Law / United States

FTC Standards for Safeguarding Customer Information (Safeguards Rule)

FTC Safeguards Rule, 16 CFR 314.1 to 314.4(i) and 314.6

In force since 23 May 2003.

A sector security regimes rule binding private bodies.

As of 27 October 2026.

What it requires

• This instrument reaches your organization only if it is a financial institution over which the Federal Trade Commission has jurisdiction: an entity whose business is an activity that is financial in nature or incidental to such an activity and that is not subject to another regulator's enforcement authority under the Gramm-Leach-Bliley Act, such as a mortgage lender, mortgage broker, finance company, payday lender, account servicer, check casher, collection agency or tax preparation firm. Declare provides_financial_services where that holds; a bank or federally insured credit union answers to its own regulator's standards instead.
• Develop, implement, and maintain a comprehensive information security program, written in one or more readily accessible parts, with administrative, technical, and physical safeguards appropriate to your size and complexity, the nature and scope of your activities, and the sensitivity of the customer information at issue.
• Designate a Qualified Individual responsible for overseeing, implementing and enforcing the program, and base the program on a written risk assessment that identifies reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of customer information, reassessed periodically.
• Implement access controls, identify and manage the data, personnel, devices, systems and facilities that matter to your business, encrypt customer information in transit over external networks and at rest unless your Qualified Individual approves effective alternative compensating controls, adopt secure development practices, and implement multi-factor authentication for any individual accessing any information system unless your Qualified Individual approves in writing a reasonably equivalent or more secure control.
• Monitor and log the activity of authorized users, and regularly test the effectiveness of the safeguards' key controls, systems, and procedures: absent effective continuous monitoring, conduct annual penetration testing and vulnerability assessments at least every six months and whenever material changes occur.
• Provide security awareness training, use qualified information security personnel, oversee service providers by selecting capable ones, requiring safeguards by contract and periodically assessing them, and evaluate and adjust the program in light of testing, material changes and risk assessments.
• Establish a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in your control, and have your Qualified Individual report in writing at least annually to your board of directors or equivalent governing body.
• If you maintain customer information concerning fewer than five thousand consumers, the written risk assessment requirement of section 314.4(b)(1), the testing requirement of section 314.4(d)(2), the written incident response plan of section 314.4(h) and the board reporting of section 314.4(i) do not apply to you.

These lines are LexLint's reading of the law's text, as of 27 October 2026.

When LexLint raises it

When your app profile says your app provides financial services.

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