Difference between revisions of "Gramm Leach Bliley Act"

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'''113 Stat.-1341 GrammLeach Bliley Act 1999 (Financial Modernization Act and Privacy of Consumer)'''
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{{Law
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|Short title=Gramm–Leach–Bliley Act (GLBA)
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'''Text of Law'''
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|Official text=https://www.govinfo.gov/content/pkg/STATUTE-113/pdf/STATUTE-113-Pg1338.pdf
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TITLE V-PRIVACY-SUBTITLE A-Sec. 501 and etc. :SEC. 502. OBLIGATIONS WITH RESPECT TO DISCLOSURES OF PERSONAL INFORMATION.
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|Country/Jurisdiction=United States
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(a) NOTICE REQUIREMENTS.—Except as otherwise provided in
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|Regulatory bodies=FTC
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this subtitle, a financial institution may not, directly or through
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|Date enacted=1999/11/12
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any affiliate, disclose to a nonaffiliated third party any nonpublic
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|Scope of the law=Financial Institutions
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personal information, unless such financial institution provides or
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|Short summary introduction=The Gramm–Leach–Bliley Act (GLBA) provides customers to have secured information by financial institutions. The Act also prevents financial institutions from disclosing individuals' nonpublic personal information which is confidential. However, individuals have the right to choose whether the information is disclosed under the Act.
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has provided to the consumer a notice that complies with section
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|Text of the law=:{{SectionHarm|Section=SEC. 501. PROTECTION OF NONPUBLIC PERSONAL INFORMATION.|Harms=Insecurity, Breach of Confidentiality}}
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503.
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::(a) Privacy Obligation Policy.--It is the policy of the Congress
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(b) OPT OUT.—
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that each financial institution has an affirmative and continuing
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(1) IN GENERAL.—A financial institution may not disclose
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obligation to respect the privacy of its customers and to protect the
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nonpublic personal information to a nonaffiliated third party
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security and confidentiality of those customers' nonpublic personal
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unless—
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information.
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(A) such financial institution clearly and conspicuously
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::(b) Financial Institutions Safeguards.--In furtherance of the policy
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discloses to the consumer, in writing or in electronic form
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in subsection (a), each agency or authority described in section 505(a) shall establish appropriate standards for the financial institutions subject to their jurisdiction relating to administrative, technical, and physical safeguards--
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or other form permitted by the regulations prescribed under
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:::{{SectionPersonalInformation|Section=(1) to insure the security and confidentiality of customer records and information;|Personal=Account, Identifying}}
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section 504, that such information may be disclosed to
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:::(2) to protect against any anticipated threats or hazards to the security or integrity of such records; and
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such third party;
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:::(3) to protect against unauthorized access to or use of such records or information which could result in substantial harm or inconvenience to any customer.
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(B) the consumer is given the opportunity, before the
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:SEC. 502. OBLIGATIONS WITH RESPECT TO DISCLOSURES OF PERSONAL INFORMATION.  
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time that such information is initially disclosed, to direct
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::{{SectionHarm|Section=(a) NOTICE REQUIREMENTS.—Except as otherwise provided in this subtitle, a financial institution may not, directly or through any affiliate, disclose to a nonaffiliated third party any nonpublic personal information, unless such financial institution provides or has provided to the consumer a notice that complies with section 503.|Harms=Exclusion, Disclosure}}
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that such information not be disclosed to such third party;
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::{{SectionHarm|Section=(b) OPT OUT.—|Harms=Exclusion, Disclosure}}
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and
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:::(1) IN GENERAL.—A financial institution may not disclose nonpublic personal information to a nonaffiliated third party unless—
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(C) the consumer is given an explanation of how the
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::::(A) such financial institution clearly and conspicuously discloses to the consumer, in writing or in electronic form or other form permitted by the regulations prescribed under section 504, that such information may be disclosed to such third party;
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consumer can exercise that nondisclosure option.
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::::(B) the consumer is given the opportunity, before the time that such information is initially disclosed, to direct that such information not be disclosed to such third party; and
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(2) EXCEPTION.—This subsection shall not prevent a financial institution from providing nonpublic personal information
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::::{{SectionHarm|Section=(C) the consumer is given an explanation of how the consumer can exercise that nondisclosure option.|Harms=Exclusion}}
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to a nonaffiliated third party to perform services for or functions
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:SEC. 508. STUDY OF INFORMATION SHARING AMONG FINANCIAL AFFILIATES.
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on behalf of the financial institution, including marketing of
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::{{SectionHarm|Section=(a) IN GENERAL.—The Secretary of the Treasury, in conjunction with the Federal functional regulators and the Federal Trade Commission, shall conduct a study of information sharing practices among financial institutions and their affiliates. Such study shall include—|Harms=Insecurity}}
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the financial institution’s own products or services, or financial
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:::(1) the purposes for the sharing of confidential customer information with affiliates or with nonaffiliated third parties;
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products or services offered pursuant to joint agreements
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:::(2) the extent and adequacy of security protections for such information;
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between two or more financial institutions that comply with
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:::(3) the potential risks for customer privacy of such sharing of information;
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the requirements imposed by the regulations prescribed under
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:::(4) the potential benefits for financial institutions and affiliates of such sharing of information;
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section 504, if the financial institution fully discloses the providing of such information and enters into a contractual agreement with the third party that requires the third party to
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:::(5) the potential benefits for customers of such sharing of information;
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maintain the confidentiality of such information.
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:::(6) the adequacy of existing laws to protect customer privacy;
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(c) LIMITS ON REUSE OF INFORMATION.—Except as otherwise
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:::(7) the adequacy of financial institution privacy policy and privacy rights disclosure under existing law;
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provided in this subtitle, a nonaffiliated third party that receives
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:::(8) the feasibility of different approaches, including optout and opt-in, to permit customers to direct that confidential information not be shared with affiliates and nonaffiliated third parties; and
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from a financial institution nonpublic personal information under
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:::(9) the feasibility of restricting sharing of information for specific uses or of permitting customers to direct the uses for which information may be shared.
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this section shall not, directly or through an affiliate of such
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:{{SectionHarm|Section=SEC. 521. PRIVACY PROTECTION FOR CUSTOMER INFORMATION OF FINANCIAL INSTITUTIONS.|Harms=Disclosure, Distortion}}
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receiving third party, disclose such information to any other person
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::(a) PROHIBITION ON OBTAINING CUSTOMER INFORMATION BY FALSE PRETENSES.—It shall be a violation of this subtitle for any person to obtain or attempt to obtain, or cause to be disclosed or attempt to cause to be disclosed to any person, customer information of a financial institution relating to another person—
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that is a nonaffiliated third party of both the financial institution
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:::(1) by making a false, fictitious, or fraudulent statement or representation to an officer, employee, or agent of a financial institution;
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and such receiving third party, unless such disclosure would be
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:::(2) by making a false, fictitious, or fraudulent statement or representation to a customer of a financial institution; or
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lawful if made directly to such other person by the financial institution.
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:::(3) by providing any document to an officer, employee, or agent of a financial institution, knowing that the document is forged, counterfeit, lost, or stolen, was fraudulently obtained, or contains a false, fictitious, or fraudulent statement or representation.
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(d) LIMITATIONS ON THE SHARING OF ACCOUNT NUMBER
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::{{SectionPersonalInformation|Section=(b) PROHIBITION ON SOLICITATION OF A PERSON TO OBTAIN CUSTOMER INFORMATION FROM FINANCIAL INSTITUTION UNDER FALSE PRETENSES.—It shall be a violation of this subtitle to request a person to obtain customer information of a financial institution, knowing that the person will obtain, or attempt to obtain, the information from the institution in any manner described in subsection (a).|Personal=Account, Transactional}}
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INFORMATION FOR MARKETING PURPOSES.—A financial institution shall not disclose, other than to a consumer reporting agency,
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::(c) NONAPPLICABILITY TO LAW ENFORCEMENT AGENCIES.—No provision of this section shall be construed so as to prevent any action by a law enforcement agency, or any officer, employee, or agent of such agency, to obtain customer information of a financial institution in connection with the performance of the official duties of the agency.
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an account number or similar form of access number or access
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::{{SectionHarm|Section=(d) NONAPPLICABILITY TO FINANCIAL INSTITUTIONS IN CERTAIN CASES.—No provision of this section shall be construed so as to prevent any financial institution, or any officer, employee, or agent of a financial institution, from obtaining customer information of such financial institution in the course of—|Harms=Insecurity}}
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code for a credit card account, deposit account, or transaction
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:::(1) testing the security procedures or systems of such institution for maintaining the confidentiality of customer information;
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account of a consumer to any nonaffiliated third party for use
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:::(2) investigating allegations of misconduct or negligence on the part of any officer, employee, or agent of the financial institution; or
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in telemarketing, direct mail marketing, or other marketing through
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:::(3) recovering customer information of the financial institution which was obtained or received by another person in any manner described in subsection (a) or (b).
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electronic mail to the consumer.
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::(e) NONAPPLICABILITY TO INSURANCE INSTITUTIONS FOR INVESTIGATION OF INSURANCE FRAUD.—No provision of this section shall be construed so as to prevent any insurance institution, or any officer, employee, or agency of an insurance institution, from obtaining information as part of an insurance investigation into criminal activity, fraud, material misrepresentation, or material nondisclosure that is authorized for such institution under State law, regulation, interpretation, or order.
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(e) GENERAL EXCEPTIONS.—Subsections (a) and (b) shall not
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::(f) NONAPPLICABILITY TO CERTAIN TYPES OF CUSTOMER INFORMATION OF FINANCIAL INSTITUTIONS.—No provision of this section shall be construed so as to prevent any person from obtaining customer information of a financial institution that otherwise is available as a public record filed pursuant to the securities laws (as defined in section 3(a)(47) of the Securities Exchange Act of 1934).
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prohibit the disclosure of nonpublic personal information—
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::(g) NONAPPLICABILITY TO COLLECTION OF CHILD SUPPORT JUDGMENTS.—No provision of this section shall be construed to prevent any State-licensed private investigator, or any officer, employee, or agent of such private investigator, from obtaining customer information of a financial institution, to the extent reasonably necessary to collect child support from a person adjudged to have been delinquent in his or her obligations by a Federal or State court, and to the extent that such action by a State-licensed private investigator is not unlawful under any other Federal or State law or regulation, and has been authorized by an order or judgment of a court of competent jurisdiction.
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(1) as necessary to effect, administer, or enforce a transaction requested or authorized by the consumer, or in connection with—
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:{{SectionHarm|Section=SEC. 503. DISCLOSURE OF INSTITUTION PRIVACY POLICY.|Harms=Exclusion, Insecurity}}
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(A) servicing or processing a financial product or
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::(a) Disclosure Required.--At the time of establishing a customer  
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service requested or authorized by the consumer;
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relationship with a consumer and not less than annually during the  
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(B) maintaining or servicing the consumer’s account
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continuation of such relationship, a financial institution shall provide  
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with the financial institution, or with another entity as
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a clear and conspicuous disclosure to such consumer, in writing or in  
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part of a private label credit card program or other extension of credit on behalf of such entity; or
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electronic form or other form permitted by the regulations prescribed  
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(C) a proposed or actual securitization, secondary
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under section 504, of such financial institution's policies and  
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market sale (including sales of servicing rights), or similar
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practices with respect to--
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transaction related to a transaction of the consumer;
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:::(1) disclosing nonpublic personal information to affiliates and nonaffiliated third parties, consistent with section 502, including the categories of information that may be disclosed;
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(2) with the consent or at the direction of the consumer;
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:::(2) disclosing nonpublic personal information of persons who have ceased to be customers of the financial institution; and
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(3)(A) to protect the confidentiality or security of the financial institution’s records pertaining to the consumer, the service
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:::(3) protecting the nonpublic personal information of consumers.
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or product, or the transaction therein; (B) to protect against
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::Such disclosures shall be made in accordance with the regulations  
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or prevent actual or potential fraud, unauthorized transactions,
 
