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In Short
The Situation: As we advised in our recent
Commentary, federal banking
regulators have proposed rules requiring a banking organization to
provide its primary federal regulator with prompt notification of
any computer-security incident that materially
disrupts, degrades, or impairs certain important business
operations. This proposal adds another reporting requirement for
banking organizations. But it might also impact fintechs.
The Result: Under the Bank Service Company Act
( BSCA ), a banking organization is required to disclose
to their regulators all of its core service companies, but there is
no requirement under the BSCA to inform the service company of the
designation.