With the Federal Trade Commission granting dealerships a six-month reprieve to comply with the updated Safeguards Rule, the larger dealership groups who were scrambling to meet the original Dec. 9 deadline have their smaller brethren to thank for the extension.
The FTC established June 9, 2023 as the new date to comply with the latest Safeguards Rule. Part of the commission's reasoning is that some financial institutions — including smaller dealerships — might need more time. In a news release announcing its decision, the FTC cited a shortage of qualified personnel to implement information security programs and reports of possible delays in obtaining equipment needed to upgrade security systems because of supply chain issues.
"These difficulties were exacerbated by the COVID-19 pandemic," the FTC wrote. "These issues may make it difficult for financial institutions, especially small ones, to come into compliance by the deadline."
The FTC also mentioned a letter from the U.S. Small Business Administration's Office of Advocacy as a factor in its decision.
The agency first issued its Safeguards Rule in 2003 for financial institutions to protect consumer data. In fall 2021, the FTC amended it to specifically include auto dealerships with more than 5,000 customer records — the vast majority of auto dealerships.