New York Department of Financial Services Announces $1.5 Million Settlement of Second Cybersecurity Enforcement Action

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On March 3, 2021, the New York State Department of Financial Services (NYDFS) announced a settlement with Residential Mortgage Services, Inc. (RMS) for $1.5 million in connection with its violation of the NYDFS Cybersecurity Regulation, 23 NYCRR Part 500 (Part 500). This is the second publicly-announced settlement of an enforcement action brought under NYDFS’s novel cybersecurity regulation (we wrote about the first action).

According to the consent order, in March 2020, NYDFS’ Mortgage Banking Division commenced a routine examination of RMS, which included a review of its compliance with Part 500. RMS is headquartered in Maine, but it is registered as mortgage banker in New York and other states. During the examination, NYDFS determined that RMS failed to report a March 2019 data breach incident, as required by Part 500.

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Dunkin’ Brands, Inc. Agrees to Pay $650,000 to Settle 2019 Data Breach Lawsuit Brought by the New York Attorney General’s Office

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On September 15, 2020, the New York Attorney General’s Office (NYAG) announced a settlement with Dunkin’ Brands, Inc. (Dunkin) in connection with a September 2019 lawsuit brought by the NYAG against Dunkin for alleged failures to adequately respond to cyberattacks that impacted approximately 300,000 customers. The proposed settlement—which still must be approved by the court—requires Dunkin to, among other things, notify customers impacted by the attacks, maintain specific cybersecurity procedures to prevent future cyberattacks, and pay $650,000 in penalties.

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New Biometrics and Geolocation Legislation Proposed in U.S. Senate, More States Consider Similar Laws

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Technology that determines an individual’s identity or location has been the subject of significant media attention in the first half of 2018: Amazon made news with the sale of its facial recognition technology to law enforcement, the U.S. Supreme Court ruled that the government generally must obtain a warrant to access certain types of geolocation information, California arrested the Golden State Killer using the DNA information of a relative, and Facebook came under fire for the way in which Cambridge Analytica accessed the data of tens of millions of users. Garnering less attention, but of no less importance, are the legislative efforts underway in the federal government and in many states to regulate these emerging technologies and limit the ways in which this information can be collected.

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