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Question: 1 / 545

Which US federal law requires financial institutions to explain how they manage customer information?

Health Insurance Portability and Accountability Act

Gramm-Leach-Bliley Act (GLBA)

The Gramm-Leach-Bliley Act (GLBA) is the correct answer because it specifically mandates that financial institutions disclose their policies and practices regarding the collection and sharing of customers' personal financial information. This law was enacted to protect consumers' private data and ensure that they are informed about how their information is used, which is a core element of financial privacy rights.

Under the GLBA, financial institutions are required to provide a privacy notice that explains their information-sharing practices and gives consumers the opportunity to opt-out of having their nonpublic personal information shared with third parties. This requirement is crucial for building trust between financial institutions and their customers and for promoting transparency regarding data management.

The other laws listed focus on different aspects of regulation. For instance, the Health Insurance Portability and Accountability Act (HIPAA) relates to the protection of health information, while the Fair Credit Reporting Act primarily governs the accuracy and privacy of consumer credit information. The Sarbanes-Oxley Act is focused on corporate governance and financial disclosures in public companies, rather than consumer privacy in financial institutions.

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Fair Credit Reporting Act

Sarbanes-Oxley Act

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