Financial Services Modernization Act of 1999


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Financial Services Modernization Act of 1999

Legislation in the United States that deregulated much of the American financial industry. It permitted banks, insurance companies and investment banks to offer each other's products for the first time since the Great Depression. That is, the same companies could offer insurance, brokerage services and/or regular banking services. The legislation resulted in a great deal of consolidation in the financial sector. Critics maintain that it caused banks to take on unnecessary risks that led to the late 2000s recession. It is more commonly called the Gramm-Leach-Bliley Act after its principal authors.
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Privacy was not an issue during the first four years of debate on the Financial Services Modernization Act of 1999 (the GrammLeach-Bliley act).
Several legislators, state departments and even the state governor are looking to impose new privacy rules in California that would be more stringent than those set forth in the Financial Services Modernization Act of 1999, better known as Gramm-Leach-Bliley.
But the passage of the Gramm-Leach-Biley Financial Services Modernization Act of 1999 has created some unlikely, and profitable, marriages .They are marriages of convenience, to be sure.
Insurers can move ahead of banks and brokers in online selling by offering other financial products as allowed by the Financial Services Modernization Act of 1999.
Title V of the Gramm-Leach-Bliley Financial Services Modernization Act of 1999 contains comprehensive federal privacy protections for consumers, and it impacts all financial institutions, including insurance companies.
The biggest development in the wake of the Financial Services Modernization Act of 1999 may be that international competitors will make larger inroads into the U.S.
The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 has contributed to the use of data warehousing and data-mining techniques in both the banking and insurance industries.
The five trade groups submitted a document to the IRS in July noting that enactment of the Financial Services Modernization Act of 1999 will "increase the frequency of sales and purchases of insurance companies." As a result, the industry and the public need clear federal guidance on associated tax issues and liabilities, as to the final application of the IRS ruling for the industry.
As with the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, there is concern about the definition of "nonpublic" or "identified" information.
ReliaStar said it is the first financial-services company to receive permission to organize and operate a national bank under the Financial Services Modernization Act of 1999.

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