Gramm-Leach-Bliley Act (GLBA)

The Gramm-Leach-Bliley Act (GLBA), also known as the Financial Services Modernization Act, was created to enhance competition in the financial services industry. However, one of its critical components is the regulation of how personal consumer information is collected, disclosed, and protected.

Security Beyond Deregulation

  • While GLBA brought significant deregulation to the banking sector, it also introduced essential provisions for securing and protecting “nonpublic” personal information of consumers. Organisations working in the financial sector must ensure compliance with these privacy and security rules. Cybersecurity partners offer solutions to help navigate these requirements effectively and secure customer data.
  • GLBA: Key Elements and Consequences
    • The Safeguards Rule ensures that organisations secure the confidentiality of customer records and information, setting clear standards for data protection.
    • The Privacy Rule requires financial institutions to inform customers of their privacy practices and policies and gives them the ability to opt-out of having their information shared with third parties.
    • GLBA also prohibits pretexting, where individuals fraudulently obtain access to personal data by misrepresentation.

Penalties for Non-Compliance

Enforcement of the GLBA falls to various federal and state agencies, depending on the entity involved. Non-compliance with the GLBA can result in significant fines, potentially reaching $100,000 per violation, along with possible reputational damage to the organisation.

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