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claims, or other liability; (C) for required institutional risk
 
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control, or for resolving customer disputes or inquiries; (D)
 
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to persons holding a legal or beneficial interest relating to
 
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the consumer; or (E) to persons acting in a fiduciary or representative capacity on behalf of the consumer;
 
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(4) to provide information to insurance rate advisory
 
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organizations, guaranty funds or agencies, applicable rating
 
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agencies of the financial institution, persons assessing the
 
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institution’s compliance with industry standards, and the
 
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institution’s attorneys, accountants, and auditors;
 
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(5) to the extent specifically permitted or required under
 
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other provisions of law and in accordance with the Right to
 
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Financial Privacy Act of 1978, to law enforcement agencies
 
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(including a Federal functional regulator, the Secretary of the
 
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Treasury with respect to subchapter II of chapter 53 of title
 
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31, United States Code, and chapter 2 of title I of Public
 
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Law 91–508 (12 U.S.C. 1951–1959), a State insurance authority,
 
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or the Federal Trade Commission), self-regulatory organizations, or for an investigation on a matter related to public
 
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safety;
 
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(6)(A) to a consumer reporting agency in accordance with
 
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the Fair Credit Reporting Act, or (B) from a consumer report
 
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reported by a consumer reporting agency;
 
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(7) in connection with a proposed or actual sale, merger,
 
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transfer, or exchange of all or a portion of a business or operating unit if the disclosure of nonpublic personal information
 
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concerns solely consumers of such business or unit; or
 
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(8) to comply with Federal, State, or local laws, rules,
 
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and other applicable legal requirements; to comply with a properly authorized civil, criminal, or regulatory investigation or
 
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subpoena or summons by Federal, State, or local authorities;
 
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or to respond to judicial process or government regulatory authorities having jurisdiction over the financial institution
 
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for examination, compliance, or other purposes as authorized
 
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by law.
 
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SEC. 503. DISCLOSURE OF INSTITUTION PRIVACY POLICY.
 
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(a) DISCLOSURE REQUIRED.—At the time of establishing a customer relationship with a consumer and not less than annually
 
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during the continuation of such relationship, a financial institution
 
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shall provide a clear and conspicuous disclosure to such consumer,
 
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in writing or in electronic form or other form permitted by the
 
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regulations prescribed under section 504, of such financial institution’s policies and practices with respect to—
 
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(1) disclosing nonpublic personal information to affiliates
 
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and nonaffiliated third parties, consistent with section 502,
 
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including the categories of information that may be disclosed;
 
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(2) disclosing nonpublic personal information of persons
 
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who have ceased to be customers of the financial institution;
 
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and
 
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(3) protecting the nonpublic personal information of consumers.
 
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Such disclosures shall be made in accordance with the regulations
 
 
prescribed under section 504.
 
