[Federal Register Volume 69, Number 225 (Tuesday, November 23, 2004)]
[Notices]
[Pages 68151-68152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-25936]


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FEDERAL TRADE COMMISSION

[File No. 042 3153]


Sunbelt Lending Services, Inc.; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before December 15, 2004.

ADDRESSES: Comments should refer to ``Sunbelt Lending Services, Inc., 
File No. 042 3153,'' to facilitate the organization of comments. A 
comment filed in paper form should include this reference both in the 
text and on the envelope, and should be mailed or delivered to the 
following address: Federal Trade Commission/Office of the Secretary, 
Room H-159, 600 Pennsylvania Avenue, NW., Washington, DC 20580. 
Comments containing confidential material must be filed in paper form, 
as explained in the Supplementary Information section. The FTC is 
requesting that any comment filed in paper form be sent by courier or 
overnight service, if possible, because U.S. postal mail in the 
Washington area and at the Commission is subject to delay due to 
heightened security precautions. Comments filed in electronic form 
(except comments containing any confidential material) should be sent 
to the following email box: [email protected].

FOR FURTHER INFORMATION CONTACT: Jessica Rich, FTC, Bureau of Consumer 
Protection, 600 Pennsylvania Avenue, NW., Washington, DC 20580, (202) 
326-3224.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Section 2.34 
of the Commission's Rules of Practice, 16 CFR 2.34, notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of thirty (30) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for November 16, 2004), on the World Wide Web, at http://www.ftc.gov/os/2004/11/index.htm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. Written comments must be submitted 
on or before December 15, 2004. Comments should refer to ``Sunbelt 
Lending Services, Inc., File No. 042 3153,'' to facilitate the 
organization of comments. A comment filed in paper form should include 
this reference both in the text and on the envelope, and should be 
mailed or delivered to the following address: Federal Trade Commission/
Office of the Secretary, Room H-159, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. If the comment contains any material for which 
confidential treatment is requested, it must be filed in paper (rather 
than electronic) form, and the first page of the document must be 
clearly labeled ``Confidential.'' \1\ The FTC is requesting that any 
comment filed in paper form be sent by courier or overnight service, if 
possible, because U.S. postal mail in the Washington area and at the 
Commission is subject to delay due to heightened security precautions. 
Comments filed in electronic form should be sent to the following email 
box: [email protected].
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments, whether filed 
in paper or electronic form, will be considered by the Commission, and 
will be available to the public on the FTC Web site, to the extent 
practicable, at http://www.ftc.gov. As a matter of discretion, the FTC 
makes every effort to remove home contact information for individuals 
from the public comments it receives before placing those comments on 
the FTC Web site. More information, including routine uses permitted by 
the Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted a 
consent agreement, subject to final approval, from Sunbelt Lending 
Services, Inc. (``Sunbelt''). Sunbelt is a mortgage broker with 
headquarters in Clearwater, Florida. Sunbelt collects sensitive 
customer information, including customer names, social security 
numbers, credit histories, bank account numbers, and income tax 
returns, and is a ``financial institution'' subject to the Gramm-Leach-
Bliley Act's Standards for Safeguarding Customer Information Rule, 16 
CFR part 314 (``Safeguards Rule'') and Privacy of Consumer Financial 
Information Rule, 16 CFR part 313 (``Privacy Rule'').
    The proposed consent agreement has been placed on the public record 
for thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement and take appropriate action or make final 
the agreement's proposed order.
    This matter concerns Sunbelt's alleged violations of the Safeguards 
and Privacy Rules. The Safeguards Rule, which became effective on May 
23, 2003, requires financial institutions to implement reasonable 
policies and procedures to ensure the security and confidentiality of 
customer information, including:

[[Page 68152]]

     Designating one or more employees to coordinate the 
information security program;
     Identifying reasonably foreseeable internal and external 
risks to the security, confidentiality, and integrity of customer 
information, and assessing the sufficiency of any safeguards in place 
to control those risks;
     Designing and implementing information safeguards to 
control the risks identified through risk assessment, and regularly 
testing or otherwise monitoring the effectiveness of the safeguards' 
key controls, systems, and procedures;
     Overseeing service providers, and requiring them by 
contract to protect the security and confidentiality of customer 
information; and
     Evaluating and adjusting the information security program 
in light of the results of testing and monitoring, changes to the 
business operation, and other relevant circumstances.
    The Privacy Rule, which became effective on July 1, 2001, requires 
financial institutions to provide customers with clear and conspicuous 
notices that explain the financial institution's information collection 
and sharing practices and allow customers to opt out of having their 
information shared with certain non-affiliated third parties.
    The Commission's proposed complaint charges that Sunbelt failed to 
implement the protections required by the Safeguards Rule and, 
specifically, that it failed to: (1) Identify reasonably foreseeable 
internal and external risks to the security, confidentiality, and 
integrity of customer information; (2) implement information safeguards 
to control the risks to customer information and regularly test and 
monitor them; (3) develop, implement, and maintain a comprehensive 
written information security program; (4) oversee service providers and 
require them by contract to implement safeguards to protect 
respondent's customer information; and (5) designate one or more 
employees to coordinate the information security program. The proposed 
complaint also alleges that Sunbelt failed to provide its online 
customers with the notice required by the Privacy Rule.
    The proposed order contains provisions designed to prevent Sunbelt 
from future practices similar to those alleged in the complaint. 
Specifically, Part I of the proposed order prohibits Sunbelt from 
violating the Safeguards Rule or the Privacy Rule. Part II of the 
proposed order requires that Sunbelt obtain, within 180 days after 
being served with the final order approved by the Commission, and on a 
biennial basis thereafter for ten (10) years, an assessment and report 
from a qualified, objective, independent third-party professional, 
certifying that: (1) Sunbelt has in place a security program that 
provides protections that meet or exceed the protections required by 
the Safeguards Rule and (2) Sunbelt's security program is operating 
with sufficient effectiveness to provide reasonable assurance that the 
security, confidentiality, and integrity of consumer's personal 
information has been protected. This provision is substantially similar 
to comparable provisions obtained in prior Commission orders under 
Section 5 of the FTC Act. See Tower Records, FTC Docket No. C-4110 
(June 2, 2004); Guess?, Inc., FTC Docket No. C-4091 (July 30, 2003); 
and Microsoft Corp., FTC Docket No. C-4069 (Dec. 20, 2002).
    Part II of the proposed order requires Sunbelt to retain documents 
relating to compliance. For the assessments and supporting documents, 
Sunbelt must retain the documents for three years after the date that 
each assessment is prepared.
    Parts III through VI of the proposed order are reporting and 
compliance provisions. Part III requires dissemination of the order now 
and in the future to persons with supervisory responsibilities. Part IV 
ensures notification to the FTC of changes in corporate status. Part V 
mandates that Sunbelt submit compliance reports to the FTC. Part VI is 
a provision ``sunsetting'' the order after twenty (20) years, with 
certain exceptions.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the proposed order or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-25936 Filed 11-22-04; 8:45 am]
BILLING CODE 6750-01-P