In 2019, 5.4% of U.S. households, or 7.1 million, were unbanked. Many choose to avoid financial institutions because they fear their personal information will become public.
To keep your institution within the law, you must ensure financial data never gets into the wrong hands. By following GLBA compliance rules, you can make sure this doesn’t happen.
Read on to learn everything you need to know about staying GLBA compliant and what the act applies to.
Who Does GLBA Compliance Apply to?
According to the FTC, companies that provide financial products to their consumers must be GLBA compliant. This includes services that offer financial advice, investment advice, loans, and insurance.
For this reason, many believe that GLBA only applies to insurance companies or banks. However, any company slightly engaged in providing financial products falls within the category.
Some less traditional companies that must be GLBA compliant include the following:
- Online money transferring services
- Mortgage brokers
- Automobile dealerships
- Debt collectors
- Investment advisors
A retailer that offers their own credit card to its customers also follow this rule. The same goes for higher education institutions that offer student loans, scholarships, grants, etc.
What Does the GLBA Protect?
The GLBA act works to protect the personal information that institutions take from their customers. The information includes:
- Social security numbers
- Bank account numbers
- Credit card numbers
- Contact Details
Personally identifiable financial information (PIFI) is the nonpersonal information this act speaks of. Under the GLBA compliance laws, this includes identification and search of financial information.
Consumers vs. Customers
There are different types of GLBA compliance rules that are differentiated between consumers and customers. Customers have the right to receive a notice about privacy from a company they are working with.
A consumer uses the products or services of a financial institution for personal use. The Financial Privacy Rule under GLBA compliance only applies to individuals not commercial clients.
On the other hand, consumers are those who use ATMs without having an account open at that bank. It also applies to those who have been rejected for a loan.
Customers are a subcategory of consumers, but consumers have a long-lasting relationship with a financial institution. Consumers have an open bank account, signed insurance policies, or signed leases.
Those who have ended their relationship with a financial institution are still customers which means the company must remain compliant.
The Financial Privacy Rule
The Financial Privacy Rule says that institutions must provide their customers with a written privacy notice that states what data they collect, where the data is shared, and how the data gets used.
Customers receive this notice when the relationship comes about and continue to receive the notice annually. Security weaver can help your business stay GLBA compliant under this rule and more.
Staying Compliant and Protecting Customers
When your financial institute or place of business follows the GLBA compliance rules, you protect your customers in this process. These laws are in place for a reason.
To lessen your burden, ensure you know how to navigate these complex rules.
For more articles that cover a variety of topics, check out the other posts on our blog.