Two federal laws cover
different aspects of how companies can share your financial information,
as described in this guide: the Fair Credit Reporting Act and the
Gramm-Leach-Bliley Act.
The Fair Credit Reporting
Act
protects the privacy of certain information distributed by consumer
reporting agencies (CRAs). Most CRAs are credit bureaus that gather and
provide information about you, such as if you pay your bills on time or
have filed for bankruptcy, to creditors and other businesses. Under the
law, credit bureaus and other CRAs can release your information only to
those third parties that have certified that they have a purpose permitted
by the law to obtain your consumer report, such as to evaluate your
application for credit, insurance, or employment, or to rent you an
apartment.
When a financial company obtains your credit report from
a credit bureau, it may want to share that information with an affiliate,
meaning a company that owns your financial company, that your financial
company owns, or that is part of the same parent organization or corporate
family. Under the Fair Credit Reporting Act, however, if the financial
company plans to share certain information--for example, from your credit
report or your credit application--with its affiliates, it will usually
first notify you and give you an opportunity to opt out. This notice is
likely to be included in the privacy notice you receive from the financial
company under the Gramm-Leach-Bliley Act.
The Gramm-Leach-Bliley Act
requires
financial companies to tell you about their policies regarding the privacy
of your personal financial information. With some exceptions, the law
limits the ability of financial companies to share your personal financial
information with certain non-affiliates. A non-affiliate is a company that
is unrelated to your financial company, and may
include:
Service providers - companies hired by your financial
company to perform a specific service, such as printing your checks
Joint marketers - companies that have an
agreement with your financial company to offer you other financial
products or services
Other third-party
non-affiliate - which could include companies that may want
access to your financial company's mailing list to tell you about other
products and services.
Under the Gramm-Leach-Bliley Act, your
financial company can provide your personal financial information to
non-affiliated service providers including joint marketers. But before it
shares your information with other third-party non-affiliates (outside of
these exceptions), your financial company must tell you about its
information sharing practices and give you the opportunity to opt
out.
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