GRAAM-LEACH-BLILEY ACT (GLB)

GLB was designed to remove the barriers among financial service providers, including banks, insurance companies and securities firms, enacted during the Great Depression of the 1930s. GLB officially sanctioned the convergence of these industries with the purpose of providing modern, competitive financial products to consumers.
 
 

GRAMM-LEACH-BLILEY FINANCIAL SERVICES MODERNIZATION ACT OF 1999 

The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 (GLB) contains new consumer privacy protections. Title V, Part A of GLB imposes on "each financial institution an affirmative and continuing obligation to respect the privacy of its customers and to protect the security and confidentiality of those customers’ nonpublic personal information." The financial institutions that are covered by this directive include "any institution the business of which is engaging in financial activities as described in section 4(k) of the Bank Holding Company Act of 1956." Section 4(k) of the Bank Holding Company Act of 1956 brings within its scope the products and services of banks, insurance companies, securities firms, and other related industries. Consumers and customers of financial institutions are protected by the GLB. Nonpublic personal information of the consumers and customers of financial institutions are protected by it. Banks, insurance companies, securities firms, the affiliates and holding companies of such companies, and others engaged in financial activities are covered by the GLB privacy mandates.
• Read more about GLB. 

FEDERAL TRADE COMMISSIONS RULING 

The Federal Trade Commission issued a final Rule implementing the provisions of the Gramm-Leach-Bliley Act governing the privacy of consumers' financial information. The Rule imposes on financial institutions three main requirements established by the Act. First, a financial institution must provide to its customers a notice about its privacy policies and practices. That notice must be clear, conspicuous and accurate and must describe the conditions under which a financial institution may disclose nonpublic personal information to nonaffiliated third parties and affiliates. Second, a financial institution must provide its customers with annual notices of its privacy policies and practices. Like the initial notice, the annual notice must be clear, conspicuous and accurate. Third, a financial institution must provide consumers with a reasonable opportunity to "opt out" of disclosures of their nonpublic personal information to nonaffiliated third parties and a reasonable means by which to opt out. Consumers may exercise their right to opt out at any time.
 
 

AMERICAN BANKERS ASSOCIATION 

The American Bankers Association developed a Task Force on the responsible use and protection of consumer information. The mission of the Task Force is to develop voluntary guidelines and a framework for banks to evaluate their practices for responsible use and safeguarding of customer information. The guidelines and framework to be designed to preserve the trust that customers have in banks through the protection and appropriate use of their non-public, personal information, and at the same time allow banks to continue providing customers with affordable, innovative products and services and unprecedented access to credit in a manner that maximizes customer benefits.
 
 
• Read more about the Task Force’s guidelines.