Cybersecurity compliance for regulated firms in Montana

Three parts

What a complete answer covers in Montana

In Montana, 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 Montana. 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 Montana mortgage licensing is overseen by the Montana Division of Banking and Financial Institutions (Department of Administration). Montana licenses mortgage servicers by name. Under the Montana Mortgage Act, no one may regularly engage in the business of a mortgage servicer for residential mortgage loans without being licensed or registered through NMLS (Mont. Code Ann. §32-9-102). The Division of Banking and Financial Institutions administers the Act, and exemptions are listed at §32-9-104. Nonbank servicers are also subject to dedicated financial-condition (capital and liquidity) requirements under §32-9-206. Other licenses are overseen by other regulators and carry conditions of their own.
• What Montana law says about protecting data. Montana requires businesses to take all reasonable steps to destroy customer records containing personal information that no longer need to be retained, by shredding, erasing or otherwise making the data unreadable or undecipherable (Mont. Code Ann. §30-14-1703).
• 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 Montana: Every Montana breach notification must be copied electronically, at the same time, to the Attorney General's consumer protection office. There is no minimum number of affected residents, so a breach affecting a single Montana resident still requires a state filing.

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.