From Windows Server 2012/2012 R2 Domain Controller Security Technical Implementation Guide
Part of Reversible Password Encryption
Associated with: CCI-000196
Storing passwords using reversible encryption is essentially the same as storing clear-text versions of the passwords. For this reason, this policy must never be enabled.
Verify the effective setting in Local Group Policy Editor. Run "gpedit.msc". Navigate to Local Computer Policy -> Computer Configuration -> Windows Settings -> Security Settings -> Account Policies -> Password Policy. If the value for "Store password using reversible encryption" is not set to "Disabled", this is a finding.
Configure the policy value for Computer Configuration -> Windows Settings -> Security Settings -> Account Policies -> Password Policy -> "Store password using reversible encryption" to "Disabled".
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