Gramm-Leach-Bliley Financial Modernization Act (GLBA)

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.