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 payday lender or finance company?
Details
A storefront lender may cross 5,000 consumers through repeat borrowers and historical records. Under 16 CFR 314.6, sub-threshold firms still need a security program and safeguards. 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 payday lender or finance company?
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 payday lender or finance company?
Customer information appears in loan applications, bank-account verification, ACH authorization, underwriting files, payment-processing systems, collection workflows, store workstations, and online borrower portals. High-risk data often includes bank routing/account details and income records.
Is this legal advice?
No. It is source-cited educational content for a template product, not legal advice.