Questions and Answers
What does GLBA stand for?
What was the primary focus of the GLBA?
To remove legal barriers preventing financial institutions from providing banking, investment and insurance services together.
How did GLBA change the financial industry landscape?
Led to the consolidation of different types of financial institutions into single holding companies.
What are the purposes of the GLBA?
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How are GLBA rules implemented?
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What is the CFPB?
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What is the FTC?
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Which Federal Regulator is responsible for the privacy regulation?
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What are non-traditional financial institutions according to the GLBA?
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Which Federal regulator is responsible for information security regulation?
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What is a financial institution according to the GLBA?
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What are the most common financial institutions?
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What non-bank institutions does GLBA apply to?
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What does NPI stand for?
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What types of information are considered NPI?
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What is the definition of 'Consumers' under GLBA?
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What differentiates a customer from a consumer?
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What are the GLBA rights and duties?
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What are initial privacy notices?
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What information do annual notices contain?
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What are GLBA exceptions?
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What does FCRA stand for?
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What is reuse and redisclosure in the context of GLBA?
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What is the Safeguards Rule?
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What is the purpose of an Information Security Program?
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Study Notes
Gramm-Leach-Bliley Act (GLBA)
- GLBA stands for Gramm-Leach-Bliley Act, a significant piece of legislation impacting financial institutions.
- Aimed to remove barriers preventing financial entities from offering a combination of banking, investment, and insurance services.
Impact on Financial Industry
- Transformation of financial landscape through consolidation of various financial institutions into single holding companies.
Key Purposes
- Ensures customer privacy and protects the security and confidentiality of customer information.
Regulatory Framework
- Different federal agencies, such as the CFPB and FTC, are responsible for drafting and implementing rules specific to various financial sectors.
Key Federal Agencies
- CFPB: Consumer Financial Protection Bureau, oversees privacy regulations.
- FTC: Federal Trade Commission, responsible for information security regulations.
Financial Institutions Defined
- Includes companies involved in extending credit, taking deposits, and providing insurance services as identified by federal law.
Common Financial Institutions
- Includes banks, credit unions, securities brokers, and insurance companies.
Non-Bank Institutions Under GLBA
- Applies to "significantly engaged" non-bank entities like consumer reporting agencies, resellers, debt collectors, and mortgage brokers.
Non-Public Personal Information (NPI)
- NPI encompasses any personal data provided by consumers to obtain financial services, transactional data, and various derived lists or groupings.
Consumer vs. Customer
- Consumer: Broad term that includes anyone using financial services.
- Customer: Specific type of consumer with an established relationship with a financial institution, such as having a loan.
Consumer Rights and Duties under GLBA
- Rights include opting out of certain disclosures, receiving initial and annual privacy notices, limitations on disclosure to nonaffiliated parties, and the safeguarding of customer information.
Privacy Notices
- Initial privacy notices must detail types of NPI collected and explained annually to inform consumers about their rights regarding information sharing.
Exceptions to GLBA Disclosures
- Certain disclosures are permissible for transaction processing, consumer consent, fraud prevention, and compliance with the Fair Credit Reporting Act.
Fair Credit Reporting Act (FCRA)
- Establishes guidelines for the collection and sharing of consumer information by reporting agencies.
Safeguards Rule
- Issued by the FTC, it mandates that financial institutions create and maintain procedures to meet GLBA information security requirements.
Information Security Program
- Aims to ensure the confidentiality and security of customer information, protecting against potential threats and unauthorized access.
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Test your knowledge of the Gramm-Leach-Bliley Act with these flashcards. Learn about the act's purpose, its impact on financial institutions, and key terminology associated with it. Perfect for students or anyone interested in finance and law.