Cybersecurity compliance for regulated firms in Illinois

Three parts

What a complete answer covers in Illinois

In Illinois, different licenses are overseen by different regulators. Where a rule below applies to one kind of firm, the text says so.

• The federal minimum. The FTC Safeguards Rule (16 CFR 314) treats a wide range of nonbank businesses as financial institutions, including mortgage lenders and servicers, consumer finance companies, tax preparers, collection firms, title and settlement agents, money services businesses, and dealers that arrange financing. A firm within its reach must keep a written security program, appoint a qualified individual to run it, and report to its board each year. Insurance producers and investment advisers fall outside the FTC's jurisdiction and answer to their own regulators, and banks and credit unions answer to their prudential regulators under the interagency information-security guidelines. Which side of that line a firm falls on depends on what it does and who supervises it.
• What a license adds in Illinois. Conditions attach to whatever a firm is licensed or registered to do, and they differ widely from one type of license to another. Mortgage is the area where most of our work lies, and in Illinois mortgage licensing is overseen by the Illinois Department of Financial and Professional Regulation, Division of Banking. Companies servicing Illinois residential mortgage loans need a Residential Mortgage License from the Department of Financial and Professional Regulation's Division of Banking through NMLS. The Residential Mortgage License Act of 1987 (205 ILCS 635/1-3) reaches the business of brokering, funding, originating, servicing or purchasing residential mortgage loans, unless an exemption applies, such as those for banks and credit unions. Other licenses are overseen by other regulators and carry conditions of their own.
• What Illinois law says about protecting data. Illinois PIPA requires any data collector holding Illinois residents' personal information to implement and maintain reasonable security measures, and to bind third parties to the same standard by written contract (815 ILCS 530/45); secure disposal is separately mandated (815 ILCS 530/40).
• Your counterparties' requirements. Investors, warehouse lenders, carriers, underwriters and institutional clients send questionnaires of their own, and their reviews decide whether a relationship continues. Add the laws of each state where your customers live, and that is the list a firm has to answer. Our assessment begins by producing it, matched to your firm and with each source cited.

Also relevant in Illinois: A breach affecting more than 500 Illinois residents must be reported to the Attorney General no later than the time notice goes to the affected residents (815 ILCS 530/10).

General information, not legal advice. Which of these requirements reach your firm depends on its circumstances. The assessment answers that question and names the source of each finding.