Although new technological developments make our lives more convenient, they can also make us increasingly vulnerable to having our personal information get into the wrong hands. The Gramm-Leach-Bliley Act (GLB Act or GLBA), also known as the Financial Modernization Act, helps control the way financial institutions deal with the private information of individuals. The Act was created in 1999 and consists of three sections that define how it works to protect us.
The first section of the act is the Financial Privacy Rule. This regulates the collection and disclosure of private financial information.
The second section is the Safeguards Rule. This stipulates that financial institutions must implement security programs to protect this information.
Finally, the Pretexting provisions work to prohibit pretexting or the accessing of private information under false pretenses. The Act also requires financial institutions to give customers a written policy that explains their information sharing practices.
GLBA is not only about protecting customers. It also worked to repeal the Glass-Steagall Act of 1933, removing barriers that prohibited any one institution from acting as any combination of an investment bank, commercial bank, and insurance company. Now the three can consolidate making operations easier for both the customers and the institutions.
Of course, GLBA compliance is vital for institutions as not following the rules of the act can be a serious criminal offense. While employees can be used to make sure all stipulations of the GLBA are enforced, it may become necessary to call in a third party who can ensure that the institution is doing all it can to adhere to the terms of the act.
The GLBA is extremely important to the functioning of financial institutions, and it is essential to understand how it works to protect customers in the world of banking and finances. Make sure your employees are aware of all proper practices and call in an expert if necessary. Make privacy a priority in the way you run your business.