Gramm-Leach-Bliley Act Flashcards

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What does GLBA stand for?

Gramm-Leach-Barry Act
Gramm-Leach-Bliley Act (correct)
General-Leach-Bliley Act
General-Law-Bliley Act

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?

Respect privacy of customers, protect security and confidentiality of information about those customers. Signup and view all the answers

How are GLBA rules implemented?

Different federal agencies write rules and implement them for different sectors. Signup and view all the answers

What is the CFPB?

Consumer Financial Protection Bureau Signup and view all the answers

What is the FTC?

Federal Trade Commission Signup and view all the answers

Which Federal Regulator is responsible for the privacy regulation?

CFPB - Consumer Financial Protection Bureau Signup and view all the answers

What are non-traditional financial institutions according to the GLBA?

Consumer Reporting Agencies & Debt Collectors Signup and view all the answers

Which Federal regulator is responsible for information security regulation?

FTC - Federal Trade Commission Signup and view all the answers

What is a financial institution according to the GLBA?

Any company engaging in certain financial activities like extending credit, taking deposits, and providing insurance. Signup and view all the answers

What are the most common financial institutions?

Banks, Credit Unions, Securities Brokers, and Insurance Companies Signup and view all the answers

What non-bank institutions does GLBA apply to?

Consumer Reporting Agencies, Resellers, Debt Collectors, Mortgage Brokers, and others that provide financial services. Signup and view all the answers

What does NPI stand for?

Non-public Personal Information Signup and view all the answers

What types of information are considered NPI?

<ol> <li>Any info a consumer provides to obtain a financial product; 2. Transaction info; 3. Information obtained during service provision; 4. Consumer lists derived from this information.</li> </ol> Signup and view all the answers

What is the definition of 'Consumers' under GLBA?

A broad term referring to individuals who engage with financial institutions. Signup and view all the answers

What differentiates a customer from a consumer?

A customer is a specific type of consumer with an existing relationship with a financial institution. Signup and view all the answers

What are the GLBA rights and duties?

<ol> <li>Right to opt-out; 2. Initial and annual privacy notices; 3. Limits on disclosure to nonaffiliated third parties; 4. Safeguarding customer information.</li> </ol> Signup and view all the answers

What are initial privacy notices?

These are notices provided to consumers regarding their privacy rights. Signup and view all the answers

What information do annual notices contain?

Types of NPI collected, disclosure parties, opt-out explanations, and info provision descriptions. Signup and view all the answers

What are GLBA exceptions?

Disclosures necessary for transaction processing, consumer consent, prevention of fraud, or compliance with laws. Signup and view all the answers

What does FCRA stand for?

Fair Credit Reporting Act Signup and view all the answers

What is reuse and redisclosure in the context of GLBA?

Can retrieve information to protect against fraud but can't extend access without limitations. Signup and view all the answers

What is the Safeguards Rule?

A rule issued by the FTC to implement GLBA information security requirements. Signup and view all the answers

What is the purpose of an Information Security Program?

To ensure security and confidentiality, protect against threats, and prevent unauthorized access to customer info. Signup and view all the answers

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.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

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.