly specific and may not capture all companies working with consumer financial data. In terms of requirements, it instructs financial institutions to identify reasonably foreseeable internal and external data security risks and to design and implement information safeguards to control those risks. In connection with those requirements, there is an expectation that there will be ongoing monitoring and assessment of security procedures and appropriate adjustments as needed.

Safeguards Rule Does Not Currently Reach All Companies Working in the Financial Sector

Another issue that seems to concern the FTC is that GLBA does not reach all companies tinkering in the financial space. It applies only to “financial institutions” (as defined in the Bank Holding Company Act of 1956 (12 U.S.C. § 1843(k)) which are significantly engaged in financial activities. Those companies engaging in activities that are considered to be “incidental” or “complementary” to financial activities are not subject to GLBA. In addition, activities that were determined to be financial in nature after the enactment of GLBA may also be excluded from the Safeguards Rule.

FTC Seeks Comments re Issues of Concern

In addition to more general questions of the relative cost and benefits of the Safeguards Rule to consumers and companies alike, the specific issues raised for comment show a focus on more explicit security and response requirements as well as broadening the reach of GLBA. In particular, the FTC is seeking comment on the following questions:

  • Should the Safeguards Rule include the requirement of a breach response plan?
  • Should the Safeguards Rule be more prescriptive in natures, for instance requiring compliance with the National Institute of Standards and Technology’s Cybersecurity Framework (i.e. the NIST standards) or the Payment Card Industry Data Security Standard (i.e. PCCI)?
  • Should the term “financial institution” be expanded to include activities that the Federal Reserve Board had found to be “incidental” to financial activities”?
  • Should the term “financial institution” also include companies engaged in activities that are closely related to banking but are currently not subject to GLBA because they were not identified as financial activities at the time GLBA was enacted?

While we don’t know what kind of feedback the FTC will receive, and what the ultimate review outcome will be, one thing is clear: the FTC is focused on whether the lack of specificity of the Safeguards Rule is problematic and whether too many companies in the finance sector are able to elude GLBA’s grasp. For those fintech companies either interpreting GLBA security and response requirements loosely, or not subject to GLBA at all, it is a warning shot that the FTC is increasingly concerned about security procedures in the the realm of finance.

Filed Under: Finance Tagged With: FinTech, GLBA, Gramm-Leach Bliley Act

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Our Latest Posts

  • October Executive Health Tech Roundtable
  • Cyber Insurance: Does Your Policy Cover Your Risk?
  • Europe’s New Data Protection Regulation: Far Reaching and Highly Punitive (even for US Companies)
  • Increasing M&A in 2017 Predicted, Benefitting Technology Companies such as Digital Health
  • The Hidden Cost Of Non-Prescriptive Cybersecurity Regulation: Have Regulators Begun To Catch On?

