Industry News

Regulatory fire may torch lending business

Dealing with security breaches hits business hard
Published on Oct 12, 2006

Fear of fraud is fueling a rush of new state laws intended to protect consumers. But in its path, this blazing regulatory fire may torch many financial services providers unable to keep up with all the new requirements. "There's 35 different states looking at privacy laws and depending on what information sending out, in some states that may trigger a violation of privacy laws," worries Alfred Connizzo, chief operations officer, LandAmerica Credit Services, Norcross, Ga. One leading area of lawmaking involves security breach notification, which centers on making lenders responsible for notifying customers when a breach (loss, compromise, theft, etc.) occurs. "It's important to have a policy in place what you're going to do if there is a breach," Connizzo counsels. That responsibility, however, is becoming more difficult as individual states develop their own definitions of "public" versus "private" information. "There are 35 different laws pending to define what that is," accordin...

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