Gramm-Leach-Bliley Act

(redirected from GLB Act)

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.

Gramm-Leach-Bliley Act

Contains privacy provisions regarding consumers' financial information.Financial institutions are required to provide information to their customers regarding information-gathering and information-sharing practices.Consumers may opt out if they do not want their information shared with nonaffiliated third parties.

References in periodicals archive ?
The pretexting provisions of the GLB Act protect consumers from individuals and companies attempting to obtain their personal financial information under false pretenses, a practice known as pretexting.
A study done by a professor at the University of Arkansas says the GLB Act has had little effect on bank profitability.
The court disagreed, writing, "Despite Guin's persistent argument that any nonpublic personal information stored on a laptop computer should be encrypted, the GLB Act does not contain any such requirement.
The GLB Act, effective November 13, 2000, allows mergers of financial institutions and regulates the disclosure of NPI.
Section 503 of the GLB Act requires financial institutions to provide a notice to each customer that describes the institution's policies and practices regarding the disclosure to third parties of nonpublic personal information.
Howard Beales, director of the FTC Bureau of Consumer Protection, wrote in an April letter to the ABA that although the FTC recognizes the issues raised regarding the application of the GLB Act to lawyers, there are "significant questions as to the legal authority of the commission" to grant the exemption requested by the ABA.
Beginning July 1, 2001, the GLB Act required financial institutions to provide notice and an opportunity to opt-out of disclosures of "nonpublic personal information" to nonaffiliated third parties (exceptions apply).
Gramm, on the other hand, had unwaveringly declined to deal with privacy issues, claiming the GLB Act and its privacy rules needed more time to work after their implementation this past July.
Meanwhile, Congress managed to pound out the GLB Act, which included its own set of carefully crafted privacy rules to limit the disclosure of "nonpublic personal information" about individuals who obtain financial products or services for personal, family, or household purposes.
The 12-page summary provides guidance to Appraisal Institute members on the privacy disclosure requirements of the GLB Act and is designed to assist them in complying with those requirements.
Community advocates have been concerned that the GLB Act, which allows financial institutions to merge with other financial institutions with few restrictions, will significantly erode the scope of CRA by creating a two-tiered banking and lending industry.
The GLB Act deregulated the financial services industry by removing some barriers that separated commercial banking from investment banking, merchant banking and insurance.