Gramm-Leach-Bliley Act

• The Gramm-Leach-Bliley Act of 1999 established clear guidelines on consumer privacy. The Act took effect on July 1, 2001, and banks, along with other institutions, are required to comply with its provisions. The FDIC distributed information to member banks about the provisions of the Act that detailed how this law specifically impacted banking. Elements of the Act that specifically impact banks include the provision allowing either owner of a joint account to opt out of a bank's information-sharing practices. Additionally, the Act states that banks cannot share information about a customer's credit report without first gaining the customer's approval.
  
  

Collecting Information

• When you open a checking account, the USA Patriot Act requires the bank to record your name, date of birth, Social Security number and physical address. Banks keep this information on file as well as other personal data, such as your phone number and employment information. Banks usually try to find out information about your financial assets, loans and retirement accounts and keep that information in your personal file. Banks review information about financial services and accounts that you have elsewhere and then try to entice you to move those accounts by offering you discounted rates on similar products. Banks do not typically pull your credit report when you open a checking account although, if you apply for a loan, banks can view and record that information.
  
  

Privacy Notice

• The Gramm-Leach-Bliley Act requires banks and other institutions to provide you with a privacy notice whenever you open a new account. If you already have an existing account at your bank and open a new checking account, the bank must also provide you with a copy of the privacy policy. This document must detail the kind of information that the bank gathers on its customers. The document must also clearly state what information, if any, the bank shares about its customers and how it protects consumer information. Banks must provide all checking account holders with an updated privacy disclosure at least once a year.
  
  

Consumer Rights

• You have the right to opt out of information-sharing between your bank and other institutions. However, the right to opt out only applies to your bank sharing information with other companies and not subsidiaries, such as an insurance firm operated by the same parent company. You cannot stop your bank from sharing certain information, such as publicly available telephone numbers or information relating to mortgage liens or other documents that anyone can view by accessing public records directories. If you are unhappy with your bank's privacy policy, you can complain to your bank, switch banks or, if you feel the bank has violated your rights, you can lodge a complaint with various government regulators, including the FDIC.