Federal deposit insurance act, shall conduct a study of the extent. Privacy of consumer financial information grammleach. Additionally, the glba codifies protections against pretexting, the practice of obtaining. The grammleachbliley act glb act or glba is also known as the financial modernization act of 1999. The grammleachbliley act glba, also known as the financial services modernization act. This is a law which all of us should be compliant all of the time. In 2014 the cfpb puts its version in place, called reg p. The safeguards rule mandates that financial institutions protect the security, confidentiality, and integrity of customer information by implementing and maintaining a comprehensive written information security program.
With the enactment of glba, congress has finally achieved a goal that has. Grammleachbliley act from wikipedia, the free encyclopedia the grammleachbliley act, also known as the grammleachbliley financial services modernization act, pub. On august 31, 2006, the agencies solicited public comment on certain aspects of the fact act study,5 and the federal reserve board has a draft of questions to be used in reporting to. Ii at any time after the date that is 1 year after the date of the enactment of the grammleachbliley act, is not affiliated with a broker or dealer that has been registered for more than 1 year in accordance with this act, and engages in dealing, market making, or underwriting activities, other than with respect to exempted securities. This grammleachbliley act is often referred to as the glba. Registration and regulation under the advisers act. Department of the treasury report to the congress on the impact of the grammleachbliley act on credit to small businesses and farms january 2005 submitted to the congress by the secretary of the treasury as required by section 109 of the grammleachbliley act. Report by the board of governors of the federal reserve. This paper uses the glb act as a case study to analyze the arguments for and against a policy that requires firms to issue privacy notices to their customers. Interagency proposal for model privacy form under the. These poll responses led to subsequent studies that indicated how much. The grammleachbliley act glba, which is also known as the financial services.
Grammleachbliley act glba personal financial records. The grammleachbliley act glb, together with an implementing federal trade commission ftc safeguards rule, regulates the security and confidentiality of customer information collected or maintained by or on behalf of financial institutions or their affiliates. The grammleachbliley act of 1999 relates to the protection of personal financial information held by financial institutions. This specific law limits both the disclosure and the use of a customers information. As a consequence, in previous research, information on the performance and. The grammleachbliley act largely amended other acts. With the bipartisan passage of the grammleachbliley act. Developments in the grammleachbliley act during 200506. With a faster, less expensive, and convenient means of transferring information, and with companies entering into a wider variety of business activities than ever, consumers have a very strong interest in who has access to their personal information. Bliley has been presented by both its supporters and detractors as a revolution in financial services.
All three industries have gained due to this law with. The grammleachbliley act glba, also known as the financial services modernization act of 1999, pub. The longterm risk effects of the grammleachbliley act. This paper examines the impact of grammleachbliley act across three main sectors of the financial services industry. However, the act itself had little impact on the trading activities of. Impact of the grammleachbliley act university of arkansas. At its top level, it divides the world of legislation into fifty topicallyorganized titles, and each title is further subdivided into any number of logical subtopics. It repealed part of the glasssteagall act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that. As financial institutions have evolved since 1999, the way they.
The rules 160k pdf will govern how financial institutions may pass on. Pdf this paper examines the impact of grammleachbliley act across three main sectors of. Pdf the effects of the grammleachbliley act on bank. The grammleachbliley act required the federal trade commission ftc and other government agencies that regulate financial institutions to implement regulations to carry out the acts financial privacy provisions glb act. Federal privacy laws and the grammleachbliley act in particular, require specific actions by those organizations to which they apply. The gramm leach bliley act, also known as the financial services modernization act of 1999, is an act of the 106th united states congress. Grammleachbliley act ensure that financial institutions, including mortgage brokers and lenders, protect nonpublic personal information of.
