GrammLeachBliley

Gramm-Leach-Bliley Act, commonly known as the Gramm-Leach-Bliley Act or GLBA, is a United States federal law enacted in 1999 to modernize the financial services industry. It is also referred to as the Financial Services Modernization Act of 1999. The law repealed key provisions of the Glass-Steagall Act of 1933 that barred affiliations among commercial banks, investment banks, and insurance companies, and it established a framework for financial holding companies to own multiple types of financial services firms.

A central purpose of GLBA was to allow legitimate affiliations among banks, securities firms, and insurance companies, enabling the formation of financial holding companies that could diversify products and services. This modernization was intended to foster competition, efficiency, and innovation in financial services, while maintaining regulatory oversight to manage risks and protect consumers.

GLBA includes prominent consumer privacy protections. The Financial Privacy Rule requires financial institutions to provide customers with clear notices about information-sharing practices, and to offer opt-out choices for sharing nonpublic personal information with non-affiliated third parties. The Safeguards Rule requires institutions to implement a comprehensive, risk-based information security program addressing administrative, technical, and physical safeguards. The Pretexting Provisions prohibit obtaining consumer information through misleading or deceptive means.

Regulatory oversight under GLBA involves multiple federal agencies, including the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the National Credit Union Administration, and the Federal Trade Commission for privacy-related aspects. The act has shaped the structure of the modern U.S. financial system and ongoing debates about risk, competition, and privacy.