Massachusetts Data Privacy Regulations Get Delayed ... Again

For those of you stressing over the changes to personal information policies and procedures required by the pending Massachusetts data security regulations, you can breathe a sigh of relief... sort of.  The deadline for implementing the new policies has been pushed back - for the third time.  Now the new regulations will take effect on March 1, 2010 (rather than in January), and some of the more controversial aspects of the law have been watered down to make the requirements more palatable to small businesses. If you are a business owner who is not aware of the upcoming changes, you need to take a look.  The far-reaching regulations are a response by lawmakers to the highly-publicized security breaches at TJX, The Boston Globe, and others where thousands of social security numbers, credit card numbers, and other personal information were carelessly unsecured.  As described by Mass High Tech:

The Massachusetts regulations, first promulgated last fall based on a legislative directive, will go further than any other state by requiring any company that handles state residents’ sensitive data to take measures to protect it. Measures include encryption and extend to ensuring that all third-party IT service providers adequately protect sensitive data — a clause that drew criticism from business owners as an onerous requirement.

Specifically, the revisions to the data security regulations moderate the specific requirements to make them more consistent with the federal privacy requirements under the Gramm-Leach-Bliley Act.  The new Massachusetts privacy regulations apply to any business - yes, even outside of Massachusetts - engaged in commerce that collects and retains personal information of Massachusetts residents in connection with the provision of goods and services.  While these regulations will apply to all businesses regardless of size, the new revisions make clear that the regulations will apply a risk-based approach based on the size and scope of each business. (i.e., smaller businesses storing small amounts of information will be required to take different actions than would a large company with much more information and resources).

So, what does this mean for you?

If you are a business owner who collects the first name or initial and last name of a Massachusetts resident in combination with that resident's (a) Social Security number, (b) drivers license or state issued identification card number, or (c) financial account number or credit or debit card number, you must comply with the new regulations by March, 2010.  That includes, at a minimum:

  1. creating a comprehensive information security program for safeguarding against "reasonably foreseeable internal and external risks to the security, confidentiality, and/or integrity" of the personal information, including employee training and education;
  2. encrypting all data and files containing the personal information to the extent "technically feasible" and maintaining "reasonably up-to-date" firewall protection and operating system security patches; and
  3. taking "reasonable steps" to select and retain third-party service providers that are capable of maintaining appropriate security measures consistent with these regulations and any applicable federal regulations.

The steps that were originally included as required actions are now offered as guidance to comply with the regulations, but whether a company is ultimately in compliance will be determined on a case-by-case basis.  In any event, all businesses should take a look at their data security procedures to make sure they are up to date.

Are you concerned about how the new regulations will affect you?  What do you see as the biggest challenges to comply?

Top Signs the Economy is Rebounding?

Reading the headlines this morning gives signs of hope that the economy is on the rebound.  Here are some examples:

  1. Stocks Recapture 9000 on Profit Surprise (WSJ).   S&P 500 Erases Half Its Loss Since Lehman's Failure on Outlook for Profits (Bloomberg).  The stocks markets are in the midst of a rally that is showing signs that the bottom may be behind us.  However, the threats of a coming commercial real estate bust loom.  Can the upturn in the business sector overpower the coming losses?
  2. Housing Starts Increase to Seven-Month High (Bloomberg).  U.S. Mortgage Rates Up, But Housing Optimism Surfaces (CNBC).  Economists React:  Housing No Longer 'Weakest Link'? (WSJ)  The mortgage crisis (among other things) got us into this mess.  Foreclosures are still high and prices are still declining, but three months of increases in housing starts is giving some optimism that we are starting to see a rebound.
  3. Samsung, Hynix Rally as Intel Results Boost Hopes (CNBC).  With the semiconductor chip and flat panel business returning to the black, discretionary spending could be returning to people's budgets.  Positive results from the two top chip makers are a hopeful sign that the industry is bouncing back, but it hit the bottom so hard that it has no where else to go at this point.
  4. Ford Reports Surprise Second Quarter Profit (MSNBC).  Ford Expects Profitability in 2011 Without Government Loans (BusinessWeek).  The automakers defined the American economy for a generation.  With its recent struggles the automakers are just hoping to survive.  Now with Ford showing promise and a svelter GM out of bankruptcy, could the American auto industry actually recover?

All of this is of course balanced with a heavy dose of continuing negativity.  And we will know more on July 31st when the Bureau of Economic Analysis releases its first estimate of second-quarter GDP, which is expected to provide some good news:

The report is expected to offer evidence that the worst recession since the 1930s is very nearly over, and that a return to growth in the current quarter is very likely.

A report that GDP increased in the second quarter could provide a good stimulus for the rally to continue.  Perhaps we can look forward to good days ahead.

Welcome!

As an attorney who has practiced at large firms since law school, I recently ventured out to build my own practice.  There are a number of reasons why I chose to do it which can mostly be summed up with a responsive question:  "Why not?". I wanted to do something different.  My focus is on providing superior client service and legal advice to businesses with practical business judgment in mind.  Clients don't want to listen to pontification on abstract legal theory.  They want results.  Now.  This firm will cut out the hierarchy and inflated bills and put the focus on moving business ahead with focused legal counsel that keeps up with the pace of business.