Financial Institutions Disclosure Restrictions
Question
In _______________, Congress enacted restrictions on the way financial institutions disclose information on customers to third parties. The law also requires financial institutions to provide disclosures, both at the time of establishing the customer relationship and annually thereafter.
Answers
Explanations
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A. B. C. D.C
The correct answer is option C, Gramm-Leach-Billey Act of 1999.
The Gramm-Leach-Billey Act of 1999 (GLBA) is a federal law that governs how financial institutions handle consumers' non-public personal information. The Act is named after its primary sponsors: Senator Phil Gramm (R-Texas), Representative Jim Leach (R-Iowa), and Representative Thomas J. Bliley (R-Virginia).
The GLBA repealed a portion of the Glass-Steagall Act of 1933, which had prohibited banks from engaging in both commercial and investment banking activities. The repeal allowed banks, securities firms, and insurance companies to merge and offer a wider range of financial services under one umbrella, leading to the creation of financial conglomerates.
The GLBA contains several provisions related to the privacy of consumers' financial information. It requires financial institutions to provide customers with clear and conspicuous notices about their privacy policies and practices, including how they collect, use, and share customers' non-public personal information. These disclosures must be made at the time of establishing the customer relationship and annually thereafter.
The GLBA also provides consumers with the right to opt-out of the sharing of their information with third parties, except as allowed by law. Additionally, the law requires financial institutions to implement measures to safeguard customer information from unauthorized access and use.
Overall, the GLBA aims to promote transparency and accountability in the handling of consumers' financial information and to ensure that their privacy rights are protected.
