Financial Privacy Laws Affecting Sharing of Customer Information Among Affiliated Institutions
Margaret Murphy · University of North Texas Digital Library (University of North Texas) · 2003
The privacy provisions of the Gramm-Leach-Bliley Act of 1999 (P.L. 106-102) do not permit customers to preclude financial institutions from sharing nonpublic personal information with affiliated companies; they merely require companies to notify their customers of their practices of information sharing with affiliates.Until the Fair Credit Reporting Act (FCRA) was amended in 1996, sharing of such information with affiliates might have subjected a company to being regulated as a credit reporting agency.Under provisions added in 1996, 15 U.S.C. § § 1681a(d)(2)(A)(ii) and (iii), which preempt inconsistent state law, companies have been permitted to share among their corporate family a broad range of data they have collected on their customers provided they have given the customers the opportunity to preclude, i.e., opt out of, the information sharing.P.L. 108-159 makes these FCRA preemptions permanent and provides a limited opt-out from affiliate sharing of consumer information for the purpose of marketing solicitations.This report will be updated to reflect action on major legislation. For related information see CRS Report RL31758, Financial Privacy: The Economics of Opt-In vs Opt-Out; CRS Report RL31847, The Role of Information in Lending: The Cost of Privacy Restrictions; CRS Report RS21449, Fair Credit Reporting Act: Preemption of State Law; and CRS Report RL32535, Implementation of the Fair and Accurate Transactions