|Financial Services Modernization Act but most frequently called the Gramm-Leach-Bliley Act or GLBA|
|CITATION||15 U.S.C. §§ 6801-6809|
Title V of the Gramm-Leach-Bliley Act provides for the privacy and security of consumers’ financial information. Under these provisions, financial institutions have restrictions on when they may disclose a consumer’s personal financial information to nonaffiliated third parties. Financial institutions are required to provide notices to their customers about their information-collection and information-sharing practices. Consumers may decide to “opt out” if they do not want their information shared with nonaffiliated third parties. GLBA provides for specific exceptions under which a financial institution may share customer information with a third party and the consumer may not opt out. All financial institutions are required to provide consumers with a notice and opt-out opportunity before they may disclose information to nonaffiliated third parties outside of what is permitted under the exceptions.
GLBA gives authority to eight federal agencies and the states to administer and enforce two regulations apply to financial institutions and other entities that are governed by GLBA. The two regulations are: Financial Privacy Rule and the Safeguards Rule.
|DATA COVERED||Nonpublic personal financial information which includes personally identifiable financial information and any list, description or other grouping of consumers that is derived from using any personally identifiable financial information that is not publicly available.|
|INDUSTRY||Financial institutions, banks, securities firms, insurance companies, companies providing many other types of financial products and services to consumers, such as lending, brokering or servicing any type of consumer loan, transferring or safeguarding money, preparing individual tax returns, providing financial advice or credit counseling, providing residential real estate settlement services, collecting consumer debts and an array of other activities.|
|PENALTIES||Enforced by Federal Trade Commission and an array of financial agencies. Depending on the agency involved, penalties can include: injunctions cease and desist orders, consent decrees and fines ranging from eleven thousand dollars ($11,000) per day to one million dollars ($1 million). Individuals may have a cause of action for violation under State Unfair Trade Practices Acts. This could involve class actions, treble damages and recovery of attorneys’ fees and costs.|