prescribed under section 504.
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(b) INFORMATION TO BE INCLUDED.—The disclosure required
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::(b) Information To Be Included.--The disclosure required by
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by subsection (a) shall include—
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subsection (a) shall include--
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(1) the policies and practices of the institution with respect
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:::(1) the policies and practices of the institution with respect to disclosing nonpublic personal information to nonaffiliated third parties, other than agents of the institution, consistent with section 502 of this subtitle, and including--
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to disclosing nonpublic personal information to nonaffiliated
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::::(A) the categories of persons to whom the information is or may be disclosed, other than the persons to whom the information may be provided pursuant to section 502(e); and
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third parties, other than agents of the institution, consistent
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::::(B) the policies and practices of the institution with respect to disclosing of nonpublic personal information of persons who have ceased to be customers of the financial institution;
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with section 502 of this subtitle, and including—
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:::(2) the categories of nonpublic personal information that are collected by the financial institution;
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(A) the categories of persons to whom the information
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:::(3) the policies that the institution maintains to protect the confidentiality and security of nonpublic personal information in accordance with section 501; and
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is or may be disclosed, other than the persons to whom
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:::(4) the disclosures required, if any, under section 603(d)(2)(A)(iii) of the Fair Credit Reporting Act.
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the information may be provided pursuant to section 502(e);
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:SEC. 504. RULEMAKING.
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and
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::(a) Regulatory Authority.--
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(B) the policies and practices of the institution with
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:::(1) Rulemaking.--The Federal banking agencies, the National Credit Union Administration, the Secretary of the Treasury, the Securities and Exchange Commission, and the Federal Trade Commission shall each prescribe, after consultation as appropriate with representatives of State insurance authorities designated by the National Association of Insurance Commissioners, such regulations as may be necessary to carry out the purposes of this subtitle with respect to the financial institutions subject to their jurisdiction under section 505.
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respect to disclosing of nonpublic personal information of
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:::(2) Coordination, consistency, and comparability.--Each of the agencies and authorities required under paragraph (1) to prescribe regulations shall consult and coordinate with the other such agencies and authorities for the purposes of assuring, to the extent possible, that the regulations prescribed by each such agency and authority are consistent and comparable with the regulations prescribed by the other such agencies and authorities.
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persons who have ceased to be customers of the financial
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:::(3) Procedures and deadline.--Such regulations shall be prescribed in accordance with applicable requirements of title 5, United States Code, and shall be issued in final form not later than 6 months after the date of the enactment of this Act.
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institution;
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::(b) Authority To Grant Exceptions.--The regulations prescribed under
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(2) the categories of nonpublic personal information that
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subsection (a) may include such additional exceptions to subsections (a)  
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are collected by the financial institution;
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through (d) of section 502 as are deemed consistent with the purposes of  
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(3) the policies that the institution maintains to protect
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this subtitle.
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the confidentiality and security of nonpublic personal information in accordance with section 501; and
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:SEC. 505. ENFORCEMENT.
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(4) the disclosures required, if any, under section
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::(a) In General.--This subtitle and the regulations prescribed
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603(d)(2)(A)(iii) of the Fair Credit Reporting Act.SEC. 506. PROTECTION OF FAIR CREDIT REPORTING ACT.
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thereunder shall be enforced by the Federal functional regulators, the
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(a) AMENDMENT.—Section 621 of the Fair Credit Reporting
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State insurance authorities, and the Federal Trade Commission with  
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Act (15 U.S.C. 1681s) is amended—
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respect to financial institutions and other persons subject to their
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(1) in subsection (d), by striking everything following the
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jurisdiction under applicable law, as follows:
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end of the second sentence; and
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:::(1) Under section 8 of the Federal Deposit Insurance Act, in the case of--
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(2) by striking subsection (e) and inserting the following:
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::::(A) national banks, Federal branches and Federal agencies of foreign banks, and any subsidiaries of such entities (except brokers, dealers, persons providing insurance, investment companies, and investment advisers), by the Office of the Comptroller of the Currency;
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‘‘(e) REGULATORY AUTHORITY.—
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::::(B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, organizations operating under section 25 or 25A of the Federal Reserve Act, and bank holding companies and their nonbank subsidiaries or affiliates (except brokers, dealers, persons providing insurance, investment companies, and investment advisers), by the Board of Governors of the Federal Reserve System;
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‘‘(1) The Federal banking agencies referred to in paragraphs
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::::(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), insured State branches of foreign banks, and any subsidiaries of such entities (except brokers, dealers, persons providing insurance, investment companies, and investment advisers), by the Board of Directors of the Federal Deposit Insurance Corporation; and
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(1) and (2) of subsection (b) shall jointly prescribe such regulations as necessary to carry out the purposes of this Act with
+
::::(D) savings associations the deposits of which are insured by the Federal Deposit Insurance Corporation, and any subsidiaries of such savings associations (except brokers, dealers, persons providing insurance, investment companies, and investment advisers), by the Director of the Office of Thrift Supervision.
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respect to any persons identified under paragraphs (1) and
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:::(2) Under the Federal Credit Union Act, by the Board of the National Credit Union Administration with respect to any federally insured credit union, and any subsidiaries of such an entity.
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(2) of subsection (b), and the Board of Governors of the Federal
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:::(3) Under the Securities Exchange Act of 1934, by the Securities and Exchange Commission with respect to any broker or dealer.
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Reserve System shall have authority to prescribe regulations
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:::(4) Under the Investment Company Act of 1940, by the Securities and Exchange Commission with respect to investment companies.
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consistent with such joint regulations with respect to bank holding companies and affiliates (other than depository institutions and consumer reporting agencies) of such holding companies.
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:::(5) Under the Investment Advisers Act of 1940, by the Securities and Exchange Commission with respect to investment advisers registered with the Commission under such Act.
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‘‘(2) The Board of the National Credit Union Administration
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:::(6) Under State insurance law, in the case of any person engaged in providing insurance, by the applicable State insurance authority of the State in which the person is domiciled, subject to section 104 of this Act.
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shall prescribe such regulations as necessary to carry out the
+
:::(7) Under the Federal Trade Commission Act, by the Federal Trade Commission for any other financial institution or other person that is not subject to the jurisdiction of any agency or authority under paragraphs (1) through (6) of this subsection.
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purposes of this Act with respect to any persons identified
+
::(b) Enforcement of Section 501.--
−
under paragraph (3) of subsection (b).’’.
+
:::(1) In general.--Except as provided in paragraph (2), the agencies and authorities described in subsection (a) shall implement the standards prescribed under section 501(b) in the same manner, to the extent practicable, as standards prescribed  pursuant to section 39(a) of the Federal Deposit Insurance Act are implemented pursuant to such section.
−
(b) CONFORMING AMENDMENT.—Section 621(a) of the Fair
+
:::(2) Exception.--The agencies and authorities described in paragraphs (3), (4), (5), (6), and (7) of subsection (a) shall implement the standards prescribed under section 501(b) by rule with respect to the financial institutions and other persons subject to their respective jurisdictions under subsection (a).
−
Credit Reporting Act (15 U.S.C. 1681s(a)) is amended by striking
+
::(c) Absence of State Action.--If a State insurance authority fails
−
paragraph (4).
+
to adopt regulations to carry out this subtitle, such State shall not be
−
(c) RELATION TO OTHER PROVISIONS.—Except for the amendments made by subsections (a) and (b), nothing in this title shall
+
eligible to override, pursuant to section 47(g)(2)(B)(iii) of the  
−
be construed to modify, limit, or supersede the operation of the
+
Federal Deposit Insurance Act, the insurance customer protection
−
Fair Credit Reporting Act, and no inference shall be drawn on
+
regulations prescribed by a Federal banking agency under section 47(a)
−
the basis of the provisions of this title regarding whether information is transaction or experience information under section 603
 
 
of such Act.
 
