In 1999, the Financial Services Modernization Act was signed into law. This legislation was commonly referred to as the Gramm-Leach-Bliley Act (GLB), and it set forth a number of dramatic changes to increase competition within the banking, insurance and securities industries. At the tail end of consideration of the bill in Congress, provisions were added that would require financial institutions to protect information that was personally identifiable from nonaffiliated third parties. These provisions came as a result of a number of high profile telemarketing fraud cases throughout the country.
In May 2000, the Federal Trade Commission (FTC) published a Final Rule implementing the privacy provisions of the GLB Act. Section 504 of the GLB Act required the FTC and other agencies to issue regulations as may be necessary to implement notice requirements and restrictions on a financial institution’s ability to disclose nonpublic personal information about consumers to nonaffiliated third parties. Full compliance with the GLB Act and Final Rule was required by July 1, 2001.
A number of provisions within the FTC Final Rule state that real estate appraisers are to be considered “financial Institutions” subject to the requirements of the GLB Act and the Final Rule. This new requirement was set forth, even though real estate appraisers already abide by confidentiality standards required by the Uniform Standards of Professional Appraisal Practice. In addition, the legislative history of GLB indicates that Congress never intended for the legislation to cover real estate appraisals.
Revised Summary of the Gramm-Leach-Bliley Act’s Requirements Concerning the Disclosure of Nonpublic Personal Information by Real Estate Appraisers
Expanded Summary of GLB Requirements
Flowchart of the GLB Act Requirements
FNC, Inc. Guide to Privacy for Mortgage Lenders and Appraisers, issued in September 2001.
Gramm-Leach-Bliley Act of 1999
An Act to enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, insurance companies, and other financial service providers, and for other purposes.
Appraisal Institute Comment Letter
Joint letter by the Appraisal Institute, American Society of Appraisers and the National Association of Independent Fee Appraisers to the Federal Trade Commission.
Joint Agency Rules
Issued by the Federal Reserve Board, Office of Thrift Supervision, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation.
Final Rule: Interagency Guidelines Establishing Standards for Safeguarding Customer Information, Date: January 17, 2001. A final rule outlining guidelines for safeguarding confidential customer information.
Federal Trade Commission Rule
Final Rule: Privacy of Consumer Financial Information (Regulation S-P), Date: May 24, 2000. Effective Date: November 13, 2000. The Federal Trade Commission is publishing a final privacy rule as, as required by section 504(a) of the Gramm-Leach-Bliley Act, with respect to financial institutions and other persons under the Commission’s jurisdiction.
Securities and Exchange Commission Regulation
Privacy of Consumer Financial Information (Regulation S-P). June 22, 2000. Effective Date: November 13, 2000. The Securities and Exchange Commission is adopting Regulation S-P, privacy rules promulgated under section 504 of the Gramm-Leach-Bliley Act. Section 504 requires the Commission and other federal agencies to adopt rules implementing notice requirements and restrictions on a financial institution’s ability to disclose nonpublic personal information about consumers.
Federal Deposit Insurance Corporation Bulletin
FDIC Bulletin FIL-3-2001: Privacy of Consumer Financial Information January 22, 2001. The FDIC has produced a Privacy Rule Handbook to help financial institutions comply with the final rule governing the privacy of consumer financial information and implement effective consumer privacy policies.
Office of the Comptroller of the Currency Bulletin
OCC Bulletin 2000-25: Privacy Laws and Regulations January 22, 2001. A document designed to assist national banks and their subsidiaries in complying with federal laws and regulations relating to the disclosure of consumer financial information.
Federal Trade Commission Web Site
The Federal Trade Commission index of materials related to the Gramm-Leach-Bliley Act. Provides a comprehensive collection of primary documents as an education tool for those interested in the subject.