Is Your Small Business Compliant with GLBA?
There’s a good chance you’ve never heard of the Gramm-Leach-Bliley Act (GLBA). But if your business handles sensitive financial data—and we’re talking about car dealerships, accountants, mortgage brokers, and insurance agents—you need to get familiar with it. We’ve found that a lot of small businesses have no clue about this law, so let’s break it down in a way that won’t make your head spin.
What is the GLBA Anyway?
The Gramm-Leach-Bliley Act (GLBA) has been around since 1999, but in 2021, it got some serious upgrades which went into effect in June of 2023. The Federal Trade Commission (FTC) broadened the scope of “financial institutions” affected by GLBA, so now it applies to a much wider range of businesses. Here’s a fun fact: if you’re offering any kind of financial service or advice—whether you’re a car dealer arranging financing or a tax preparer handling sensitive data—you probably fall under GLBA.
Who’s Affected?
If you’re in one of these industries, this means you:
- Car Dealerships (because of financing and loan activities)
- Mortgage Brokers
- Loan Officers
- Financial Planners
- Accountants
- Tax Preparers
- Insurance Providers
- Debt Collectors
With these new revisions, businesses now have to go beyond locking up filing cabinets. We’re talking encryption, multi-factor authentication (MFA), and hiring someone specifically to oversee your data security.
IT Requirements for GLBA Compliance: What You Need to Know
As your friendly neighborhood IT service provider, we can’t stress enough how much tech plays a role in GLBA compliance. Here are the key practices your small business should be using to stay on the right side of this law:
- Data Encryption
Sensitive customer data? It needs to be encrypted. Whether in rest (in storage) or in transit (moving across a network). - Access Control
Not everyone in your company needs to see every piece of customer data. Set up role-based access controls (RBAC) so only those who need the info can access it. And don’t forget to audit those permissions regularly! - Security Audits
Regular security audits and risk assessments—spotting any vulnerabilities before they turn into full-blown problems. - Monitoring and Incident Response
If you’re not monitoring your systems continuously, you’re leaving the door wide open. Implement tools like Endpoint Detection and Response (EDR) or Managed Detection and Response (MDR) to stay on top of potential breaches. - Multi-Factor Authentication (MFA)
MFA is your security buddy. Even if someone gets hold of a password, MFA requires another layer of verification—making unauthorized access a whole lot harder. - Employee Training
Your employees can be your weakest link or your strongest defense. Regular training on how to spot phishing attacks, handle data securely, and avoid falling for social engineering scams is a must. - Data Retention and Disposal
Don’t just throw old hard drives or files in the trash. Implement secure data disposal policies to make sure customer info doesn’t land in the wrong hands.
What Happens If You Ignore GLBA?
Here’s what you’re risking if you don’t comply:
- Financial Penalties: The FTC can hit your business with fines up to $100,000 per violation. And if you’re thinking of dodging personal responsibility—nope. Individuals can be fined up to $10,000 each.
- Reputation: A data breach is the fastest way to lose customer trust. In today’s world, a damaged reputation can hit harder than fines.
- Lawsuits: Customers affected by a data breach can take legal action.
- Business Loss: Financial institutions want to work with businesses that are compliant. If you’re not, you could lose partnerships or customers.
Bottom Line: Stay Ahead of the Game
GLBA compliance might sound like a headache, but the reality is that it’s crucial for protecting your business and your customers. The good news? You don’t have to go it alone. At AJD Tech, we’re here to help you implement the security measures needed to keep your small business compliant with GLBA.