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A Brief Overview of the Gramm-Leach-Bliley Act of 1999

To understand the Gramm-Leach-Bliley Act of 1999, you must first acquaint yourself with the Glass-Steagall Act, which was passed in 1933. The Glass-Seagall Act was passed in response to the Great Depression, and was designed to regulate the banking industry in order to rebuild the economy and to prevent another stock market crash from occurring.

The Glass-Steagall Act called for a separation of banking, insurance, and securities companies and created the Federal Deposit Insurance Corporation (FDIC) to insure consumers' bank deposits.

When the Gramm-Leach-Bliley Act of 1999 was passed, it essentially repealed the Glass-Steagall Act, allowing commercial banks, investment banks, insurance companies, and security firms to consolidate. However, regulations were put in place to protect consumers. For example, the Financial Privacy Rules states that banks must share their privacy policy with customers when they begin their business relationship and subsequently on an annual basis. This policy must include how the customer's information is collected, how it is used, and how it is protected.

The Gramm-Leach-Bliley also established regulations regarding insurance sales disclosures. This means that when you purchase insurance from your bank, the bank must disclose the terms and conditions of your policy. If you are applying for credit, and the bank offers to sell you personal insurance products, they must inform you that the extension of credit is not dependant on your purchase.

Browse our library to learn more about insurance sales disclosure. 

Has your bank recently misrepresented their insurance sales disclosure to you? If so, you may have grounds for a class action lawsuit. Speak with the experienced attorneys at Phillips & Garcia P.C. to learn more about insurance sales disclosure and how you can file an insurance class action lawsuit.