US banking regulators promulgate a final rule for 36-hour notice of breach

December 14, 2021

On November 18, 2021, the US federal banking regulators Office of the Comptroller of the Currency, Federal Reserve Board and Federal Deposit Insurance Corporation jointly announced a final rule that will require banking organizations (which includes the U.S. operations of foreign banking organizations) to notify their regulators as soon as possible but no later than 36 hours of identifying a significant “computer-security incident” that results in “actual harm” and rises to the level of a “notification incident” as defined in the final rule. The proposed rule would also impose a separate notification requirement on companies (such as data processing companies) that provide certain services to those banks. Those service providers would be required to notify “each affected banking organization customer as soon as possible when the bank service provider determines that it has experienced a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four or more hours.”  The final rule reflects several significant changes to the proposal that had been issued for comment in January 2021, including a narrowing of the definition of “computer security incident” from merely “significant” incidents and a notification window of 36 hours instead of “immediate[].”

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