The Gramm-Leach-Bliley Act and Privacy

The Gramm-Leach-Bliley Act (GLBA) was signed into law by President Clinton on November 12, 1999.  The law breaks down the legal barriers that separated the banking, insurance and securities industries by repealing the Glass-Steagall Act, re-writing federal banking laws, and establishing a framework of functional regulation for the financial services industries.  GLBA permits financial services companies to merge and engage in a variety of new business activities, while attempting to address the regulatory issues raised by such combinations.

GLBA also provides important new privacy protections for consumers.  Title V of GLBA requires financial institutions, including insurance entities, to protect certain consumer information.  GLBA requires functional regulators, including state insurance regulators, to implement regulations enforcing those protections.

In short, here are some of GLBA’s privacy provisions:

	GLBA requires all financial institutions to establish privacy policies outlining their practices with respect to the collection and disclosure of certain consumer information;
	GLBA requires financial institutions to clearly disclose their privacy policies to consumers;
	GLBA requires financial institutions to provide their consumers with an opportunity to "opt-out" from the sharing of certain non-public personal information with nonaffiliated third parties;
	GLBA gives functional regulators some flexibility to prescribe necessary exceptions and clarifications to permit the sharing of information in certain circumstances; and
	GLBA requires financial institutions to establish safeguards to protect the confidentiality, security and integrity of customer information.

For further information on this bill and its other provisions please visit the Library of Congress's  Thomas web site.