Financial Privacy (2024)

Protecting Consumers’ Financial Privacy

Financial institutions are required to take steps to protect the privacy of consumers’ finances under a federal law called the Financial Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act. The FTC is one of the federal agencies that enforces provisions of Gramm-Leach Bliley, and the law covers not only banks, but also securities firms, and insurance companies, and companies providing many other types of financial products and services. Under the law, agencies enforce the Financial Privacy Rule, which governs how financial institutions can collect and disclose customers’ personal financial information; the Safeguards Rule, which requires all financial institutions to maintain safeguards to protect customer information; and another provision designed to prevent individuals and companies from gaining access to consumers’ personal financial information under false pretenses, a practice known as "pretexting."

Financial Privacy (2024)


Financial Privacy? ›

Under the law, agencies enforce the Financial Privacy Rule, which governs how financial institutions can collect and disclose customers' personal financial information; the Safeguards Rule, which requires all financial institutions to maintain safeguards to protect customer information; and another provision designed ...

How can I protect my financial privacy? ›

The following tips can help.
  1. #1 – Use strong passwords. ...
  2. #2 – Keep your operating system and software up to date. ...
  3. #3 – Never click on suspicious emails. ...
  4. #4 – Don't share personal information over public Wi-Fi connections. ...
  5. #5 – Maintain security software. ...
  6. #6 – Shred financial documents. ...
  7. #7 – Monitor your accounts.
Feb 13, 2023

What is the GLBA right to financial privacy? ›

The Right—Consumers must be given the right to “opt out” of, or prevent, a financial institution from disclosing nonpublic personal information about them to a nonaffiliated third party unless an exception to that right applies.

What is the federal right to financial privacy? ›

Generally, the RFPA requires that federal government agencies provide individuals with a notice and an opportunity to object before a bank or other specified institution can disclose personal financial information to a federal government agency, often for law enforcement purposes.

What laws are associated with financial privacy? ›

California law lets you tell your bank and other financial companies that you do not want them to share your personal financial information in some cases. You can say no to, or opt out of, having your information shared with outside companies that offer financial products or services.

Can government agencies see your bank account? ›

Financial Privacy Laws: Background

This also meant that banks were not required to disclose when they provided a consumer's records to the government or law enforcement. In other words, the government could access your bank records without your knowledge or consent.

What are the 3 protections of GLBA? ›

Three key rules of the GLBA include: Privacy Rule: Ensuring the protection of consumers' personal financial information. Safeguards Rule: Requiring the establishment of security measures to prevent data breaches. Pretexting Provisions: Prohibiting deceptive methods of obtaining personal financial information.

What is an example of a GLBA violation? ›

failing to provide users with a clear initial privacy notice, failing to deliver it in a way that each consumer could be reasonably expected to receive it, and by distributing a notice that didn't accurately affect its practices.”

What are the three types of privacy notices required under the GLBA? ›

There are three types of privacy notices defined in the regulations: an initial notice, an annual notice, and a revised notice. The regulation specifies when and to whom a bank is required to give each type of privacy notification. Let's look at the when and who for each type of privacy notice.

What states have financial privacy laws? ›

Currently, there are 15 states – California, Virginia, Connecticut, Colorado, Utah, Iowa, Indiana, Tennessee, Oregon, Montana, Texas, Delaware, Florida, New Jersey, and New Hampshire – that have comprehensive data privacy laws in place.

What is the Second Amendment Financial Privacy Act? ›

The Second Amendment Privacy Act is designed to protect the privacy of lawful and private firearm and ammunition purchases from being abused for political purposes by corporate financial service providers and unlawful government search and seizure of legal and private financial transactions.

Why is financial privacy important? ›

State and federal financial privacy laws protect consumers' sensitive information. On the federal level, consumers are allowed to limit the personal information that financial institutions and other businesses share.

What does the FTC Financial Privacy Rule require? ›

A financial institution must provide a notice of its privacy policies and practices with respect to both affiliated and nonaffiliated third parties, and allow the consumer to opt out of the disclosure of the consumer's nonpublic personal information to a nonaffiliated third party if the disclosure is outside of the ...

Is there a federal right to privacy law? ›

The Privacy Act of 1974, as amended, 5 U.S.C. § 552a , establishes a code of fair information practices that governs the collection, maintenance, use, and dissemination of information about individuals that is maintained in systems of records by federal agencies.

Are privacy rights protected under federal law? ›

The Court used the personal protections expressly stated in the First, Third, Fourth, Fifth, and Ninth Amendments to find that there is an implied right to privacy in the Constitution.


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