Two federal laws cover different aspects of how companies can share your financial information: the Fair Credit Reporting Act (FCRA) and the Gramm-Leach-Bliley Act (GLBA).
Fair Credit Reporting Act (FCRA)
The FCRA protects the privacy of certain information distributed by consumer reporting companies, which gather and sell information about you, like where you live, how you pay your bills, and whether you’ve been sued or arrested, or have filed for bankruptcy. Under the law, consumer reporting companies can release your information only to third parties that have a permissible purpose to obtain it, like creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.
When a financial company gets your credit report, it may want to share that information with an affiliate — 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 FCRA, 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 get from the financial company under the GLBA.
Gramm-Leach-Bliley Act (GLBA)
Under the GLBA, financial companies must 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 without first notifying you about the sharing and providing you with an opportunity to opt-out. A non-affiliate is a company that is unrelated to your financial company.
Under the GLBA, your financial company can provide your personal financial information to certain non-affiliated companies, including service providers and joint marketers — companies that have an agreement with your financial company to offer you other financial products or services — without providing you with an opportunity to opt out.
But before it shares your information with other third-party non-affiliates, your financial company must tell you about its information sharing practices and give you the opportunity to opt out.
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