Financial Privacy Rule
Financial Privacy Rule: A rule within the Gramm-Leach-Bliley Act that governs the collection, protection, and disclosure of a customers’ personal financial information by financial institutions and service organizations. The Financial Privacy Rule states that the law also applies to all companies, regardless of whether they are financial institutions, who receive such information. This means that anyl company that process personal nonpublic information must also be audited to determine if they have adequate controls in place.The Financial Privacy Rule provides for a written privacy policy agreement between the company and the consumer pertaining to the protection of the consumer’s personal nonpublic information. The Financial Privacy Rule requires financial institutions to provide each consumer with a privacy notice at the time the consumer relationship is established and annually thereafter. The privacy notice to the consumer must explain the information collected about the consumer, where that information is shared, how that information is used, agree to give notice if changed and how that information is protected.
