TAC 7 Compliance: Why It Matters & How to Know If You Are On Track

If you are in the financial industry and do business in Texas, or are licensed to do business in Texas, then you need to be sure that you are compliant with Texas TAC Title 7 Part 4. Texas Administrative Code 7 Part 4 refers to regulations under the Texas Administrative Code that govern banking, securities, and financial institutions. This regulation ensures financial institutions comply with state and federal protection laws, safeguard sensitive financial data and protect consumers from fraud.

Specific Regulation Requirements are as follows:

• Data Protection & Privacy
  • Financial Institutions must comply with Texas Identity Theft Enforcement and Protection Act and federal laws like Gramm-Leach-Bliley Act, requiring encryption, secure storage and restricting access to financial data.
• Incident Response & Reporting
  • Banks and financial institutions must have an incident response plan in place to report data breaches to the Texas Department of Banking or Securities Board.
  • Texas’s Data Breach Notification Law requires timely disclosure of security incidents affecting customer data.
• Third-Party Risk Management
  • Vendors handling sensitive financial information must comply with security regulations, necessitating third-party risk assessments and contractual obligations for cybersecurity standards.
• Cyber Risk Assessments & Audits
  • Institutions are required to conduct periodic risk assessments to identify vulnerabilities, perform security audits and update cybersecurity frameworks accordingly.
• Access Controls & Authentication
  • Strong Identity and Access Management (IAM) policies are needed to prevent unauthorized access to financial records, including the use of multi-factor authentication (MFA).
• Cyber Threat Monitoring & Prevention
  • Continuous monitoring for phishing, malware, ransomware and insider threats is crucial.
  • Adoption of AI-driven threat detection and Security Information and Event Management (SIEM) tools to enhance security posture.
• Compliance with State & Federal Cyber Regulations
  • Adherence to Texas House Bill 3834, which mandates cybersecurity training for certain employees handing sensitive information.
  • Alignment with National Institute of Standard and Technology (NIST) Cybersecurity Framework and Federal Financial Institutions Examination Council (FFIEC) guidelines.