Consumer Protection Topics - Financial Privacy
Financial Privacy Basics
Financial institutions commonly collect personal information - such as your name, phone number, address, income, and details about your assets - as part of a loan application, and some financial institutions share this information with other companies that want to identify potential customers for products and services. The Gramm-Leach-Bliley Act of 1999 created consumer protections to safeguard consumers’ privacy and set standards for information sharing in such situations. All consumers benefit from knowing what information is collected by a financial institution and how this information may be shared with other companies.
Consumer Protections Available
Financial institutions are required to provide consumers with a privacy notice at account opening and annually. Financial institutions may make the annual privacy notice available on their website. The privacy notice describes whether and how the financial institution shares consumers' nonpublic personal information, including personally identifiable financial information, with other entities. In addition, the notices explain how financial institutions protect the non-public personal information collected and maintained. If applicable, these notices also explain how consumers can “opt out” of certain types of information sharing.
For instance, a financial institution may send you a privacy notice that says it shares your non-public personal information with an outside company. The privacy notice may describe the company as a “nonaffiliated third party” and explain how to opt out. By opting out, you prevent the financial institution from sharing your information with the nonaffiliated third party.
However, there are exceptions to a consumer’s ability to opt out. For example, financial institutions can share:
- Information about you with firms that help promote and market the financial institution’s own products or products offered under a joint agreement.
- Records of your transactions with firms that provide data processing and mailing services for your financial institution.
- Information about you in response to a court order.
- Your payment history on loans and credit cards with credit bureaus.
Protect Your Privacy
Take the following steps to protect your privacy:
- Read every privacy notice you receive.
- Ask your financial institution any questions you have about financial privacy.
- Determine whether you can opt out of certain information sharing and notify your financial institution of your decision to opt out.