Financial Privacy: The Gramm-Leach-Bliley Act

The Financial Modernization Act of 1999, also known as the "Gramm-Leach-Bliley Act" or GLB Act, includes provisions to protect consumers' personal financial information held by financial institutions. There are three principal parts to the privacy requirements: the Financial Privacy Rule, Safeguards Rule and pretexting provisions

The GLB Act gives authority to eight federal agencies and the states to administer and enforce the Financial Privacy Rule and the Safeguards Rule. These two regulations apply to "financial institutions," which include not only banks, securities firms and insurance companies, but also companies providing many other types of financial products and services to consumers. Among these services are lending, brokering or servicing any type of consumer loan, transferring or safeguarding money, preparing individual tax returns, providing financial advice or credit counseling, providing residential real estate settlement services, collecting consumer debts and an array of other activities. Such non-traditional "financial institutions" are regulated by the FTC.

The Financial Privacy Rule governs the collection and disclosure of customer's personal financial information by financial institutions. It also applies to companies, whether or not they are financial institutions, who receive such information.

The Safeguards Rule requires all financial institutions to design, implement and maintain safeguards to protect customer information. The Safeguards Rule applies not only to financial institutions that collect information from their own customers, but also to financial institutions - such as credit reporting agencies - that receive customer information from other financial institutions.

The Pretexting provisions of the GLB Act protect consumers from individuals and companies that obtain their personal financial information under false pretenses, a practice known as "pretexting."

GLBA provides more emphasis on Confidentiality and Integrity of consumer information, which is not disclosed to any third party due to software vulnerabilities. In these times, information is automated and information security is a major component of GLBA compliance. These guidelines define customer information as any record containing a customer's personal information in any form.

Secure Auditor™ automated security auditing tool is invaluable software in maintaining a secure IT infrastructure. Secure Auditor T can ensure that customer information is held on a well-configured and secure operational system, meeting a company's responsibility under the act to preserve the confidentiality and integrity of personal data.

In assessing the risks, Secure Auditor™ assesses the most updated security vulnerabilities and presents solutions in form of a report. These reports provide an in-depth security analysis of the selected operational system. Organization can also prioritize remediation and manage risks in a much better manner eventually making it in compliance with GLBA requirements.