What is a key feature of the Graham-Leach-Bliley Act regarding consumer information?

The Graham-Leach-Bliley Act, enacted in 1999, primarily focuses on safeguarding the privacy of consumers’ personal financial information. A key feature of the Act is its establishment of opt-out provisions. These provisions allow consumers to prevent financial institutions from sharing their nonpublic personal information with certain third parties. This is significant because it empowers consumers to have more control over their personal data and how it is used, thereby enhancing their privacy and security.

Moreover, the Act restricts the disclosure of nonpublic information to ensure that financial institutions are not freely sharing sensitive consumer data without explicit consent. This is crucial in maintaining confidentiality and trust in financial relationships. The emphasis on consumer privacy protection aligns with the broader goals of the Act, which aims to promote fair and transparent practices in financial services while balancing the need for economic growth and competition.

Other options, such as mandatory reporting of financial data, increasing penalties for misuse of consumer data, or mandating annual audits of financial institutions, are not core features of the Graham-Leach-Bliley Act. Instead, those elements relate to different regulations or laws that pertain to financial oversight and consumer protection in other contexts. Thus, the focus on opt-out provisions and restrictions on disclosure is a fundamental aspect of the Act’s approach