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While 2025 may have brought questions about the level of enforcement we would see from federal regulators, there was no question that state regulators would continue to be active, especially in the financial privacy space. In 2025, we saw the New York Department of Financial Services (NYDFS) implement the final phases of amendments to its NYDFS Cybersecurity Regulation (23 NYCRR Part 500) that originally passed back in 2023 (see our earlier post on the amendments here). The final implementation phases milestones came as scheduled in May and November 2025, and just days before the final set of requirements took effect on November 1, NYDFS also issued new industry guidance on managing third-party risks. Taken together, the guidance and final amendments underscore what NYDFS will be scrutinizing in upcoming investigations and examinations: leadership oversight and documentation, complete asset inventories governed by clear policies, strict access controls and privilege management, universal multi-factor authentication coverage or well‑justified compensating controls, and credible third‑party risk management evidence.Continue Reading On the Tenth Day of Data… Looking Back at 2025 and Ahead to NYDFS Enforcement Priorities in 2026

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In December 2024, New York Governor Kathy Hochul signed into law two bills (A8872A and S2376B; collectively, the “Bills”) that amend New York’s Data Breach Notification Law.1 The Bills introduce a maximum thirty-day timeframe for notifying affected New York residents of a reportable “breach of the security of the system”2 under…

Throughout 2024, financial sector regulators sharpened their focus on data protection and cybersecurity issues impacting financial institutions and the public. Key federal agencies like the Securities and Exchange Commission (“SEC”), the Federal Trade Commission (“FTC”), and the Consumer Financial Protection Bureau (“CFPB”) have been joined by state regulators, such as the New York Department of Financial Services (“NYDFS”), in proposing and finalizing significant rulemaking, pursuing novel enforcement actions, and issuing influential guidance. 2025 promises to be a continuation of this considerable trend.  Continue Reading Dashing Through Cybersecurity Regulations in the Financial Services Sector in 2024

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On October 2, 2024, the New York State Department of Health (“NYSDOH”) finalized and adopted new hospital cybersecurity regulations. Effective immediately, hospitals in New York State are required to report to NYSDOH as promptly as possible, but not later than 72 hours after, determining that a cybersecurity incident has occurred. A cybersecurity incident is an…

On November 13, 2023, New York Governor Kathy Hochul announced the release of proposed statewide hospital cybersecurity regulations that would require state-licensed hospitals to establish cybersecurity programs, policies and procedures (the “Proposed Regulations”). The Proposed Regulations feature requirements regarding cybersecurity policies and procedures, personnel, user authentication methods, security risk assessments, incident response plans, and two-hour…

On November 1, 2023, New York Governor Kathy Hochul announced that the New York Department of Financial Services (“NYDFS”) finalized amendments to its Part 500 Cybersecurity Regulations (“Final Amendments”)—the first significant change to the regulations since their inception in March 2017. The Final Amendments generally track previous NYDFS proposed amendments—including the November 9, 2022 proposal that we covered here—with certain important changes.Continue Reading NYDFS Finalizes Significant Amendments to its Cybersecurity Regulations

On November 9, 2022, the New York Department of Financial Services (“NYDFS”) announced proposed amendments to its Part 500 Cybersecurity Rules (“Proposed Amendments”), revising an initial set of draft amendments released in July 2022. While NYDFS may have relatively limited jurisdiction, its emphasis on rapid breach reporting and data governance have had considerable influence on other U.S. financial services regulators. The current Cybersecurity Rules impose a 72-hour reporting requirement for cybersecurity events, and the Proposed Amendments go farther, creating an additional 24-hour notification obligation in the event a ransomware payment is made. Additionally, the Proposed Amendments create new requirements for larger “Class A” companies, including a risk assessment by an external expert every three years and an independent audit of cybersecurity programs annually.Continue Reading NYDFS Proposes Significant Amendments to its Cybersecurity Rules

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Since the passage of the California Consumer Privacy Act (CCPA) in 2018, many states have proposed sweeping data protection legislation, but only two others, Colorado and Virginia, have so far succeeded in passing such laws. That may soon change. In 2021, several states came close to enacting comprehensive privacy legislation and that momentum has continued into this year, with data protection bills being carried over, introduced, and reintroduced in state legislatures across the country. As the possibility of a federal privacy law dwindles—particularly during this midterm year—state legislatures are poised to be the source of major data protection developments in 2022. Throughout the year, Ropes & Gray will monitor and analyze these developments in state privacy laws, beginning with a discussion of the latest iteration of the proposed New York Privacy Act.
Continue Reading State Privacy Law Developments: The New York Privacy Act

Artificial Intelligence (AI), including machine learning and other AI-based tools, can be effective ways to sort large amounts of data and make uniform decisions. The value of such tools has been embraced by some employers as an efficient way to address current increased hiring needs in the current job market. The use of artificial intelligence () as an aid to employers in making employment decisions—e.g., recruitment, resume screening, or promotions—has been on the radar of lawmakers and regulators in recent years, particularly out of concern for the risk that these tools may mask or entrench existing discriminatory hiring practices or create new ones. For example, some workers have filed charges with the Equal Employment Opportunity Commission (EEOC) based on alleged discrimination that resulted from employers’ use of AI tools, leading the EEOC to establish an internal working group in October 2021 to study the use of AI for employment decisions. Elsewhere, a bill addressing the discriminatory use of AI was proposed in Washington, DC in late 2021, and Illinois enacted one of the first U.S. laws directly regulating the use of AI in employment-related video interviews in 2019. In contrast, a bill proposed in California in 2020 suggested that AI could be used in employment to help prevent bias and discrimination.

On November 10, 2021, the New York City Council passed the latest such bill, which places new restrictions on New York City employers’ use of AI and other automated tools in making decisions on hiring and promotions. The measure—which takes effect on January 2, 2023—regulates the use of “automated employment decision tools” (AEDTs) which it defines as computational processes “derived from machine learning, statistical modeling, data analytics, or artificial intelligence” that issue a “simplified output” to “substantially assist or replace” decision-making on employment decisions (i.e., hiring new candidates or promoting employees). Under the new law, employers and employment agencies are barred from using AEDTs to screen candidates unless certain prerequisites are met. First, the AEDT must be subject to a bias audit within the last year. Second, a summary of the results of the most recent audit, as well as the distribution date of the AEDT, must be made publicly available on the employer’s or employment agency’s website. The law describes this “bias audit” as “an impartial evaluation by an independent auditor” which “shall include, but not be limited to” assessing the AEDT’s “disparate impact on persons” based on race, ethnicity, and sex.Continue Reading NYC Law Aims To Reduce Bias Introduced by AI in Employment Decisions