Cybersecurity compliance for regulated firms in Louisiana

Three parts

What a complete answer covers in Louisiana

In Louisiana, 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 Louisiana. 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 Louisiana mortgage licensing is overseen by the Louisiana Office of Financial Institutions. Companies that make, broker or service Louisiana residential mortgage loans must hold the corresponding license, including a dedicated mortgage servicer license, from the Office of Financial Institutions through NMLS under the Louisiana Secure and Fair Enforcement of Mortgage Licensing Act of 2009 (La. R.S. 6:1081 et seq.; the licensing requirement is R.S. 6:1086). Federally insured banks, savings institutions and credit unions are exempt (R.S. 6:1087). Other licenses are overseen by other regulators and carry conditions of their own.
• What Louisiana law says about protecting data. Louisiana's Database Security Breach Notification Law requires any business holding residents' personal information to implement and maintain reasonable security procedures and practices appropriate to the nature of the information, and to take all reasonable steps to destroy records containing personal information that are no longer retained (La. R.S. 51:3074(A)-(B)).
• 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 Louisiana: Louisiana adds a second deadline to breach response. Within 10 days of notifying residents, a business must send the Attorney General's Consumer Protection Section a written report on the breach that lists the names of all affected Louisiana citizens (La. Admin. Code 16:III.701). The Attorney General has stated that untimely notice can result in fines of up to $5,000 per violation.

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.