Client Testimonials

Turinas & Bird, LLC
"When I am considering hiring a lawyer, I look at whether they spend time to assess my pain factors, listening to what our needs are going to be. I want problem-solvers rather than over-analyzers, who understand my priorities as well as my issues. Other lawyers look solely at legal issues. Turinas & Bird looks at both the legal issues and practical issues, and then form a strategy. Among other things, I rely on them as an accessible sounding board. They function as our outsourced general counsel."
Bruce Groves President, Emilcott Associates, Inc.
Turinas & Bird, LLC
"When I am considering hiring a lawyer, I look at whether they spend time to assess my pain factors, listening to what our needs are going to be. I want problem-solvers rather than over-analyzers, who understand my priorities as well as my issues. Other lawyers look solely at legal issues. Turinas & Bird looks at both the legal issues and practical issues, and then form a strategy. Among other things, I rely on them as an accessible sounding board. They function as our outsourced general counsel."
Bruce Groves President, Emilcott Associates, Inc.
Turinas & Bird, LLC
"Turinas & Bird is our go-to law firm for our expansion to have a permanent presence in North America. Alice’s experiences as a lawyer in both the US and the UK, our headquarters country, have been invaluable to us. I also appreciate her genuine concern for our issues, and how she understands the challenges in providing professional services to global consumer products companies."
Fiona Blades CEO, MESH Planning
Turinas & Bird, LLC
"With Turinas & Bird, I got exactly what I wanted, from the right person, and knew my company’s interests were well-protected, on our company’s most significant international transaction. Unlike her counterparts at a large law firm, Alice gives us her full attention without needlessly running up the bill. In addition to having significant corporate and international experience, she is friendly, conscientious, quick to understand new situations, and nimble in navigating the best way through a challenging problem. Her advice is straightforward: ‘This is what we need to do to protect your company and achieve your goals.'"
Dr. Ed Guy CTO, Practice Unite
Turinas & Bird, LLC
"When we co-principals of our consulting firm needed a shareholders agreement, I chose Turinas & Bird because of Alice Turinas’ practical, problem-solving approach. From discussions I had with her before she was aware that we were looking for legal advice, it was evident that she had deep experience with joint ventures and co-ownership issues. Alice laid out our choices in a clear, jargon-free way, so we could have our agreement tailored to suit our needs and priorities. Since then she has also advised on client agreements involving intellectual property matters, and has proven once again to be pleasant, responsive and practical. I am confident that she puts our company’s interests before her own; for her, we are not just another source of billable hours."
Beth Williams Principal, Forward Focus, Inc.
Turinas & Bird, LLC
"Alison Bird was instrumental in launching our small business. Her methodical approach in establishing our legal entity and supporting documentation gave me much comfort that we had a solid yet versatile infrastructure to operate the business with the greatest efficiency. Additionally, her ability to think outside of the box helped us to structure solutions to even the most difficult of business challenges. Alison Bird offers the unique combination of great command of the law, great solution orientation, and great charm, rendering her a key advisor in our work."
Heather Ibrahim Leathers Co-founder, Digitod
Turinas & Bird, LLC
"Alice Turinas and Alison Bird are an incredible team with the ability and connections to assemble the best team of partners for their clients. With their meticulous, well-organized and caring approach, I always felt protected and in secure hands. When combined with their rich experience, knowledge and guidance, I knew that I had hired the right lawyers - people I trusted to help me safely grow my business and take it to the next level. I highly recommend Turinas & Bird."
Kimberly Eads Managing Member, Vital Development LLC
Turinas & Bird, LLC
"Alice Turinas has a wide range of technology skills and startup business experience. Thanks to that, she has offered valuable suggestions, and I know Turinas & Bird can handle our needs as we grow. Because I like an answer that addresses the ‘ins’ and ‘outs’ of an issue, Alice made sure that I had a good understanding of the available options, and not just the strict legal answer. And while other firms lack a personal touch and thoroughness, Alice is warm, outgoing and willing to go the extra mile. The results have been excellent: our issues were well understood, and the outcome has been far better than my expectation."
Ryan Gyure CEO, Cannonball Projects, Inc.
Turinas & Bird, LLC
"Alice Turinas enabled us to close the sale of our business by the end of the year, saving us from paying substantially higher taxes had we completed the sale later. This was quite a feat, since she was not only dealing with the buyer, but also obtaining consent to the sale from the national franchise of which our business was a part. There were times when we doubted whether everything could get done before year end, but somehow, with her help, it was finished before our deadline."
MaryAnn & Peter Stajk former owners of a retail battery distributor
Turinas & Bird, LLC
"During a 'crunch' period, Turinas & Bird handled negotiation of several agreements with technology providers. They sent frequent updates and recommendations with just the right amount of detail, demonstrating sophisticated experience and a results-driven attitude."
Helen Allison Group Vice President-Legal (Corporate IT), Wyndham Worldwide Corporation

Our Offices

New York Office
347 Fifth Avenue, Suite 1402
New York, NY 10016
(646) 679 4313
Development@TurinasBird.com

New Jersey office:
30B Vreeland, Suite 210
Florham Park, NJ 07932
+1 (646) 679-4313

Texas office:
2600 Lake Austin Blvd, Suite 5101
Austin, Texas 78703
+1 (646) 679-4313

©2015 Turinas & Bird LLC
Attorney Advertising. Prior results do not guarantee a similar outcome.
Privacy Policy   |   Terms of Use   |   Design Credit