FTC Settlement Sinks Brokerage

A small mortgage brokerage shop in Fairfax, Va., is closing its doors because the owner said he couldn't afford the cost of complying with the Federal Trade Commission's requirements for protecting customers' personal and financial information.Nationwide Mortgage Group president John Eubank said it would cost $60,000 to meet the security requirements the FTC expects as part of a settlement. "I just can't afford that," he told MortgageWire. The company has one office and five employees. Last year the FTC alleged that NMG failed to protect consumer information adequately as required by a 1999 privacy law. The FTC did not cite any specific incidents of lost or stolen information. But after consulting with an attorney, the mortgage broker concluded that it was useless to fight the agency. The settlement also requires Mr. Eubank to periodically report on his compliance activities to the FTC over the next 10 years, including where he is working and his responsibilities and duties. "It makes it difficult for me to find a job," he said. The FTC first contacted his 12-year-old firm as part of a random survey. "We have never had any information lost from this company," Mr. Eubank said.