Directors’ College 2007 Protecting Your Customers’ Privacy A Directors’ Guide to GLBA By David Abbott, FDIC IT Examiner

The Regulations Gramm-Leach-Bliley Act -Section 501(b) FINANCIAL INSTITUTIONS’ SAFEGUARDS. In furtherance of the policy in subsection (a), each agency or authority described in section 505(a) shall establish appropriate standards for the financial institutions subject to their jurisdiction relating to administrative, technical, and physical safeguards (1) to insure the security and confidentiality of customer records and information; (2) to protect against any anticipated threats or hazards to the security or integrity of such records; and (3) to protect against unauthorized access to or use of such records or information which could result in substantial harm or inconvenience to any customer.

The Response Interagency Guidelines Establishing Standards for Safeguarding Customer Information –FDIC - 12 CFR Parts 308 and 364 –OCC - 12 CFR Part 30 –FRB - 12 CFR Parts 208, 211, 225, and 263 –OTS - 12 CFR Parts 568 and 570

Appendix B to Part 364—Interagency Guidelines Establishing Information Security Standards Table of Contents I. Introduction A. Scope B. Preservation of Existing Authority C. Definitions II. Standards for Safeguarding Customer Information A. Information Security Program B. Objectives III. Development and Implementation of Customer Information Security Program A. Involve the Board of Directors B. Assess Risk C. Manage and Control Risk D. Oversee Service Provider Arrangements E. Adjust the Program F. Report to the Board G. Implement the Standards

Breaches, Breaches and more Breaches* * Source -

Public Bank Breaches* Bank of America Wachovia PNC Westborough Bank, MA Citi Financial J.P. Morgan Chase & Co. North Fork Bank, NY Firstrust Bank La Salle Bank People's Bank Vystar Credit Union, FL Nat'l Institutes of Health Federal Credit Union U.S. Bank Sovereign Bank FirstBank West Shore Bank, MI Premier Bank, MO Chase Bank * Source -

Common GLBA Examination Findings Findings Partial inventories Incomplete risk assessments Weak Board reporting Limited ongoing training Lack of monitoring of suspicious activity for all customer information systems Incomplete incident response plans Weak oversight on service providers / vendors Limited validation

Inventory Identifying the data –Where is the data? Network, Servicer, Back-up, Physical –Who can access the data? Employees, Vendors, Consultants, Programmers –How can the data be accessed? Intranet, Internet, Database, Application

Risk Assessment How is the data threatened? –Internal and External; New and Old Threats How is the data protected? –Encryption, Access Control, Security Configurations How is the data monitored? –When, How Often, Independently How is the data disposed of? –Shredded, Electronically Destroyed --- –FACTA (FIL )

Risk Assessment Conclusions Are you mitigating all threats? Would breaches be caught? Are changes detectable? Are you doing enough?

Board Reporting Report to the Board. Each bank shall report to its board or an appropriate committee of the board at least annually. This report should describe the overall status of the information security program and the bank's compliance with these Guidelines. The report, which will vary depending upon the complexity of each bank's program should discuss material matters related to its program, addressing issues such as: risk assessment; risk management and control decisions; service provider arrangements; results of testing; security breaches or violations, and management's responses; and recommendations for changes in the information security program.

Training Determine the frequency –Most companies perform annually –All new employees “One Size Doesn’t Fit All” Combine with other training

Monitoring Need to determine what needs monitoring Alert triggers should be established Should be done by independent person Should be automated

Incident Reponses Need a definitive program Should address responses for any/all anticipated incidents Should consider walk-throughs and/or preparatory activities FIL

Service Providers and Vendors It is your responsibility to ensure that your Service Providers and Vendors adhere to GLBA All GLBA procedures should be conducted for all Service Providers and Vendors that have access or can gain access to Non-Public Customer Data Just having a Contract Clause is NOT enough FIL

Validation Vital part Needs to be done independently of the controls Frequency and Scope should be determined by your Risk Assessment

References Appendix B to Part 364—Interagency Guidelines Establishing Information Security Standards – FFIEC GLBA Online Resources – Privacy Rights Clearinghouse – FFIEC Handbooks –

Appendix B to Part 364—Interagency Guidelines Establishing Information Security Standards

FFIEC GLBA Online Training

Privacy Rights Clearinghouse

FFIEC Handbooks

lRobert Sargent - FDIC IT Specialist 15 Braintree Hill Office Park Braintree, Massachusetts (781) lThomas J. Donahue - OTS IT Exam Manager 10 Exchange Place - 18th Floor Jersey City, New Jersey (201) lPaul Nadeau – BOS FED Supervisory Examiner Federal Reserve Bank of Boston 600 Atlantic Avenue - PO Box 2076 Boston, Massachusetts (617) lPeter Carter - OCC Lead Technology Expert Office of the Comptroller of the Currency 112 Madison Avenue - Suite 400 New York, NY (212) Contacts