of such Act.
−
SEC. 507. RELATION TO STATE LAWS.
+
::(d) Definitions.--The terms used in subsection (a)(1) that are not
−
(a) IN GENERAL.—This subtitle and the amendments made by
+
defined in this subtitle or otherwise defined in section 3(s) of the
−
this subtitle shall not be construed as superseding, altering, or
+
Federal Deposit Insurance Act shall have the same meaning as given in
−
affecting any statute, regulation, order, or interpretation in effect
+
section 1(b) of the International Banking Act of 1978.
−
in any State, except to the extent that such statute, regulation,
+
:SEC. 506. PROTECTION OF FAIR CREDIT REPORTING ACT.
−
order, or interpretation is inconsistent with the provisions of this
+
::(a) Amendment.--Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended--
−
subtitle, and then only to the extent of the inconsistency.
+
:::(1) in subsection (d), by striking everything following the end of the second sentence; and
−
(b) GREATER PROTECTION UNDER STATE LAW.—For purposes
+
:::(2) by striking subsection (e) and inserting the following:
−
of this section, a State statute, regulation, order, or interpretation
+
:::: ``(e) Regulatory Authority.--
−
is not inconsistent with the provisions of this subtitle if the protection such statute, regulation, order, or interpretation affords any
+
::::: ``(1) The Federal banking agencies referred to in paragraphs (1) and (2) of subsection (b) shall jointly prescribe such regulations as necessary to carry out the purposes of this Act with respect to any persons identified under paragraphs (1) and (2) of subsection (b), and the Board of Governors of the Federal Reserve System shall have authority to prescribe regulations consistent with such joint regulations with respect to bank holding companies and affiliates (other than depository institutions and consumer reporting agencies) of such holding companies.
−
person is greater than the protection provided under this subtitle
+
::::::``(2) The Board of the National Credit Union Administration shall prescribe such regulations as necessary to carry out the purposes of this Act with respect to any persons identified under paragraph (3) of subsection (b).''.
−
and the amendments made by this subtitle, as determined by the
+
::(b) Conforming Amendment.--Section 621(a) of the Fair Credit
−
Federal Trade Commission, after consultation with the agency or
+
Reporting Act (15 U.S.C. 1681s(a)) is amended by striking paragraph (4).
−
authority with jurisdiction under section 505(a) of either the person
+
::(c) Relation <<NOTE: 15 USC 6806.>> to Other Provisions.--Except for
−
that initiated the complaint or that is the subject of the complaint,
+
the amendments made by subsections (a) and (b), nothing in this title
−
on its own motion or upon the petition of any interested party.SEC. 508. STUDY OF INFORMATION SHARING AMONG FINANCIAL
+
shall be construed to modify, limit, or supersede the operation of the
−
AFFILIATES.
+
Fair Credit Reporting Act, and no inference shall be drawn on the basis
−
(a) IN GENERAL.—The Secretary of the Treasury, in conjunction
+
of the provisions of this title regarding whether information is
−
with the Federal functional regulators and the Federal Trade
+
transaction or experience information under section 603 of such Act.
−
Commission, shall conduct a study of information sharing practices
+
:SEC. 507. RELATION TO STATE LAWS.
−
among financial institutions and their affiliates. Such study shall
+
::(a) In General.--This subtitle and the amendments made by this
−
include—
+
subtitle shall not be construed as superseding, altering, or affecting
−
(1) the purposes for the sharing of confidential customer
+
any statute, regulation, order, or interpretation in effect in any
−
information with affiliates or with nonaffiliated third parties;
+
State, except to the extent that such statute, regulation, order, or
−
(2) the extent and adequacy of security protections for
+
interpretation is inconsistent with the provisions of this subtitle, and
−
such information;
+
then only to the extent of the inconsistency.
−
(3) the potential risks for customer privacy of such sharing
+
::(b) Greater Protection Under State Law.--For purposes of this
−
of information;
+
section, a State statute, regulation, order, or interpretation is not
−
(4) the potential benefits for financial institutions and affiliates of such sharing of information;
+
inconsistent with the provisions of this subtitle if the protection such
−
(5) the potential benefits for customers of such sharing
+
statute, regulation, order, or interpretation affords any person is
−
of information;
+
greater than the protection provided under this subtitle and the
−
(6) the adequacy of existing laws to protect customer privacy;
+
amendments made by this subtitle, as determined by the Federal Trade
−
(7) the adequacy of financial institution privacy policy and
+
Commission, after consultation with the agency or authority with
−
privacy rights disclosure under existing law;(8) the feasibility of different approaches, including optout and opt-in, to permit customers to direct that confidential
+
jurisdiction under section 505(a) of either the person that initiated
−
information not be shared with affiliates and nonaffiliated third
+
the complaint or that is the subject of the complaint, on its own motion
−
parties; and
+
or upon the petition of any interested party.
−
(9) the feasibility of restricting sharing of information for
+
:SEC. 508. STUDY OF INFORMATION SHARING AMONG FINANCIAL AFFILIATES.
−
specific uses or of permitting customers to direct the uses
+
::(a) In General.--The Secretary of the Treasury, in conjunction with
−
for which information may be shared.
+
the Federal functional regulators and the Federal Trade Commission,  
−
(b) CONSULTATION.—The Secretary shall consult with representatives of State insurance authorities designated by the National
+
shall conduct a study of information sharing practices among financial  
−
Association of Insurance Commissioners, and also with financial
+
institutions and their affiliates. Such study shall include--
−
services industry, consumer organizations and privacy groups, and
+
:::(1) the purposes for the sharing of confidential customer information with affiliates or with nonaffiliated third parties;
−
other representatives of the general public, in formulating and
+
:::(2) the extent and adequacy of security protections for such information;
−
conducting the study required by subsection (a).
+
:::(3) the potential risks for customer privacy of such sharing of information;
−
(c) REPORT.—On or before January 1, 2002, the Secretary shall
+
:::(4) the potential benefits for financial institutions and affiliates of such sharing of information;
−
submit a report to the Congress containing the findings and conclusions of the study required under subsection (a), together with
+
:::(5) the potential benefits for customers of such sharing of information;
−
such recommendations for legislative or administrative action as
+
:::(6) the adequacy of existing laws to protect customer privacy;
−
may be appropriate.Subtitle B- SEC. 521. PRIVACY PROTECTION FOR CUSTOMER INFORMATION OF
+
:::(7) the adequacy of financial institution privacy policy and privacy rights disclosure under existing law;
−
FINANCIAL INSTITUTIONS.
+
:::(8) the feasibility of different approaches, including opt-out and opt-in, to permit customers to direct that confidential information not be shared with affiliates and nonaffiliated third parties; and
−
(a) PROHIBITION ON OBTAINING CUSTOMER INFORMATION BY
+
:::(9) the feasibility of restricting sharing of information for specific uses or of permitting customers to direct the uses for which information may be shared.
−
FALSE PRETENSES.—It shall be a violation of this subtitle for any
+
::(b) Consultation.--The Secretary shall consult with representatives
−
person to obtain or attempt to obtain, or cause to be disclosed
+
of State insurance authorities designated by the National Association of
−
or attempt to cause to be disclosed to any person, customer information of a financial institution relating to another person—
+
Insurance Commissioners, and also with financial services industry,
−
(1) by making a false, fictitious, or fraudulent statement
+
consumer organizations and privacy groups, and other representatives of
−
or representation to an officer, employee, or agent of a financial
+
the general public, in formulating and conducting the study required by
−
institution;
+
subsection (a).
−
(2) by making a false, fictitious, or fraudulent statement
+
::(c) Report.--On <<NOTE: Deadline.>> or before January 1, 2002, the
−
or representation to a customer of a financial institution; or
+
Secretary shall submit a report to the Congress containing the findings
−
(3) by providing any document to an officer, employee,
+
and conclusions of the study required under subsection (a), together
−
or agent of a financial institution, knowing that the document
+
with such recommendations for legislative or administrative action as
−
is forged, counterfeit, lost, or stolen, was fraudulently obtained,
+
may be appropriate.
−
or contains a false, fictitious, or fraudulent statement or representation.
+
:SEC. 509. DEFINITIONS.
−
(b) PROHIBITION ON SOLICITATION OF A PERSON TO OBTAIN
+
:As used in this subtitle:
−
CUSTOMER INFORMATION FROM FINANCIAL INSTITUTION UNDER
+
:::(1) Federal banking agency.--The term ``Federal banking agency'' has the same meaning as given in section 3 of the Federal Deposit Insurance Act.
−
FALSE PRETENSES.—It shall be a violation of this subtitle to request
+
:::(2) Federal functional regulator.--The term ``Federal functional regulator'' means--
−
a person to obtain customer information of a financial institution,
+
::::(A) the Board of Governors of the Federal Reserve System;
−
knowing that the person will obtain, or attempt to obtain, the
+
::::(B) the Office of the Comptroller of the Currency;
−
information from the institution in any manner described in subsection (a).
+
::::(C) the Board of Directors of the Federal Deposit Insurance Corporation;
−
(c) NONAPPLICABILITY TO LAW ENFORCEMENT AGENCIES.—No
+
::::(D) the Director of the Office of Thrift Supervision;
−
provision of this section shall be construed so as to prevent any
+
::::(E) the National Credit Union Administration Board; and
−
action by a law enforcement agency, or any officer, employee, or
+
::::(F) the Securities and Exchange Commission.
−
agent of such agency, to obtain customer information of a financial
+
:::(3) Financial institution.--
−
institution in connection with the performance of the official duties
+
::::(A) In general.--The term ``financial institution'' means any institution the business of which is engaging in financial activities as described in section 4(k) of the Bank Holding Company Act of 1956.
−
of the agency.
+
::::(B) Persons subject to cftc regulation.-- Notwithstanding subparagraph (A), the term ``financial institution'' does not include any person or entity with respect to any financial activity that is subject to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act.
−
(d) NONAPPLICABILITY TO FINANCIAL INSTITUTIONS IN CERTAIN
+
::::(C) Farm credit institutions.--Notwithstanding subparagraph (A), the term ``financial institution'' does not include the Federal Agricultural Mortgage Corporation or any entity chartered and operating under the Farm Credit Act of 1971.
−
CASES.—No provision of this section shall be construed so as to
+
::::(D) Other secondary market institutions.--Notwithstanding subparagraph (A), the term ``financial institution'' does not include institutions chartered by Congress specifically to engage in transactions described in section 502(e)(1)(C), as long as such institutions do not sell or transfer nonpublic personal information to a nonaffiliated third party.
−
prevent any financial institution, or any officer, employee, or agent
+
:::(4) Nonpublic personal information.--
−
of a financial institution, from obtaining customer information of
+
::::(A) The term ``nonpublic personal information'' means personally identifiable financial information--
−
such financial institution in the course of—
+
:::::(i) provided by a consumer to a financial institution;
−
(1) testing the security procedures or systems of such
+
:::::(ii) resulting from any transaction with the consumer or any service performed for the consumer; or
−
institution for maintaining the confidentiality of customer
+
:::::(iii) otherwise obtained by the financial institution.
−
information;
+
:::(B) Such term does not include publicly available information, as such term is defined by the regulations prescribed under section 504.
−
(2) investigating allegations of misconduct or negligence
+
:::(C) Notwithstanding subparagraph (B), such term--
−
on the part of any officer, employee, or agent of the financial
+
:::::(i) shall include any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived using any nonpublic personal information other than publicly available information; but
−
institution; or
+
:::::(ii) shall not include any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived without using any nonpublic personal information.
−
(3) recovering customer information of the financial institution which was obtained or received by another person in any
