Gramm–Leach–Bliley Act is a federal statute allowing commercial banks, investment bank, and insurance companies to consolidate as a single financial industry. Gramm–Leach–Bliley Act is also known as the Financial Services Modernization Act, 1999. GLBA allows controlling the ways that financial institutions deal with the private information of individuals.
The Act consists of three sections which includes:
1.The Financial Privacy Rule, which regulates the collection and disclosure of private financial information;
2.The Safeguards Rule, which stipulates that financial institutions must implement security programs to protect such information; and
3. Pretexting provisions, which prohibit the practice of pretexting (accessing private information using false pretenses).
The Act also requires financial institutions to give customers written privacy notices that explain their information-sharing practices.
The Act defines consumer as 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. [15 USCS § 6809].