Gramm-Leach-Bliley Act (GLBA)
What is the Gramm-Leach-Bliley Act (GLBA)
GLBA is the Gramm-Leach-Bliley Act and it was created specifically for financial institutions in the State of Minnesota; however, GLBA also applies to any company that looks after customer information. This act is in place to protect the financial information of customers, and penalize any business or bank that fails to do so.
Who is subject to GLBA Compliance?
All financial institutions and businesses are obligated to design, implement, and maintain safeguards to protect customer information from reaching unauthorized individuals. The GLB Act dictates that companies provide consumers with privacy notices that outline the institutions’ information-sharing procedures. Similarly, consumers have the right to withhold some – but not all – data for sharing.
What are my Rights Under GLBA?
Consumers and customers are free to say no or opt out of having their private details shared with certain third party sources. The privacy notice must state that this can be done, with reasonable reasons for doing so. For example, supplying a toll-free telephone number or a detachable form with a pre-printed address is a practical method for consumers or customers to opt out. Demanding a signed letter by an individual as a means of opting out, on the other hand, is not a sensible solution. The privacy notice needs to also notify consumers that they have the right to refuse the sharing of certain details, like credit report or application information with the financial institution’s partners.
Who does GLBA Protect?
The GLBA secures the financial information of any consumer, specifically in relation to online banking, e-commerce and the transfer of electronic information. The information security requirements of GLBA outlines that all regulatory agencies and authorities are to design administrative, technical and physical protective methods in an effort to establish effective security, keep information safe from threats, and secure against unauthorized access to confidential data.
Why is GLBA Important?
The success of any financial institution is based on a customers’ willingness to place their personal finances in that institution’s trusted hands. For several years, bank vaults, safety deposit boxes, security systems, and guards provided clear signs of safety and protection to a financial institution’s clients. Unfortunately today, however, these assets can be more challenging to see. Banking and financing largely operate electronically, which means clients’ financial and other private information is being hosted and shared on servers and work stations throughout the world. Guaranteeing the security of this sensitive information was the motivation behind the Gramm-Leach-Bliley Act (GLBA), which became a law on November 12, 1999.
The Gramm–Leach–Bliley Act of 1999 was the Congressional act that abolished sections of the Glass-Steagall Act of 1933. Today, the Glass-Steagall Act is known for preserving a separation between commercial banking and investment banking.