The GLBA, the FCRA, the NCUA, and the State: Understanding the Laws Protecting your Members’ Information NASCUS 2016 Cybersecurity Symposium

Reed & Jolly, PLLC Your Presenter David A. Reed Attorney at Law Reed & Jolly, LLC (703)

Ripped from the Headlines $80 million FICU victim of Crypto wall – ($500 us bitcoin to get data systems released) – Other small FICUs (refused ransom, wiped the box and restored data successfully) $60 million FICU victim of Acct takeover – Corp CU recognized unusual transaction and halted auto wire pending human confirmation. Medium institution(s) ID theft, tax return fraud with false identities. Data exfiltration (sold on black market) Website defacement Ransomware took down portion of network where backup failed. ($$$$ to mitigate) Reed & Jolly, PLLC

Bottom Line Every product and service we offer is covered by a series of laws, rules and regulations. But one set of requirements surrounds everything: Privacy. We continually need to monitor and inventory our data access and usage. From tellers to marketing and lending to collections and even third parties, who has access to what and how do they protect it? Reed & Jolly, PLLC

What’s the Big Deal with Privacy? Members get sensitive about their “GOODIES” Have you done a data/privacy inventory? –Who has access? –Who can share information? –What does our data sharing really look like in the credit union? Reed & Jolly, PLLC

NPI: A Refresher Nonpublic personal information generally is any information that is not publicly available and that: –Consumer provides to a credit union to obtain a financial product or service from the credit union; –Results from a transaction between the consumer and the credit union involving a financial product or service; or –Credit union otherwise obtains about a consumer in connection with providing a financial product or service. Reed & Jolly, PLLC

Do You Remember When this Was the Biggest Threat to Data Security? Reed & Jolly, PLLC

So Many Laws All of them focus on keeping your member’s goodies safe! Gramm-Leach-Bliley (Reg P) Fair Credit Reporting Act –FACT Act NCUA Rules and Regulations –716, 717 and 748 State Laws Reed & Jolly, PLLC

Gramm-Leach-Bliley Act Implemented by NCUA Regulation Part 716 and Guidelines in Part 748, Appendix A Privacy Notices, Policies and Procedures Opt Out Affiliated and Non Affiliated Third Parties –More than Third Party Due Diligence Exceptions Training Reed & Jolly, PLLC

Fair Credit Reporting Act Implemented by NCUA for FCUs by Regulation Part 717 Affiliate Marketing –Opt Out Opportunity Duties of Data Furnishers –Reasonable Policies and Direct Disputes Duties of Report Users –Disposal and Address Discrepancies Identity Theft Red Flags Reed & Jolly, PLLC

Board and SC Duties Federal (or State) Credit Union Act NCUA Regulations –Board Duties and Authority §701.4 –SC Duties §715 Bylaws –Board- Articles VI and VII –SC- Article IX Policies and Procedures Best Practices Examination Guidance Reed & Jolly, PLLC

The Moving Parts of Security Part 748 Security Program Part Filing of Reports –Compliance Report –Catastrophic Act –Suspicious Activity Report Part BSA Compliance –Establish a compliance program –CIP Appendix A Safeguarding Member Information Appendix B Response Program – Unauth. Access Reed & Jolly, PLLC

The Certification “The chairperson of the Credit Union’s Board of Directors is required to certify compliance with Part 748 each year. The statement of compliance is provided at the bottom of the Credit Union Profile Form that is submitted annually to the regional director following the credit union’s election of officials.” Source: NCUA CU Profile Form 6/14 Reed & Jolly, PLLC

I hereby certify to the best of my knowledge and belief that this credit union has developed and administers a security program that equals or exceeds the standards prescribed by Part 748.0of the NCUA Rules and Regulations; that such security program has been reduced to writing, approved by this credit union's Board of Directors; and this credit union has provided for the installation, maintenance, and operation of security devices, if appropriate, in each of its offices. Further, I certify that I am the president or managing official of the credit union or that the president or managing official has authorized me to make this submission on his/her behalf. ______________________________________________ VOLUNTEER’S NAME HERE Reed & Jolly, PLLC

NCUA Guidance January 15, 2015, NCUA Letter No.: 15-CU-01, provided guidance to CU Boards of Directors and Chief Executive Officers on the NCUA examinations in 2015 The first item in the guidance letter: Cybersecurity “In 2015, NCUA will redouble efforts to ensure that the credit union system is prepared for a range of cybersecurity threats.” Reed & Jolly, PLLC

NCUA Guidance Guidance letter identified 6 “proactive measures credit unions can take to protect their data and their members: –encrypting sensitive data; –developing a comprehensive information security policy; –performing due diligence over third parties that handle credit union data; –monitoring cybersecurity risk exposure; –monitoring transactions; and, –testing security measures.” Reed & Jolly, PLLC

NCUA Supervisory Priorities 2016 LCU 16-CU-01 Here’s their top emerging risks for the year: –Cybersecurity Assessment –Response Programs for Unauthorized Access to Member Information –Bank Secrecy Act Compliance –Interest Rate Risks –TILA – RESPA Integrated Disclosures –CUSO Reporting Reed & Jolly, PLLC

AIRES Questionnaires Automated Integrated Regulatory Examination Software They are the audit questions the examiner will use during the examination for each operational area Good resource for planning and preparation px Reed & Jolly, PLLC

NCUA AIRES Questionnaires Reed & Jolly, PLLC

NCUA Privacy Questionnaire Reed & Jolly, PLLC

NCUA AIRES IT Questionnaires Reed & Jolly, PLLC

But Wait! There’s More! What’s in your state Code? –What is your code? At last count 47, states have some form of data breach notification laws and most of those have very sharp teeth! –Alabama, New Mexico, and South Dakota –See attachment You need to know coverage, definitions of NPI and breach, notice requirements and exemptions. Reed & Jolly, PLLC

Questions? Reed & Jolly, PLLC