Free Download: GLBA Compliance Checklist

GLBA Compliance: What Is It?

With the passage of the GLBA in 1999, the Glass-Steagall Act of 1933 was repealed. Officially called the Gramm-Leach-Bliley Act, GLBA repealed the Depression-era law. The GLBA is a regulation that covers financial institutions and changed how they are regulated, particularly when it comes to handling customers’ funds.

Globally responsible bank dealers have to provide transparency on what their customers can do with their money while protecting them from fraud or theft through risk management procedures. Personal data such as social security numbers, addresses, and credit card numbers must be protected while still being accessible by the customer. Additionally, the bank’s accounting records must keep track of every individual customer.

GLBA Sections

There are 3 key sections to GLBA that we will cover below. These are the financial privacy rule, the safeguards rule, and pretexting provisions.

Financial Privacy Rule

The GLBA Financial Privacy Rule requires businesses to give a privacy notice to customers and share their privacy practices with them. The rules also require that the business provide annual updates of their privacy policy, which must be made available in writing or electronically.

This is important in order to ensure that customers are fully aware of how their data will be used and shared by the financial institution.

Safeguards Rule

The GLBA requires businesses to develop security programs that safeguard sensitive customer information. These programs must be written policies, and the policy should contain examples of physical safeguards such as restricted access to information by locking doors and files as well as protection of paper documents with shredders.

Pretexting Provisions

Pretexting is when a person or persons gather information from another individual by pretending to be someone else. The GLBA prohibits pretexting in order to prevent practices such as phishing, where a criminal tries to gain information under false pretenses in order to commit identity theft. The GLBA makes it a crime to misrepresent oneself in order to obtain someone’s personal information.

The GLBA has been important in protecting consumers from fraud and identity theft. Employee training is one of the top preventative methods for safeguarding against these crimes and ensuring that customer data is protected. Financial institutions must have comprehensive employee training programs to prevent unauthorized access of customer data.

Why Is GLBA Compliance Important?

The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to properly safeguard their sensitive data. Failure to comply is a serious (and costly) offense – financial institutions can be fined up to $100,000 for each violation, while officers and directors can be served with fines of up to $10,000 per violation.

If you’re subject to the GLBA, there’s no question on whether or not you’ll need to maintain compliance, but rather how you can eliminate pain points along the path to compliance with customer data and optimize your processes to achieve long-term GLBA compliance as part of your financial services.

GLBA Compliance: Who Is It For?

The GLBA Compliance Checklist is a resource provided by the Consumer Financial Protection Bureau to help businesses comply with the Gramm-Leach-Bliley Act (GLBA). The GLBA applies to companies that offer financial products or services. This means any company that offers financial advice is subject to GLBA restrictions, including but not limited to banks and insurance agencies.

Because of the importance of protecting consumers from indiscriminate spread of their private information, the GLBA protects consumers from financial institutions spreading their personal information indiscriminately.

Download Our Free GLBA Compliance Checklist

We created a GLBA Compliance Checklist to help financial institutions see where you’re already succeeding and identify areas for improvement with sensitive data.

Download your free copy using the form on this page so that your financial institution can protect customer data better!

You May Also Like: GLBA Compliance Software