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About GLB
The GLB Act gives authority to eight federal agencies
and the states to administer and enforce the
Financial Privacy Rule and the Safeguards Rule.
These two regulations apply to "financial
institutions," which include not only banks, securities
firms, and insurance companies, but also companies
providing many other types of financial products and
services to consumers. Among these services are
lending, brokering or servicing any type of consumer
loan, transferring or safeguarding money, preparing
individual tax returns,
providing financial advice or credit counseling,
providing residential real estate settlement services,
collecting consumer debts and an
array of other activities. Such non-traditional
"financial institutions" are regulated by the FTC.
Financial Privacy
Rule
The Financial Privacy Rule requires financial
institutions to give their customers privacy notices
that explain the financial institution’s information
collection and sharing practices. In turn, customers
have the right to limit some sharing of their
information. Also, financial institutions and other
companies that receive personal financial information
from a financial institution may be limited in their
ability to use that information.
Safeguards Rule
Under the Gramm-Leach-Bliley Act, the Safeguards Rule,
enforced by the Federal Trade Commission, requires
financial institutions to have a security plan to
protect the confidentiality and integrity of personal
consumer information.
SUMMARY: The Federal Trade Commission (‘‘FTC’’ or
‘‘Commission’’) is issuing a final Safeguards Rule, as
required by section 501(b) of the Gramm-Leach-Bliley
Act (‘‘G–L–B Act’’ or ‘‘Act’’), to establish standards
relating to administrative, technical and physical
information safeguards for financial institutions
subject to the Commission’s jurisdiction. As required
by section 501(b), the standards are intended to:
Ensure the security and confidentiality of customer
records and information; protect against any
anticipated threats or hazards to the security or
integrity of such records; and protect against
unauthorized access to or use of such records or
information that could result in substantial harm or
inconvenience to any customer.
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information.
Customers and
Consumers
A company's obligation to comply with the GLB Act
depends upon whether or not the company has consumers
or customers who obtain its services.
Consumers: individual who obtains or has
obtained a financial product or service from a
financial institution for personal, family or
household reasons.
Costumers: a consumer with a continuing
relationship with a financial institution.
Why is the difference between consumers and customers
important? Because only customers are entitled to
receive a financial institution's privacy notice
automatically. The privacy notice must be given to
individual customers or consumers by mail or in-person
delivery.
The Privacy Notice
The privacy notice must be a clear, conspicuous, and
accurate statement of the company's privacy practices;
it should include what information the company collects
about its consumers and customers, with whom it shares
the information, and how it protects or safeguards the
information. The notice applies to the "nonpublic
personal information" the company gathers and discloses
about its consumers and customers; in practice, that
may be most - or all - of the information a company has
about them.
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