August 9, 2022

Volume XII, Number 221

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August 08, 2022

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Fed Reports on Cybersecurity and Financial System Resilience

Recently, the Federal Reserve Board (Fed) published its annual Cybersecurity and Financial System Resilience report describing measures it has taken to strengthen cybersecurity in the financial services sector, including the supervision and regulation of financial institutions and third-party service providers.

The report highlights an increase in the number of cyber threats. Ransomware, in particular, has been rampant, and the effects of ransomware attacks could be particularly deleterious to smaller banking organizations. Increasing geopolitical events, such as Russia’s invasion of Ukraine, have also lead to the potential for increase in cyberattacks in the U.S., which could affect financial systems. Finally, the Fed acknowledges that a cyberattack of a vendor or third party could impact banks due to supply chain compromise.

Putting It Into Practice: The Report highlights the importance that the Fed has placed on cyber-risk mitigation and cyber resilience initiatives and is a good reminder for financial institutions that as the risks increase, they should prioritize their cyber security protocols and should use the Fed’s guidelines to mitigate risk. This latest report is consistent previous rulemaking from the Fed, OCC, and FDIC to improve information sharing about cyber incidents that may affect the U.S. banking system that, among other things, requires banking organizations to inform their primary federal regulator no later than 36 hours after a determination that a “computer-security incident” has reached the level of a “notification incident” (we discussed this rulemaking in previous blog posts here and here).

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 217
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About this Author

Moorari Shah Bankruptcy Lawyer Sheppard Mullin Law Firm
Partner

Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm's Los Angeles and San Francisco offices. 

Areas of Practice

Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,...

213-617-4171
A.J. S. Dhaliwal Bankruptcy Attorney Sheppard Mullin Washington DC
Associate

A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office. 

A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.

With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving...

202-747-2323
Snehal Desai, attorney, Sheppard Mullin
Attorney

Snehal Desai is an associate in the Intellectual Property Practice Group in the firm's San Francisco office. She is a member of the Privacy and Cybersecurity Team, the Advertising Team and the Technology Transactions Team.

Areas of Practice

Advertising: Snehal advises clients in conducting advertising campaigns, contests and sweepstakes, and brand marketing campaigns. 

Technology and Commercial Transactions: Snehal drafts and negotiates...

415-774-2960
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