Mortgage Loan Originator (MLO) Licensing Practice Test

What type of information is covered by the Gramm-Leach-Bliley Act?

1. Creditworthiness of borrowers

2. Advertising practices of lenders

3. Protection of consumers’ financial privacy

4. