Banking Practice Exam

The Gramm-Leach-Bliley Act is significant because it mandates financial institutions, including banks, to provide clear disclosures regarding their privacy policies to customers. This act requires institutions to inform consumers about their information-sharing practices and to give them the option to opt-out of having their personal information shared with nonaffiliated third parties. This consumer protection measure is important as it enhances transparency in how personal information is handled and secures the privacy of individuals.

In contrast, the other acts mentioned focus on different aspects of banking regulation. For instance, the Riegle-Neal Interstate Banking and Branching Efficiency Act primarily addresses the ability of banks to operate across state lines and is centered around branching efficiencies, rather than privacy disclosures. The Financial Institutions Reform, Recovery, and Enforcement Act relates to the reform of savings and loan institutions and the enforcement of regulations in the aftermath of the 1980s savings and loan crisis. Lastly, the Federal Deposit Insurance Corporation Improvement Act deals with the improvement of deposit insurance and the overall safety and soundness of the banking system, but does not specifically require disclosure of privacy policies. Thus, the Gramm-Leach-Bliley Act stands out as the correct answer in the context of privacy policy disclosure requirements.