+
:::(5) Nonaffiliated third party.--The term ``nonaffiliated third party'' means any entity that is not an affiliate of, or related by common ownership or affiliated by corporate control with, the financial institution, but does not include a joint employee of such institution.
−
manner described in subsection (a) or (b).
+
:::(6) Affiliate.--The term ``affiliate'' means any company that controls, is controlled by, or is under common control with another company.
−
(e) NONAPPLICABILITY TO INSURANCE INSTITUTIONS FOR INVESTIGATION OF INSURANCE FRAUD.—No provision of this section shall
+
:::(7) Necessary to effect, administer, or enforce.--The term ``as necessary to effect, administer, or enforce the transaction'' means--
−
be construed so as to prevent any insurance institution, or any
+
::::(A) the disclosure is required, or is a usual, appropriate, or acceptable method, to carry out the transaction or the product or service business of which the transaction is a part, and record or service or maintain the consumer's account in the ordinary course of providing the financial service or financial product, or to administer or service benefits or claims relating to the transaction or the product or service business of which it is a part, and includes--
−
officer, employee, or agency of an insurance institution, from
+
:::::(i) providing the consumer or the consumer's agent or broker with a confirmation, statement, or other record of the transaction, or information on the status or value of the financial service or financial product; and
−
obtaining information as part of an insurance investigation into
+
:::::(ii) the accrual or recognition of incentives or bonuses associated with the transaction that are provided by the financial institution or any other party;
−
criminal activity, fraud, material misrepresentation, or material
+
::::(B) the disclosure is required, or is one of the lawful or appropriate methods, to enforce the rights of the financial institution or of other persons engaged in carrying out the financial transaction, or providing the product or service;
−
nondisclosure that is authorized for such institution under State
+
::::(C) the disclosure is required, or is a usual, appropriate, or acceptable method, for insurance underwriting at the consumer's request or for reinsurance purposes, or for any of the following purposes as they relate to a consumer's insurance: Account administration, reporting, investigating, or preventing fraud or material misrepresentation, processing premium payments, processing insurance claims, administering insurance benefits (including utilization review activities), participating in research projects, or as otherwise required or specifically permitted by Federal or State law; or
−
law, regulation, interpretation, or order.(f) NONAPPLICABILITY TO CERTAIN TYPES OF CUSTOMER
+
::::(D) the disclosure is required, or is a usual, appropriate or acceptable method, in connection with--
−
INFORMATION OF FINANCIAL INSTITUTIONS.—No provision of this
+
:::::(i) the authorization, settlement, billing, processing, clearing, transferring, reconciling, or collection of amounts charged, debited, or otherwise paid using a debit, credit or other payment card, check, or account number, or by other payment means;
−
section shall be construed so as to prevent any person from
+
:::::(ii) the transfer of receivables, accounts or interests therein; or
−
obtaining customer information of a financial institution that otherwise is available as a public record filed pursuant to the securities
+
:::::(iii) the audit of debit, credit or other payment information.
−
laws (as defined in section 3(a)(47) of the Securities Exchange
+
:::(8) State insurance authority.--The term ``State insurance authority'' means, in the case of any person engaged in providing insurance, the State insurance authority of the State in which the person is domiciled.
−
Act of 1934).
+
:::(9) Consumer.--The term ``consumer'' means an individual who obtains, from a financial institution, financial products or services which are to be used primarily for personal, family, or household purposes, and also means the legal representative of such an individual.
−
(g) NONAPPLICABILITY TO COLLECTION OF CHILD SUPPORT JUDGMENTS.—No provision of this section shall be construed to prevent
+
:::(10) Joint agreement.--The term ``joint agreement'' means a formal written contract pursuant to which two or more financial institutions jointly offer, endorse, or sponsor a financial product or service, and as may be further defined in the regulations prescribed under section 504.
−
any State-licensed private investigator, or any officer, employee,
+
:::(11) Customer <<NOTE: Regulations.>> relationship.--The term ``time of establishing a customer relationship'' shall be defined by the regulations prescribed under section 504, and shall, in the case of a financial institution engaged in extending credit directly to consumers to finance purchases of goods or services, mean the time of establishing the credit relationship with the consumer.
−
or agent of such private investigator, from obtaining customer
+
:SEC. 510. EFFECTIVE DATE.
−
information of a financial institution, to the extent reasonably necessary to collect child support from a person adjudged to have
+
::This subtitle shall take effect 6 months after the date on which
−
been delinquent in his or her obligations by a Federal or State
+
rules are required to be prescribed under section 504(a)(3), except--
−
court, and to the extent that such action by a State-licensed private
+
:::(1) to the extent that a later date is specified in the rules prescribed under section 504; and
−
investigator is not unlawful under any other Federal or State law
+
:::(2) that sections 504 and 506 shall be effective upon
−
or regulation, and has been authorized by an order or judgment
+
enactment.
−
of a court of competent jurisdiction.SEC. 522. ADMINISTRATIVE ENFORCEMENT.
+
:SEC. 521. PRIVACY PROTECTION FOR CUSTOMER INFORMATION OF FINANCIAL INSTITUTIONS.
−
(a) ENFORCEMENT BY FEDERAL TRADE COMMISSION.—Except
+
::(a) Prohibition on Obtaining Customer Information by False
−
as provided in subsection (b), compliance with this subtitle shall
+
Pretenses.--It shall be a violation of this subtitle for any person to
−
be enforced by the Federal Trade Commission in the same manner
+
obtain or attempt to obtain, or cause to be disclosed or attempt to
−
and with the same power and authority as the Commission has
+
cause to be disclosed to any person, customer information of a financial
−
under the Fair Debt Collection Practices Act to enforce compliance
+
institution relating to another person--
−
with such Act.
+
:::(1) by making a false, fictitious, or fraudulent statement or representation to an officer, employee, or agent of a financial institution;
−
(b) ENFORCEMENT BY OTHER AGENCIES IN CERTAIN CASES.—
+
:::(2) by making a false, fictitious, or fraudulent statement or representation to a customer of a financial institution; or
−
(1) IN GENERAL.—Compliance with this subtitle shall be
+
:::(3) by providing any document to an officer, employee, or agent of a financial institution, knowing that the document is forged, counterfeit, lost, or stolen, was fraudulently obtained, or contains a false, fictitious, or fraudulent statement or representation.
−
enforced under—
+
::(b) Prohibition on Solicitation of a Person To Obtain Customer
−
(A) section 8 of the Federal Deposit Insurance Act,
+
Information From Financial Institution Under False Pretenses.--It shall
−
in the case of—
+
be a violation of this subtitle to request a person to obtain customer
−
(i) national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the
+
information of a financial institution, knowing that the person will
−
Comptroller of the Currency;
+
obtain, or attempt to obtain, the information from the institution in
−
(ii) member banks of the Federal Reserve System
+
any manner described in subsection (a).
−
(other than national banks), branches and agencies
+
::(c) Nonapplicability to Law Enforcement Agencies.--No provision of
−
of foreign banks (other than Federal branches, Federal
+
this section shall be construed so as to prevent any action by a law
−
agencies, and insured State branches of foreign banks),
+
enforcement agency, or any officer, employee, or agent of such agency,
−
commercial lending companies owned or controlled by
+
to obtain customer information of a financial institution in connection
−
foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act, by the
+
with the performance of the official duties of the agency.
−
Board;
+
::(d) Nonapplicability to Financial Institutions in Certain Cases.--No
−
(iii) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal
+
provision of this section shall be construed so as to prevent any
−
Reserve System and national nonmember banks) and
+
financial institution, or any officer, employee, or agent of a financial
−
insured State branches of foreign banks, by the Board
+
institution, from obtaining customer information of such financial
−
of Directors of the Federal Deposit Insurance Corporation; and
+
institution in the course of--
−
(iv) savings associations the deposits of which are
+
:::(1) testing the security procedures or systems of such institution for maintaining the confidentiality of customer information;
−
insured by the Federal Deposit Insurance Corporation,
+
:::(2) investigating allegations of misconduct or negligence on the part of any officer, employee, or agent of the financial institution; or
−
by the Director of the Office of Thrift Supervision;
+
:::(3) recovering customer information of the financial institution which was obtained or received by another person in any manner described in subsection (a) or (b).
−
and
+
::(e) Nonapplicability to Insurance Institutions for Investigation of
−
(B) the Federal Credit Union Act, by the Administrator
+
Insurance Fraud.--No provision of this section shall be construed so as
−
of the National Credit Union Administration with respect
+
to prevent any insurance institution, or any officer, employee, or
−
to any Federal credit union.
+
agency of an insurance institution, from obtaining information as part
−
(2) VIOLATIONS OF THIS SUBTITLE TREATED AS VIOLATIONS
+
of an insurance investigation into criminal activity, fraud, material
−
OF OTHER LAWS.—For the purpose of the exercise by any agency referred to in paragraph (1) of its powers under any Act referred
+
misrepresentation, or material nondisclosure that is authorized for such
−
to in that paragraph, a violation of this subtitle shall be deemed
+
institution under State law, regulation, interpretation, or order.
−
to be a violation of a requirement imposed under that Act.
+
::(f) Nonapplicability to Certain Types of Customer Information of
−
In addition to its powers under any provision of law specifically
+
Financial Institutions.--No provision of this section shall be construed
−
referred to in paragraph (1), each of the agencies referred
+
so as to prevent any person from obtaining customer information of a
−
to in that paragraph may exercise, for the purpose of enforcing
+
financial institution that otherwise is available as a public record
−
compliance with this subtitle, any other authority conferred
+
filed pursuant to the securities laws (as defined in section 3(a)(47) of
−
on such agency by law.SEC. 524. RELATION TO STATE LAWS.
+
the Securities Exchange Act of 1934).
−
(a) IN GENERAL.—This subtitle shall not be construed as superseding, altering, or affecting the statutes, regulations, orders, or
+
::(g) Nonapplicability to Collection of Child Support Judgments.--No
−
interpretations in effect in any State, except to the extent that
+
provision of this section shall be construed to prevent any State-
−
such statutes, regulations, orders, or interpretations are inconsistent with the provisions of this subtitle, and then only to the
+
licensed private investigator, or any officer, employee, or agent of
−
extent of the inconsistency.
+
such private investigator, from obtaining customer information of a
−
(b) GREATER PROTECTION UNDER STATE LAW.—For purposes
+
financial institution, to the extent reasonably necessary to collect
−
of this section, a State statute, regulation, order, or interpretation
+
child support from a person adjudged to have been delinquent in his or
−
is not inconsistent with the provisions of this subtitle if the protection such statute, regulation, order, or interpretation affords any
+
her obligations by a Federal or State court, and to the extent that such
−
person is greater than the protection provided under this subtitle
+
action by a State-licensed private investigator is not unlawful under
−
as determined by the Federal Trade Commission, after consultation
+
any other Federal or State law or regulation, and has been authorized by
−
with the agency or authority with jurisdiction under section 522
+
an order or judgment of a court of competent jurisdiction.
−
of either the person that initiated the complaint or that is the
+
|Categories of personal information covered=Account, Transactional, Authenticating
−
subject of the complaint, on its own motion or upon the petition
+
}}
−
of any interested party.
 
