What is the Gramm-Leach-Bliley Act (GLBA)?
The Gramm-Leach-Bliley Act (GLBA), sometimes called the Financial Services Modernization Act, is a federal law passed in 1999 that affects the way financial institutions handle sensitive information. GLBA requires the financial institutions to explain how they protect customers’ non-public personal information, or NPPI. It is made up of three main parts: the Financial Privacy Rule, the Safeguards Rule, and the Pretexting Provisions. The Financial Privacy Rule requires financial institutions to tell customers what type of information is collected and how it is used. Financial institutions must also provide customers the right to opt out of having their information shared with third parties. The Safeguards Rule requires financial institutions to protect customers’ information from unauthorized access or use. It outlines specific steps the institution must take to protect customers’ information, such as training staff, setting up policies and procedures, and implementing a security program. The Pretexting Provisions prohibit deceptive tactics used to get information, such as pretending to be someone else or asking a customer for information they don’t need. In Georgia, GLBA applies to certain state-chartered banks, state-licensed consumer finance companies, and state-chartered credit unions. It also applies to insurance agents, accountants, and tax preparers. Financial institutions must adhere to the rules in the GLBA or face fines and penalties.
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