What federal law regulates the sharing of nonpublic personal information to third parties?

The Gramm-Leach-Bliley Act is the federal law that specifically regulates the sharing of nonpublic personal information to third parties. This act was enacted to maintain the privacy of consumers' personal information held by financial institutions and requires these entities to implement privacy policies and practices. Under this law, financial institutions must provide their customers with notices detailing their information-sharing practices, allow customers to opt-out of certain disclosures to non-affiliated third parties, and secure the information adequately to prevent unauthorized access.

This act is significant because it reflects the importance placed on consumer privacy in the financial industry, ensuring that individuals have some control over how their personal data is used and shared. The protections established by the Gramm-Leach-Bliley Act emphasize transparency and consent, which are crucial elements in fostering trust between consumers and financial service providers.