−
SEC. 525. AGENCY GUIDANCE.
 
−
In furtherance of the objectives of this subtitle, each Federal
 
−
banking agency (as defined in section 3(z) of the Federal Deposit
 
−
Insurance Act), the National Credit Union Administration, and
 
−
the Securities and Exchange Commission or self-regulatory
 
−
organizations, as appropriate, shall review regulations and guidelines applicable to financial institutions under their respective jurisdictions and shall prescribe such revisions to such regulations and
 
−
guidelines as may be necessary to ensure that such financial institutions have policies, procedures, and controls in place to prevent
 
−
the unauthorized disclosure of customer financial information and
 
−
to deter and detect activities proscribed under section 521.
 
−
 
 
−
'''Related harms under the Solove Taxonomy:'''
 
−
 
 
−
'''Scope of Law''' ''Financial Institution''
 

Latest revision as of 00:44, 27 October 2020

Gramm Leach Bliley Act
Short Title Gramm–Leach–Bliley Act (GLBA)
Official Text Gramm Leach Bliley Act
Country/Jurisdiction United States
State or Province
Regulatory Bodies FTC
Date Enacted 1999/11/12
Scope of the Law Financial Institutions
Information
Taxonomy Breach of Confidentiality, Disclosure, Distortion, Exclusion, Insecurity
Strategies
Template:Ad
Template:United StatesAd

The Gramm–Leach–Bliley Act (GLBA) provides customers to have secured information by financial institutions. The Act also prevents financial institutions from disclosing individuals' nonpublic personal information which is confidential. However, individuals have the right to choose whether the information is disclosed under the Act.

Text of the law

SEC. 501. PROTECTION OF NONPUBLIC PERSONAL INFORMATION. Insecurity, Breach of Confidentiality
(a) Privacy Obligation Policy.--It is the policy of the Congress

that each financial institution has an affirmative and continuing obligation to respect the privacy of its customers and to protect the security and confidentiality of those customers' nonpublic personal information.

(b) Financial Institutions Safeguards.--In furtherance of the policy

in subsection (a), each agency or authority described in section 505(a) shall establish appropriate standards for the financial institutions subject to their jurisdiction relating to administrative, technical, and physical safeguards--

(1) to insure the security and confidentiality of customer records and information; Account, Identifying

"Personal#list" contains a listed "#" character as part of the property label and has therefore been classified as invalid.

(2) to protect against any anticipated threats or hazards to the security or integrity of such records; and
(3) to protect against unauthorized access to or use of such records or information which could result in substantial harm or inconvenience to any customer.
SEC. 502. OBLIGATIONS WITH RESPECT TO DISCLOSURES OF PERSONAL INFORMATION.
(a) NOTICE REQUIREMENTS.—Except as otherwise provided in this subtitle, a financial institution may not, directly or through any affiliate, disclose to a nonaffiliated third party any nonpublic personal information, unless such financial institution provides or has provided to the consumer a notice that complies with section 503. Exclusion, Disclosure
(b) OPT OUT.— Exclusion, Disclosure
(1) IN GENERAL.—A financial institution may not disclose nonpublic personal information to a nonaffiliated third party unless—
(A) such financial institution clearly and conspicuously discloses to the consumer, in writing or in electronic form or other form permitted by the regulations prescribed under section 504, that such information may be disclosed to such third party;
(B) the consumer is given the opportunity, before the time that such information is initially disclosed, to direct that such information not be disclosed to such third party; and
(C) the consumer is given an explanation of how the consumer can exercise that nondisclosure option. Exclusion
SEC. 508. STUDY OF INFORMATION SHARING AMONG FINANCIAL AFFILIATES.
(a) IN GENERAL.—The Secretary of the Treasury, in conjunction with the Federal functional regulators and the Federal Trade Commission, shall conduct a study of information sharing practices among financial institutions and their affiliates. Such study shall include— Insecurity
(1) the purposes for the sharing of confidential customer information with affiliates or with nonaffiliated third parties;
(2) the extent and adequacy of security protections for such information;
(3) the potential risks for customer privacy of such sharing of information;
(4) the potential benefits for financial institutions and affiliates of such sharing of information;
(5) the potential benefits for customers of such sharing of information;
(6) the adequacy of existing laws to protect customer privacy;
(7) the adequacy of financial institution privacy policy and privacy rights disclosure under existing law;
(8) the feasibility of different approaches, including optout and opt-in, to permit customers to direct that confidential information not be shared with affiliates and nonaffiliated third parties; and
(9) the feasibility of restricting sharing of information for specific uses or of permitting customers to direct the uses for which information may be shared.
SEC. 521. PRIVACY PROTECTION FOR CUSTOMER INFORMATION OF FINANCIAL INSTITUTIONS. Disclosure, Distortion
(a) PROHIBITION ON OBTAINING CUSTOMER INFORMATION BY FALSE PRETENSES.—It shall be a violation of this subtitle for any person to obtain or attempt to obtain, or cause to be disclosed or attempt to cause to be disclosed to any person, customer information of a financial institution relating to another person—
(1) by making a false, fictitious, or fraudulent statement or representation to an officer, employee, or agent of a financial institution;
(2) by making a false, fictitious, or fraudulent statement or representation to a customer of a financial institution; or
(3) by providing any document to an officer, employee, or agent of a financial institution, knowing that the document is forged, counterfeit, lost, or stolen, was fraudulently obtained, or contains a false, fictitious, or fraudulent statement or representation.
(b) PROHIBITION ON SOLICITATION OF A PERSON TO OBTAIN CUSTOMER INFORMATION FROM FINANCIAL INSTITUTION UNDER FALSE PRETENSES.—It shall be a violation of this subtitle to request a person to obtain customer information of a financial institution, knowing that the person will obtain, or attempt to obtain, the information from the institution in any manner described in subsection (a). Account, Transactional

"Personal#list" contains a listed "#" character as part of the property label and has therefore been classified as invalid.

(c) NONAPPLICABILITY TO LAW ENFORCEMENT AGENCIES.—No provision of this section shall be construed so as to prevent any action by a law enforcement agency, or any officer, employee, or agent of such agency, to obtain customer information of a financial institution in connection with the performance of the official duties of the agency.
(d) NONAPPLICABILITY TO FINANCIAL INSTITUTIONS IN CERTAIN CASES.—No provision of this section shall be construed so as to prevent any financial institution, or any officer, employee, or agent of a financial institution, from obtaining customer information of such financial institution in the course of— Insecurity
(1) testing the security procedures or systems of such institution for maintaining the confidentiality of customer information;
(2) investigating allegations of misconduct or negligence on the part of any officer, employee, or agent of the financial institution; or
(3) recovering customer information of the financial institution which was obtained or received by another person in any manner described in subsection (a) or (b).
(e) NONAPPLICABILITY TO INSURANCE INSTITUTIONS FOR INVESTIGATION OF INSURANCE FRAUD.—No provision of this section shall be construed so as to prevent any insurance institution, or any officer, employee, or agency of an insurance institution, from obtaining information as part of an insurance investigation into criminal activity, fraud, material misrepresentation, or material nondisclosure that is authorized for such institution under State law, regulation, interpretation, or order.
(f) NONAPPLICABILITY TO CERTAIN TYPES OF CUSTOMER INFORMATION OF FINANCIAL INSTITUTIONS.—No provision of this section shall be construed so as to prevent any person from obtaining customer information of a financial institution that otherwise is available as a public record filed pursuant to the securities laws (as defined in section 3(a)(47) of the Securities Exchange Act of 1934).
(g) NONAPPLICABILITY TO COLLECTION OF CHILD SUPPORT JUDGMENTS.—No provision of this section shall be construed to prevent any State-licensed private investigator, or any officer, employee, or agent of such private investigator, from obtaining customer information of a financial institution, to the extent reasonably necessary to collect child support from a person adjudged to have been delinquent in his or her obligations by a Federal or State court, and to the extent that such action by a State-licensed private investigator is not unlawful under any other Federal or State law or regulation, and has been authorized by an order or judgment of a court of competent jurisdiction.
SEC. 503. DISCLOSURE OF INSTITUTION PRIVACY POLICY. Exclusion, Insecurity
(a) Disclosure Required.--At the time of establishing a customer

relationship with a consumer and not less than annually during the continuation of such relationship, a financial institution shall provide a clear and conspicuous disclosure to such consumer, in writing or in electronic form or other form permitted by the regulations prescribed under section 504, of such financial institution's policies and practices with respect to--

(1) disclosing nonpublic personal information to affiliates and nonaffiliated third parties, consistent with section 502, including the categories of information that may be disclosed;
(2) disclosing nonpublic personal information of persons who have ceased to be customers of the financial institution; and
(3) protecting the nonpublic personal information of consumers.
Such disclosures shall be made in accordance with the regulations

prescribed under section 504.

