Since many regulations have been instituted since the 1930s to protect bank depositors, GLBA was created to allow these financial industry participants to offer more services. GLBA was passed on the heels of commercial bank Citicorp's merger with the insurance firm Travelers Group
The Travelers Companies
The Travelers Companies, Inc., commonly known as Travelers, is an American insurance company. It is the second-largest writer of U.S. commercial property casualty insurance, and the third-largest writer of U.S. personal insurance through independent agents. Travelers is incorporated in …
What is the GLBA?
The GLBA is most well-known as the repeal the Glass-Steagall Act of 1933, which stated that commercial banks were not allowed to offer financial services, like investments and insurance-related services, as part of normal operations. The act is also known as Gramm-Leach-Bliley Financial Services Modernization Act.
What is the purpose of the GLB Act?
A DEFINTION OF GLBA COMPLIANCE. The Gramm-Leach-Bliley Act (GLB Act or GLBA) is also known as the Financial Modernization Act of 1999. It is a United States federal law that requires financial institutions to explain how they share and protect their customers’ private information.
What is the Gramm-Leach-Bliley Act of 1999 (GLBA)?
What Is the Gramm-Leach-Bliley Act of 1999 (GLBA)? The Gramm-Leach-Bliley Act of 1999 (GLBA) was a bi-partisan regulation under President Bill Clinton, passed by Congress on November 12, 1999. The GLBA was an attempt to update and modernize the financial industry.
What is the Banking Regulatory Act (GLBA)?
This banking regulatory act has an infosec reach that goes far beyond the financial services industry. The Graham-Leach-Bailey Act (GLBA) is a 1999 law that allowed financial services companies to offer both commercial and investment banking, something that had been banned since the Great Depression.
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What is the importance of the GLBA?
The purpose of the GLB Act is to ensure that financial institutions and their affiliates safeguard the confidentiality of personally identifiable information (PII) gathered from customer records in paper, electronic or other forms.
When was the GLB Act enacted and why?
The FDIC has created this webpage to inform consumers about the Title V of the Gramm-Leach-Bliley Act's (GLBA) (PDF Help) consumer provisions to ensure that financial institutions protect consumer's financial information. GLBA became law in 1999.
What is the purpose of GLBA and Regulation P laws?
The Board's Regulation P implements sections 502–509 of title V of the Gramm-Leach-Bliley Act--the portion of the act that concerns the privacy of consumer financial information. Enacted on November 12, 1999, the Gramm-Leach-Bliley Act (GLB Act) was intended to enhance competition for financial products and services.
What is the main purpose of the Gramm-Leach-Bliley Act quizlet?
The GLBA's purpose was to remove legal barriers preventing financial institutions from providing banking, investment and insurance services together.
What are the two main rules of the GLBA?
The GLBA requires companies that qualify as “financial institutions” to take several affirmative steps in order to prevent the unauthorized collection, use, and disclosure of NPI. It imposes these obligations under two “Rules”: (i) the Privacy Rule, and (ii) the Safeguards Rule.
What is the difference between regulation P and GLBA?
§ 1016.1 et seq.), adopted by the Consumer Financial Protection Bureau (the “CFPB”) pursuant to the GLBA, similarly implements the GLBA's requirements with respect to privacy of consumer personal information, but Regulation P applies to financial institutions, such as private funds, that are not subject to SEC or CFTC ...
What data is covered by GLBA?
GLBA covered information GLBA defines covered customer information as any record containing nonpublic personal information or personally identifiable financial information about a customer of PCC – whether in paper, electronic, or other form – that is handled or maintained by or on behalf of PCC or its affiliates.
Who enforces the Gramm-Leach-Bliley Act?
The FTCThe FTC enforces these provisions with regard to entities not specifically assigned by the provision to the Federal banking agencies or other regulators.
What is the Glass-Steagall Act and why was it important in banking history?
The Glass-Steagall Act effectively separated commercial banking from investment banking and created the Federal Deposit Insurance Corporation, among other things. It was one of the most widely debated legislative initiatives before being signed into law by President Franklin D. Roosevelt in June 1933.
What does GLB not protect?
The GLB Act does not protect public information, but it does also protect information obtained in connection with providing financial products or services.
Who introduced the Gramm-Leach-Bliley Act?
Representative Thomas Bliley (R), chairman of the House Commerce Committee, was also involved in drafting the House version of the bill. The U.S. Senate passed its version of the bill on May 6, 1999, by a vote of 54-44.
Which are three key rules of the GLBA?
There are three major components of the Gramm-Leach-Bliley Act including a Financial Privacy Rule, Safeguards Rule, and Pretexting Protection.
Overview
The Gramm–Leach–Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106–102 (text) (PDF), 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999–2001). It repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking companies, securities companies, and insurance compan…
Legislative history
The banking industry had been seeking the repeal of the 1933 Glass–Steagall Act since the 1980s, if not earlier. In 1987 the Congressional Research Service prepared a report that explored the cases for and against preserving the Glass–Steagall act.
Respective versions of the Financial Services Act were introduced in the U.S. S…
Changes caused by the Act
Many of the largest banks, brokerages, and insurance companies desired the Act at the time. The justification was that individuals usually put more money into investments when the economy is doing well, but they put most of their money into savings accounts when the economy turns bad. With the new Act, they would be able to do both 'savings' and 'investment' at the same financial institution, which would be able to do well in both good and bad economic times.
Remaining restrictions
Crucial to the passing of this Act was an amendment made to the GLBA, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a "less than satisfactory [sic] rating at its most recent CRA exam", essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the Community Reinvestment Act (CRA). This was an issue of hot contention, and the Clinton Administration stre…
Privacy
• GLBA compliance is mandatory; whether a financial institution discloses nonpublic information or not, there must be a policy in place to protect the information from foreseeable threats in security and data integrity.
• Major components put into place to govern the collection, disclosure, and protection of consumers' nonpublic personal information; or personally identifiable information include:
Financial Privacy Rule
(Subtitle A: Disclosure of Nonpublic Personal Information, codified at 15 U.S.C. §§ 6801–6809)
The Financial Privacy Rule requires financial institutions to provide each consumer with a privacy notice at the time the consumer relationship is established and annually thereafter. The privacy notice must explain the information collected about the consumer, where that information is shared, how that information is used, and how that information is protected. The notice must als…
Receipt of GLBA notices by consumers
Notice requirements may vary. In most cases, service of a GLBA notice is not necessary unless the entity serving the notice intends to "share" customer information, which the FTC defines as, "non-public personal information (NPI)", of customers required to be protected under GLBA.
A consumer may respond to service of a GLBA notice by:
• No response
Synergy between GLBA and GDPR
The European Union's General Data Protection Regulation (GDPR) became enforceable on 25 May 2018. As applies to consumers, the GDPR includes provision on scope of data collection, but also includes right of access, right to erasure, right to restriction of processing and right to data portability. Due to the multinational nature of some transactions, including data and internet transactions, and the possible implementation of corresponding regulations in some US states, i…