Final answer:
Violating the FCRA occurs when a financial institution shares transactional information with an affiliate without providing an opt-out provision for the consumer, as per option A. This is necessary to protect consumer privacy in accordance with several acts, including FCRA, the Privacy Act of 1974, and the Financial Services Modernization Act of 1999.
Option 'a' is the correct.
Step-by-step explanation:
Violation of the Fair Credit Reporting Act (FCRA)
When examining what constitutes a violation of the Fair Credit Reporting Act (FCRA), it is important to understand the provisions that regulate the sharing of information between businesses, particularly financial institutions. The FCRA was enacted to ensure the accuracy, fairness, and privacy of consumer information contained within the files of credit reporting agencies.
According to the FCRA, option A) Sharing transactional information with an affiliate without an opt-out provision violates the FCRA. Financial institutions must provide customers with a privacy policy, as mandated by the Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, which works in tandem with FCRA by requiring institutions to allow customers to opt-out of sharing personal transactional information with affiliates.
Options B, C, and D involve sharing information with unaffiliated third parties or consent issues but do not directly relate to the FCRA's requirements regarding affiliate information sharing without offering an opt-out mechanism. The specific action of sharing transactional data with affiliates without providing customers the opportunity to opt-out is what constitutes a violation under the FCRA.
It is essential for these institutions to not only provide transparent disclosures but also to maintain practices that protect consumer rights under various regulations including the FCRA, the Privacy Act of 1974, and the Financial Services Modernization Act of 1999.