The Gramm-Leach-Bliley Act (GLBA), also known as the Financial Modernization Act of 1999, includes provisions to protect consumers’ personal financial information held by financial institutions. There are three principal parts to the privacy requirements: the Financial Privacy Rule, Safeguards Rule and pretexting provisions.
The GLBA gives authority to eight federal agencies and the states to administer and enforce the Financial Privacy Rule and the Safeguards Rule. These two regulations apply to financial institutions, which include not only banks, securities firms, and insurance companies, but also companies providing many other types of financial products and services to consumers.
These services include 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. Such non-traditional "financial institutions" are regulated by the Federal Trade Commission.
GLBA noncompliance can mean severe fines and even class-action lawsuits. Noncompliance can result in the following:
- Institutions can be subject to civil penalties of up to $100,000 for each violation.
- The officers and directors of the financial institution can be subject to, and personally liable for, a civil penalty of up to $10,000.
- Imprisonment for up to five years is possible.
The GLBA also provides privacy protections against the disclosure of private patient information to third parties and requires institutions to have an administrative, physical and technical structure to protect the confidentiality and integrity of personal consumer information.
FACTA Land Ban Act of 1994
Federal Rules of Civil Procedure RCRA
Gramm-Leach-Bliley Act Safe Harbor Act
HIPAA Sarbanes-Oxley Act
IRS Revenue Procedure 98-25 SEC Regulation S-P
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