Question 33
Domain 1: Federal Mortgage-Related LawsA consumer wants to opt out of all information sharing. Under GLBA, can they prevent the lender from sharing their information with affiliated companies?
Correct answer: B
Explanation
Under GLBA, the opt-out right applies to sharing with nonaffiliated third parties, not affiliates. The law permits sharing with affiliated companies without an opt-out, so a consumer cannot stop that disclosure simply by opting out of all information sharing.
Why each option is right or wrong
A. Yes, consumers can opt out of all sharing including affiliates
B. No, sharing with affiliates is permitted without opt-out rights
Under the Gramm-Leach-Bliley Act, the consumer opt-out right in 15 U.S.C. § 6802(b) applies only before a financial institution discloses nonpublic personal information to a nonaffiliated third party, and the implementing rule at 12 C.F.R. § 1016.13 likewise limits opt-out to nonaffiliates. Disclosures to affiliated companies are not covered by that opt-out right, so the lender may share information with its affiliates without giving the consumer a veto over that transfer.
C. Only if the affiliates are in different states
D. Only for marketing purposes