Data Security: Complexity, Cost, and Potential Legislation

The Federal Trade Commission’s recently-released “Consumer Fraud and Identity Theft Complaint Data” shows that for the seventh year in a row, identity theft was the number one consumer complaint category. The issue of data security will continue to present difficulties for both the creditor and ARM community.

The already fractious regulatory landscape is worsened by the possibility of further legislative change. As businesses continue to grapple with how best to comply with the existing federal regulations laid out in the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act, and the Fair and Accurate Credit Transaction Act, several bills were introduced into the 110th Congress carry the potential to alter data security regulations.

Data security continues to be a vexing problem for both creditors and the ARM industry, and though no uniform standard exists, the cost and liability associated with compliance should continue to push the discussion of creating such a standard.

This executive brief covers

• What the Financial Services Industry and the ARM Industry are Currently Doing
• Existing Federal Legislation: GLB, FCRA, FACTA
• The Effects of Current Circumstances Create Increasing Cost of Compliance
• Concerns Regarding Legal and Reputational Liability
• Proposed New Federal Legislation
• What Do We Really Want Out of Compliance and Standards
• Federal Preemption/Federal Standard
  

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