Which act aimed to protect consumers' personal financial information held by financial institutions and their service providers?

Which act aimed to protect consumers' personal financial information held by financial institutions and their service providers?

• A. Gramm-Leach-Bliley Act
• B. HIPAA
• C. Sarbanes-Oxley 2002
• D. California SB 1386

Answer: (A)

The question tests knowledge of privacy and data-protection laws that specifically govern how financial information is handled. The Gramm-Leach-Bliley Act sets the rules for how financial institutions and their service providers protect and share consumers’ nonpublic personal financial information. It requires clear disclosure of information-sharing practices and imposes safeguards to protect data through the Safeguards Rule and the Privacy Rule, addressing how information is collected, stored, and shared with third parties. HIPAA covers health information, not financial data. Sarbanes-Oxley focuses on corporate governance and internal controls for financial reporting. California SB 1386 is a state breach-notification law. Therefore, the act that best fits protecting consumers’ personal financial information held by financial institutions and their service providers is the Gramm-Leach-Bliley Act.

The question tests knowledge of privacy and data-protection laws that specifically govern how financial information is handled. The Gramm-Leach-Bliley Act sets the rules for how financial institutions and their service providers protect and share consumers’ nonpublic personal financial information. It requires clear disclosure of information-sharing practices and imposes safeguards to protect data through the Safeguards Rule and the Privacy Rule, addressing how information is collected, stored, and shared with third parties.

HIPAA covers health information, not financial data. Sarbanes-Oxley focuses on corporate governance and internal controls for financial reporting. California SB 1386 is a state breach-notification law. Therefore, the act that best fits protecting consumers’ personal financial information held by financial institutions and their service providers is the Gramm-Leach-Bliley Act.