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Who is affected by the Gramm-Leach-Bliley Act’s data protection regulations? What are the penalties for violation?

 

Gramm-Leach-Bliley and data backup

The Gramm-Leach-Bliley Act (also formally known as the Financial Modernization Act of 1999) requires financial institutions to ensure the security and confidentiality of customers’ non-public, personal information.

Who can be affected by the Gramm-Leach-Bliley Act’s Data Protection Regulations?

Types of financial institutions required to comply with the Gramm-Leach-Bliley Act may include:

  • Commercial banks
  • Credit unions
  • Stock brokerage firms
  • Asset management firms
  • Investment advisors
  • Securities firms
  • Insurance companies
  • Finance companies
  • Building societies
  • Retailers
  • Bill/debt collectors
  • Attorneys
  • Mortgage companies
  • Any business that provides financial products or services

Penalties for Violating the GLBA

GLBA compliance is mandatory, and the penalties for violation are quite severe:

  • A financial institution can be fined up to $100,000 for each violation
  • The officers and directors of the offending institution can be fined up to $10,000 for each violation
  • Criminal penalties include imprisonment for up to 5 years, a fine, or both
  • If the GLBA is violated at the same time that another federal law is violated, or if the GLBA is violated as part of a pattern of any illegal activity involving more than $100,000 within a 12-month period, the violator’s fine will be doubled and he or she will be imprisoned for up to 10 years

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