(b) Information To Be Included.--The disclosure required by

subsection (a) shall include--

(1) the policies and practices of the institution with respect to disclosing nonpublic personal information to nonaffiliated third parties, other than agents of the institution, consistent with section 502 of this subtitle, and including--
(A) the categories of persons to whom the information is or may be disclosed, other than the persons to whom the information may be provided pursuant to section 502(e); and
(B) the policies and practices of the institution with respect to disclosing of nonpublic personal information of persons who have ceased to be customers of the financial institution;
(2) the categories of nonpublic personal information that are collected by the financial institution;
(3) the policies that the institution maintains to protect the confidentiality and security of nonpublic personal information in accordance with section 501; and
(4) the disclosures required, if any, under section 603(d)(2)(A)(iii) of the Fair Credit Reporting Act.
SEC. 504. RULEMAKING.
(a) Regulatory Authority.--
(1) Rulemaking.--The Federal banking agencies, the National Credit Union Administration, the Secretary of the Treasury, the Securities and Exchange Commission, and the Federal Trade Commission shall each prescribe, after consultation as appropriate with representatives of State insurance authorities designated by the National Association of Insurance Commissioners, such regulations as may be necessary to carry out the purposes of this subtitle with respect to the financial institutions subject to their jurisdiction under section 505.
(2) Coordination, consistency, and comparability.--Each of the agencies and authorities required under paragraph (1) to prescribe regulations shall consult and coordinate with the other such agencies and authorities for the purposes of assuring, to the extent possible, that the regulations prescribed by each such agency and authority are consistent and comparable with the regulations prescribed by the other such agencies and authorities.
(3) Procedures and deadline.--Such regulations shall be prescribed in accordance with applicable requirements of title 5, United States Code, and shall be issued in final form not later than 6 months after the date of the enactment of this Act.
(b) Authority To Grant Exceptions.--The regulations prescribed under

subsection (a) may include such additional exceptions to subsections (a) through (d) of section 502 as are deemed consistent with the purposes of this subtitle.

SEC. 505. ENFORCEMENT.
(a) In General.--This subtitle and the regulations prescribed

thereunder shall be enforced by the Federal functional regulators, the State insurance authorities, and the Federal Trade Commission with respect to financial institutions and other persons subject to their jurisdiction under applicable law, as follows:

(1) Under section 8 of the Federal Deposit Insurance Act, in the case of--
(A) national banks, Federal branches and Federal agencies of foreign banks, and any subsidiaries of such entities (except brokers, dealers, persons providing insurance, investment companies, and investment advisers), by the Office of the Comptroller of the Currency;
(B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, organizations operating under section 25 or 25A of the Federal Reserve Act, and bank holding companies and their nonbank subsidiaries or affiliates (except brokers, dealers, persons providing insurance, investment companies, and investment advisers), by the Board of Governors of the Federal Reserve System;
(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), insured State branches of foreign banks, and any subsidiaries of such entities (except brokers, dealers, persons providing insurance, investment companies, and investment advisers), by the Board of Directors of the Federal Deposit Insurance Corporation; and
(D) savings associations the deposits of which are insured by the Federal Deposit Insurance Corporation, and any subsidiaries of such savings associations (except brokers, dealers, persons providing insurance, investment companies, and investment advisers), by the Director of the Office of Thrift Supervision.
(2) Under the Federal Credit Union Act, by the Board of the National Credit Union Administration with respect to any federally insured credit union, and any subsidiaries of such an entity.
(3) Under the Securities Exchange Act of 1934, by the Securities and Exchange Commission with respect to any broker or dealer.
(4) Under the Investment Company Act of 1940, by the Securities and Exchange Commission with respect to investment companies.
(5) Under the Investment Advisers Act of 1940, by the Securities and Exchange Commission with respect to investment advisers registered with the Commission under such Act.
(6) Under State insurance law, in the case of any person engaged in providing insurance, by the applicable State insurance authority of the State in which the person is domiciled, subject to section 104 of this Act.
(7) Under the Federal Trade Commission Act, by the Federal Trade Commission for any other financial institution or other person that is not subject to the jurisdiction of any agency or authority under paragraphs (1) through (6) of this subsection.
(b) Enforcement of Section 501.--
(1) In general.--Except as provided in paragraph (2), the agencies and authorities described in subsection (a) shall implement the standards prescribed under section 501(b) in the same manner, to the extent practicable, as standards prescribed pursuant to section 39(a) of the Federal Deposit Insurance Act are implemented pursuant to such section.
(2) Exception.--The agencies and authorities described in paragraphs (3), (4), (5), (6), and (7) of subsection (a) shall implement the standards prescribed under section 501(b) by rule with respect to the financial institutions and other persons subject to their respective jurisdictions under subsection (a).
(c) Absence of State Action.--If a State insurance authority fails

to adopt regulations to carry out this subtitle, such State shall not be eligible to override, pursuant to section 47(g)(2)(B)(iii) of the Federal Deposit Insurance Act, the insurance customer protection regulations prescribed by a Federal banking agency under section 47(a) of such Act.

(d) Definitions.--The terms used in subsection (a)(1) that are not

defined in this subtitle or otherwise defined in section 3(s) of the Federal Deposit Insurance Act shall have the same meaning as given in section 1(b) of the International Banking Act of 1978.

SEC. 506. PROTECTION OF FAIR CREDIT REPORTING ACT.
(a) Amendment.--Section 621 of the Fair Credit Reporting Act (15 U.S.C. 1681s) is amended--
(1) in subsection (d), by striking everything following the end of the second sentence; and
(2) by striking subsection (e) and inserting the following:
``(e) Regulatory Authority.--
``(1) The Federal banking agencies referred to in paragraphs (1) and (2) of subsection (b) shall jointly prescribe such regulations as necessary to carry out the purposes of this Act with respect to any persons identified under paragraphs (1) and (2) of subsection (b), and the Board of Governors of the Federal Reserve System shall have authority to prescribe regulations consistent with such joint regulations with respect to bank holding companies and affiliates (other than depository institutions and consumer reporting agencies) of such holding companies.
``(2) The Board of the National Credit Union Administration shall prescribe such regulations as necessary to carry out the purposes of this Act with respect to any persons identified under paragraph (3) of subsection (b)..
(b) Conforming Amendment.--Section 621(a) of the Fair Credit

Reporting Act (15 U.S.C. 1681s(a)) is amended by striking paragraph (4).

(c) Relation <<NOTE: 15 USC 6806.>> to Other Provisions.--Except for

the amendments made by subsections (a) and (b), nothing in this title shall be construed to modify, limit, or supersede the operation of the Fair Credit Reporting Act, and no inference shall be drawn on the basis of the provisions of this title regarding whether information is transaction or experience information under section 603 of such Act.

SEC. 507. RELATION TO STATE LAWS.
(a) In General.--This subtitle and the amendments made by this

subtitle shall not be construed as superseding, altering, or affecting any statute, regulation, order, or interpretation in effect in any State, except to the extent that such statute, regulation, order, or interpretation is inconsistent with the provisions of this subtitle, and then only to the extent of the inconsistency.

(b) Greater Protection Under State Law.--For purposes of this

section, a State statute, regulation, order, or interpretation is not inconsistent with the provisions of this subtitle if the protection such statute, regulation, order, or interpretation affords any person is greater than the protection provided under this subtitle and the amendments made by this subtitle, as determined by the Federal Trade Commission, after consultation with the agency or authority with jurisdiction under section 505(a) of either the person that initiated the complaint or that is the subject of the complaint, on its own motion or upon the petition of any interested party.

SEC. 508. STUDY OF INFORMATION SHARING AMONG FINANCIAL AFFILIATES.
(a) In General.--The Secretary of the Treasury, in conjunction with

the Federal functional regulators and the Federal Trade Commission, shall conduct a study of information sharing practices among financial institutions and their affiliates. Such study shall include--

(1) the purposes for the sharing of confidential customer information with affiliates or with nonaffiliated third parties;
(2) the extent and adequacy of security protections for such information;
(3) the potential risks for customer privacy of such sharing of information;
(4) the potential benefits for financial institutions and affiliates of such sharing of information;
(5) the potential benefits for customers of such sharing of information;
(6) the adequacy of existing laws to protect customer privacy;
(7) the adequacy of financial institution privacy policy and privacy rights disclosure under existing law;
(8) the feasibility of different approaches, including opt-out and opt-in, to permit customers to direct that confidential information not be shared with affiliates and nonaffiliated third parties; and
(9) the feasibility of restricting sharing of information for specific uses or of permitting customers to direct the uses for which information may be shared.
(b) Consultation.--The Secretary shall consult with representatives

of State insurance authorities designated by the National Association of Insurance Commissioners, and also with financial services industry, consumer organizations and privacy groups, and other representatives of the general public, in formulating and conducting the study required by subsection (a).

