Gramm-Leach-Bliley

2. Gramm-Leach-Bliley • Consumer financial information privacy law • “GLB Act” • Applies to “financial institutions” – any businesses significantly engaged in financial activities such as lending

3. Gramm-Leach-Bliley • The FTC ruled that GLB applies to higher education if it offers financial aid • Imposes duties beyond FERPA • GLB Act led to creation of the Privacy Rule and the Security Rule

4. Gramm-Leach-Bliley • Protects information about: • Anyone who receives a financial service from the school and provides non-public financial information about themselves • Includes students, parents, faculty, staff and other third parties with whom the university interacts

5. Gramm-Leach-Bliley • GLB Privacy Rule • Must give notice of privacy practices/right to opt-out of sharing of information with third parties • FERPA compliance deemed GLB Privacy Rule compliance • Any institution of higher education that complies with the Federal Educational Rights and Privacy Act ("FERPA"), 20 U.S.C. 1232g, and its implementing regulations, 34 CFR part 99, and that is also a financial institution subject to the requirements of this part, shall be deemed to be in compliance with this part if it is in compliance with FERPA. - 16 CFR 313.1

6. Gramm-Leach-Bliley • GLB Security Rule • Rules on Safeguarding Customer Information • 67 Fed. Reg. 36484 (May 23, 2002) • No exemption for educational institutions • Must develop/maintain an information security program

7. Gramm-Leach-Bliley • Information Security Plan should: • Identify and assess risk to customer information • Design/implement written safeguard program • Respond to incidents • Proactively respond to vulnerabilities • Monitor/adjust • Require vendors to comply

8. Gramm-Leach-Bliley • Information to protect: • Social security numbers • Credit card numbers • Bank account numbers • Account balances • Credit history or rating • Tax return information

9. The Equal Credit Opportunity Act • 15 USC § 1691 • Prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or because you get public assistance

10. The Equal Credit Opportunity Act • 1691a(e)“Creditor” means any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit

11. The Equal Credit Opportunity Act • 1691(a) Activities constituting discrimination • Unlawful for any creditor to discriminate against any applicant— • on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract); • because all or part of the applicant’s income derives from any public assistance program; or • because the applicant has in good faith exercised any right under this chapter.

12. The Equal Credit Opportunity Act • 1691(b) Activities not constituting discrimination • Asking about marital status to ascertain the creditor’s rights and remedies applicable to the particular extension of credit • Asking the applicant’s age or whether the applicant’s income derives from any public assistance program for the purpose of determining the amount and probable continuance of income levels, credit history, or other pertinent element of credit-worthiness • Using an empirically derived credit system which considers age if such system is demonstrably and statistically sound • To ask or consider the age of an elderly applicant if it will be used in favor of such applicant

13. The Equal Credit Opportunity Act • When Deciding To Grant You Credit Or When Setting The Terms Of Credit, Creditors May Not... • Consider your race, color, religion, national origin, sex, marital status or whether you get public assistance. • Consider your age, unless: • you’re too young to sign contracts, generally under 18; • it’s used to determine the meaning of other factors important to creditworthiness. For example, a creditor could use your age to determine if your income might drop because you’re about to retire; • Consider whether you have a telephone account in your name. A creditor may consider whether you have a phone.

14. Lender Licensing • Many states require a person to obtain a license to make a consumer loan • Substantial penalties for failure to comply • Limited exceptions to licensure

15. Small Loan Statutes • Ohio Revised Code 1321.01 • A person wishing to engage in the business of lending in amounts of five thousand dollars or less and charging a rate greater than eight percent must first be licensed

16. Small Loan Statutes • Ohio Revised Code 1321.01 • “Person” includes individuals, partnerships, associations, trusts, corporations, and all other legal entities

17. Small Loan Statutes • Ohio Revised Code 1321.01 • Excludes: • Banks, Second Mortgage Loan Licensees • Insurance companies • Any licensee or other person who willfully violates section 1321.13 of the Revised Code shall forfeit to the borrower twice the amount of interest contracted for

18. Small Loan Statutes • Ohio Revised Code 1321.13 limits interest, fees, and charges • Maximum interest rates • Required order of application of payments • No compounding • Many, many more…

19. Small Loan Statutes • Ohio Revised Code 1321.13 limits interest, fees, and charges • Maximum interest rates • Required order of application of payments • No compounding • Many, many more…

20. Small Loan Statutes • Ohio Revised Code 1321.01 • Violations: • 5th degree felony • Administrative fines and civil penalties

21. Questions & Answers Dino Tsibouris (614) 360-1160 dino@tsibouris.com