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. 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. 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. Grammleachbliley act disclosure of nonpublic personal. As financial institutions have evolved since 1999, the way they. The rules 160k pdf will govern how financial institutions may pass on. 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.
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. 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. Impact of the grammleachbliley act university of arkansas. Registration and regulation under the advisers act 29.
In the wake of the doddfrank act, the consumer financial protection bureau became responsible for implementing the rule. The doddfrank act granted rulemaking authority for most of subtitle a of title v of the grammleachbliley act 15 u. Registration and regulation under the advisers act. These types of data protection laws are vital for protecting consumers from having their sensitive information shared. 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. Grammleachbliley act glba personal financial records. The grammleachbliley act largely amended other acts. Enforcement a in general this subchapter and the regulations prescribed thereunder shall be enforced by the federal functional regulators, the state insurance. 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. We find that the law has a differential impact across the financial services industry. You will see signing agents advertise that they are glba compliant. The grammleachbliley act glba, also known as the financial services modernization act of 1999, pub. Pretexters may pose as representatives of survey firms, banks, internet. We examine whether systematic risk of the financial services industry banks, finance, insurance, and realestate sectors declined after the passage of glba.
In 1987 the congressional research service prepared a report that explored the cases. The grammleachbliley act of 1999 relates to the protection of personal financial information held by financial institutions. The grammleachbliley act of 1999 glba was a bipartisan regulation under president bill clinton, passed by congress on november 12, 1999. The grammleachbliley act introduction simpson thacher. 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. Federal deposit insurance act, shall conduct a study of the extent. The grammleachbliley act glb and protecting consumer. Study of financial modernizations effect on the accessibility of small busi. Grammleachbliley act from wikipedia, the free encyclopedia the grammleachbliley act, also known as the grammleachbliley financial services modernization act, pub. The computer security act of 1987 is the cornerstone of many computerrelated federal laws and enforcement efforts.
Selected legal issues congressional research service 1 introduction recent data breaches at major u. Additionally, the glba codifies protections against pretexting, the practice of obtaining. But states also have been active in the data privacy arena. The universitys program seeks to 1 ensure the security and confidentiality of customer records and information. 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. With the enactment of glba, congress has finally achieved a goal that has. How to comply with the privacy of consumer financial. Protecting customer data under the grammleachbliley act. 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. Grammleachbliley act university of missouri system. 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. As a consequence, in previous research, information on the performance and. Federal privacy laws and the grammleachbliley act in particular, require specific actions by those organizations to which they apply.
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 glb act or glba is also known as the financial modernization act of 1999. Grammleachbliley act ensure that financial institutions, including mortgage brokers and lenders, protect nonpublic personal information of. Bliley has been presented by both its supporters and detractors as a revolution in financial services. The united states code is meant to be an organized, logical compilation of the laws passed by congress. All three industries have gained due to this law with. 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. Chapter 3 study guide indicate whether the statement is true or false. This grammleachbliley act is often referred to as the glba. A key objective of the study is to determine if, on average, there are. 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. However, the act itself had little impact on the trading activities of.
Developments in the grammleachbliley act during 200506. 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. Privacy of consumer financial information grammleach. Find, read and cite all the research you need on researchgate. The grammleachbliley act glb is one of several federal laws specifically designed to protect consumers and their sensitive information. With one minor exception, which may be attributed to earlier changes in federal banking laws, the act also did not create significant synergies between. 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. Pdf the impact of the grammleachbliley act on the financial. The fdic has created this webpage to inform consumers about the title v of the grammleachbliley acts glba consumer provisions to ensure that financial. These poll responses led to subsequent studies that indicated how much. Pdf the effects of the grammleachbliley act on bank. Pdf this paper examines the impact of grammleachbliley act across three main sectors of.
This paper examines the impact of grammleachbliley act across three main sectors of the financial services industry. 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. The gramm leach bliley act, also known as the financial services modernization act of 1999, is an act of the 106th united states congress. Secondary sources, including treatises, articles both scholarly and practical, and practice or study aids. 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. 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.
It repealed part of the glasssteagall act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that. 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. The grammleachbliley act glba, also known as the financial services modernization act. Provides for a study of the use of subordinated debt to protect the financial system.
The longterm risk effects of the grammleachbliley act. The glb act broadly defines financial institution as any institution engaged in financial activities on behalf of consumers. 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. Grammleachbliley act, 15 usc 6805 title 15, chapter 94, subchapter i, sec. The grammleachbliley act the glb act was passed in 1999. This specific law limits both the disclosure and the use of a customers information. The grammleachbliley act glba, which is also known as the financial services. The law applies to many types of financial institutions.
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