(c) Report.--On <<NOTE: Deadline.>> or before January 1, 2002, the

Secretary shall submit a report to the Congress containing the findings and conclusions of the study required under subsection (a), together with such recommendations for legislative or administrative action as may be appropriate.

SEC. 509. DEFINITIONS.
As used in this subtitle:
(1) Federal banking agency.--The term ``Federal banking agency has the same meaning as given in section 3 of the Federal Deposit Insurance Act.
(2) Federal functional regulator.--The term ``Federal functional regulator means--
(A) the Board of Governors of the Federal Reserve System;
(B) the Office of the Comptroller of the Currency;
(C) the Board of Directors of the Federal Deposit Insurance Corporation;
(D) the Director of the Office of Thrift Supervision;
(E) the National Credit Union Administration Board; and
(F) the Securities and Exchange Commission.
(3) Financial institution.--
(A) In general.--The term ``financial institution means any institution the business of which is engaging in financial activities as described in section 4(k) of the Bank Holding Company Act of 1956.
(B) Persons subject to cftc regulation.-- Notwithstanding subparagraph (A), the term ``financial institution does not include any person or entity with respect to any financial activity that is subject to the jurisdiction of the Commodity Futures Trading Commission under the Commodity Exchange Act.
(C) Farm credit institutions.--Notwithstanding subparagraph (A), the term ``financial institution does not include the Federal Agricultural Mortgage Corporation or any entity chartered and operating under the Farm Credit Act of 1971.
(D) Other secondary market institutions.--Notwithstanding subparagraph (A), the term ``financial institution does not include institutions chartered by Congress specifically to engage in transactions described in section 502(e)(1)(C), as long as such institutions do not sell or transfer nonpublic personal information to a nonaffiliated third party.
(4) Nonpublic personal information.--
(A) The term ``nonpublic personal information means personally identifiable financial information--
(i) provided by a consumer to a financial institution;
(ii) resulting from any transaction with the consumer or any service performed for the consumer; or
(iii) otherwise obtained by the financial institution.
(B) Such term does not include publicly available information, as such term is defined by the regulations prescribed under section 504.
(C) Notwithstanding subparagraph (B), such term--
(i) shall include any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived using any nonpublic personal information other than publicly available information; but
(ii) shall not include any list, description, or other grouping of consumers (and publicly available information pertaining to them) that is derived without using any nonpublic personal information.
(5) Nonaffiliated third party.--The term ``nonaffiliated third party means any entity that is not an affiliate of, or related by common ownership or affiliated by corporate control with, the financial institution, but does not include a joint employee of such institution.
(6) Affiliate.--The term ``affiliate means any company that controls, is controlled by, or is under common control with another company.
(7) Necessary to effect, administer, or enforce.--The term ``as necessary to effect, administer, or enforce the transaction means--
(A) the disclosure is required, or is a usual, appropriate, or acceptable method, to carry out the transaction or the product or service business of which the transaction is a part, and record or service or maintain the consumer's account in the ordinary course of providing the financial service or financial product, or to administer or service benefits or claims relating to the transaction or the product or service business of which it is a part, and includes--
(i) providing the consumer or the consumer's agent or broker with a confirmation, statement, or other record of the transaction, or information on the status or value of the financial service or financial product; and
(ii) the accrual or recognition of incentives or bonuses associated with the transaction that are provided by the financial institution or any other party;
(B) the disclosure is required, or is one of the lawful or appropriate methods, to enforce the rights of the financial institution or of other persons engaged in carrying out the financial transaction, or providing the product or service;
(C) the disclosure is required, or is a usual, appropriate, or acceptable method, for insurance underwriting at the consumer's request or for reinsurance purposes, or for any of the following purposes as they relate to a consumer's insurance: Account administration, reporting, investigating, or preventing fraud or material misrepresentation, processing premium payments, processing insurance claims, administering insurance benefits (including utilization review activities), participating in research projects, or as otherwise required or specifically permitted by Federal or State law; or
(D) the disclosure is required, or is a usual, appropriate or acceptable method, in connection with--
(i) the authorization, settlement, billing, processing, clearing, transferring, reconciling, or collection of amounts charged, debited, or otherwise paid using a debit, credit or other payment card, check, or account number, or by other payment means;
(ii) the transfer of receivables, accounts or interests therein; or
(iii) the audit of debit, credit or other payment information.
(8) State insurance authority.--The term ``State insurance authority means, in the case of any person engaged in providing insurance, the State insurance authority of the State in which the person is domiciled.
(9) Consumer.--The term ``consumer means an individual who obtains, from a financial institution, financial products or services which are to be used primarily for personal, family, or household purposes, and also means the legal representative of such an individual.
(10) Joint agreement.--The term ``joint agreement means a formal written contract pursuant to which two or more financial institutions jointly offer, endorse, or sponsor a financial product or service, and as may be further defined in the regulations prescribed under section 504.
(11) Customer <<NOTE: Regulations.>> relationship.--The term ``time of establishing a customer relationship shall be defined by the regulations prescribed under section 504, and shall, in the case of a financial institution engaged in extending credit directly to consumers to finance purchases of goods or services, mean the time of establishing the credit relationship with the consumer.
SEC. 510. EFFECTIVE DATE.
This subtitle shall take effect 6 months after the date on which

rules are required to be prescribed under section 504(a)(3), except--

(1) to the extent that a later date is specified in the rules prescribed under section 504; and
(2) that sections 504 and 506 shall be effective upon

enactment.

SEC. 521. PRIVACY PROTECTION FOR CUSTOMER INFORMATION OF FINANCIAL INSTITUTIONS.
(a) Prohibition on Obtaining Customer Information by False

Pretenses.--It shall be a violation of this subtitle for any person to obtain or attempt to obtain, or cause to be disclosed or attempt to cause to be disclosed to any person, customer information of a financial institution relating to another person--

(1) by making a false, fictitious, or fraudulent statement or representation to an officer, employee, or agent of a financial institution;
(2) by making a false, fictitious, or fraudulent statement or representation to a customer of a financial institution; or
(3) by providing any document to an officer, employee, or agent of a financial institution, knowing that the document is forged, counterfeit, lost, or stolen, was fraudulently obtained, or contains a false, fictitious, or fraudulent statement or representation.
(b) Prohibition on Solicitation of a Person To Obtain Customer

Information From Financial Institution Under False Pretenses.--It shall be a violation of this subtitle to request a person to obtain customer information of a financial institution, knowing that the person will obtain, or attempt to obtain, the information from the institution in any manner described in subsection (a).

(c) Nonapplicability to Law Enforcement Agencies.--No provision of

this section shall be construed so as to prevent any action by a law enforcement agency, or any officer, employee, or agent of such agency, to obtain customer information of a financial institution in connection with the performance of the official duties of the agency.

(d) Nonapplicability to Financial Institutions in Certain Cases.--No

provision of this section shall be construed so as to prevent any financial institution, or any officer, employee, or agent of a financial institution, from obtaining customer information of such financial institution in the course of--

(1) testing the security procedures or systems of such institution for maintaining the confidentiality of customer information;
(2) investigating allegations of misconduct or negligence on the part of any officer, employee, or agent of the financial institution; or
(3) recovering customer information of the financial institution which was obtained or received by another person in any manner described in subsection (a) or (b).
(e) Nonapplicability to Insurance Institutions for Investigation of

Insurance Fraud.--No provision of this section shall be construed so as to prevent any insurance institution, or any officer, employee, or agency of an insurance institution, from obtaining information as part of an insurance investigation into criminal activity, fraud, material misrepresentation, or material nondisclosure that is authorized for such institution under State law, regulation, interpretation, or order.

(f) Nonapplicability to Certain Types of Customer Information of

Financial Institutions.--No provision of this section shall be construed so as to prevent any person from obtaining customer information of a financial institution that otherwise is available as a public record filed pursuant to the securities laws (as defined in section 3(a)(47) of the Securities Exchange Act of 1934).

(g) Nonapplicability to Collection of Child Support Judgments.--No

provision of this section shall be construed to prevent any State- licensed private investigator, or any officer, employee, or agent of such private investigator, from obtaining customer information of a financial institution, to the extent reasonably necessary to collect child support from a person adjudged to have been delinquent in his or her obligations by a Federal or State court, and to the extent that such action by a State-licensed private investigator is not unlawful under any other Federal or State law or regulation, and has been authorized by an order or judgment of a court of competent jurisdiction.



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