Final answer:
The Gramm-Leach-Bliley Act has three sections: the Financial Privacy Rule, which regulates the disclosure of consumers' personal financial information; the Safeguards Rule, mandating security protocols for protecting this information; and the Pretexting Provisions, which outlaw obtaining personal information under false pretenses.
Step-by-step explanation:
The Gramm-Leach-Bliley Act (GLB Act) of 1999 has three main sections, each with specific implications for the financial services industry:
- Financial Privacy Rule - Requires financial institutions to provide each consumer with a privacy notice at the time the consumer relationship is established and annually thereafter. The privacy notice must explain the information collected about the consumer, where that information is shared, how that information is used, and how that information is protected.
- Safeguards Rule - Mandates financial institutions to implement security programs to protect the confidentiality and integrity of personal consumer information.
- Pretexting Provisions - Prohibits the practice of pretexting (accessing private information under false pretenses) and establishes legal consequences for individuals and companies that engage in such behavior.
The GLB Act essentially overturned some provisions of the Glass-Steagall Banking Act, specifically allowing for the combination of commercial banking, investment banking, and insurance under one roof, while setting rules to protect consumers' personal financial information.