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    Issue of Interest: Protecting Customer Privacy

    ABA Media Contact: John Hall
    (202) 663-5473                                                                  
    E-mail:     jhall @aba.com                                                     Last updated: May 2, 2007

    The protection of personal identifying information is an ongoing challenge for consumers, the government and the private sector. Like other businesses, banks are using technologies to make their products and services more convenient than ever. At the same time, banks are working to ensure their policies and practices are in sync with our customers' expectations of privacy.

    The Gramm-Leach-Bliley Act of 1999 added important new consumer protections related to financial privacy. The law, which modernized financial services by allowing commercial banks, securities firms and insurance industries to compete with each other, also requires banks and other financial institutions to create and disclose privacy policies to their customers.

    These policies, which institutions began mailing this year (the deadline is July 2001), spell out how each bank collects, uses and safeguards customer information. To the extent any bank may share information with an unaffiliated company - for example, to offer you related products that may be of interest to you - customers have the right to "opt out." The policies explain how to opt out by providing a response form or special phone number consumers may call.

    The GLB Act also protects consumers by:

    • Directing regulators to establish standards that ensure the security and confidentiality of customer information;
    • Prohibiting the transfer of credit card or other account numbers to third-party marketers; and
    • Outlawing pretext calling (which involves information brokers calling banks to obtain customer information with the intent to defraud the bank or customer).

    The banking industry supported these provisions in the GLB Act and is committed to continuing its tradition of safeguarding confidential financial information.

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    Background

    Legislative Information

    ABA Correspondence