With one minor exception, which may be attributed to earlier changes in federal banking laws, the act also did not create significant synergies between. Pretexters may pose as representatives of survey firms, banks, internet. It repealed part of the glass steagall act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. The grammleachbliley act requires financial institutions companies that offer consumers financial products or services like loans, financial or investment advice, or insurance to explain their informationsharing practices to their customers and to safeguard sensitive data. The computer security act of 1987 is the cornerstone of many computerrelated federal laws and enforcement efforts. The safeguards rule of the grammleachbliley act glba requires financial institutions to develop and maintain a security plan to protect the confidentiality and integrity of personal information. But states also have been active in the data privacy arena. Selected legal issues congressional research service 1 introduction recent data breaches at major u. This study differs from prior work in that we examine changes over a long period of time 5 years before and 5 years after the act and we use the carhart 1997 fourfactor model for assessing changes in risks. Provides for a study of the use of subordinated debt to protect the financial system. The universitys program seeks to 1 ensure the security and confidentiality of customer records and information. Pdf the impact of the grammleachbliley act on the financial. How to comply with the privacy of consumer financial. Grammleachbliley act disclosure of nonpublic personal.
Federal agencies with regulatory authority were empowered to adopt and implement rules setting forth, which business entities are subject to the act and how to comply with. We find that the law has a differential impact across the financial services industry. The fdic has created this webpage to inform consumers about the title v of the grammleachbliley act s glba pdf help consumer provisions to ensure that financial institutions protect consumers financial information. Chapter 3 study guide indicate whether the statement is true or false. The grammleachbliley act the glb act was passed in 1999. The fdic has created this webpage to inform consumers about the title v of the grammleachbliley acts glba consumer provisions to ensure that financial. The grammleachbliley act introduction the grammleachbliley act glba, enacted in 1999, provides a number of provisions to protect consumers private financial information against exploitation and loss while in the hands of financial institutions and other organizations. You will see signing agents advertise that they are glba compliant. The united states code is meant to be an organized, logical compilation of the laws passed by congress. Secondary sources, including treatises, articles both scholarly and practical, and practice or study aids. In november 1999, president clinton signed into law s. In 1987 the congressional research service prepared a report that explored the cases. In the first empirical study of the effect of the grammleachbliley act on the financial services industry, a finance researcher at the university of arkansas found that the act had little effect on bank profitability and productivity.
The balance of this outlook will discuss the underlying purposes of the glba, the longterm prospects of the banking industry, and the difficult choices ahead for policymakers. A key objective of the study is to determine if, on average, there are. Compliance with the law involves the filing of initial privacy notices, optout notices, annual privacy notices, adherence to the acts prohibition on the sharing of account numbers, and the maintenance of an effective security system with the designation of one employee to oversee security. Protecting customer data under the grammleachbliley act. Registration and regulation under the advisers act 29. Grammleachbliley act university of missouri system. The grammleachbliley act of 1999 glba was a bipartisan regulation under president bill clinton, passed by congress on november 12, 1999. Section 214e of the fair and accurate credit transactions act of 2003 fact act also calls for a study of information sharing practices fact act study. The grammleachbliley act glb is one of several federal laws specifically designed to protect consumers and their sensitive information. The law applies to many types of financial institutions. We examine whether systematic risk of the financial services industry banks, finance, insurance, and realestate sectors declined after the passage of glba. Financial services modernization act grammleachbliley summary of provisions title i facilitating affiliation among banks, securities firms, and insurance companies repeals the restrictions on banks affiliating with securities firms contained in.
It is a united states federal law that requires financial institutions to explain how they share and protect their customers private information. These types of data protection laws are vital for protecting consumers from having their sensitive information shared. In the wake of the doddfrank act, the consumer financial protection bureau became responsible for implementing the rule. Study of financial modernizations effect on the accessibility of small busi. Find, read and cite all the research you need on researchgate. The grammleachbliley act introduction simpson thacher. The grammleachbliley act glb and protecting consumer. Enforcement a in general this subchapter and the regulations prescribed thereunder shall be enforced by the federal functional regulators, the state insurance. Financial services modernization act gramm leach bliley summary of provisions title i facilitating affiliation among banks, securities firms, and insurance companies repeals the restrictions on banks affiliating with securities firms contained in sections 20 and 32 of the glasssteagall act. The fixing americas surface transportation act fast act included a provision amending section 503 of the grammleachbliley act glba 15 usc 6803 to provide a new exception to glbas annual privacy notice requirement.