It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
Primary source: FTC Safeguards Rule business guidance
Does the under-5,000-consumer exemption apply to a mortgage lender?
Details
A small lender may still cross 5,000 consumers quickly through leads, denied files, originated loans, and servicing records. Under 16 CFR 314.6, the threshold analysis changes only the listed subparts, not coverage. The firm should document the count method, because old files, leads, former customers, and retained records can matter.
Primary source: FTC Safeguards Rule business guidance.
FAQ
Does the under-5,000-consumer exemption apply to a mortgage lender?
It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
What is the data-flow issue for a mortgage lender?
Borrower files include credit, income, tax transcript, bank, employment, appraisal, title, underwriting, and closing data. Information usually crosses a loan-origination system, warehouse or investor portal, settlement vendors, and servicing handoff records.
Is this legal advice?
No. It is source-cited educational content for a template product, not legal advice.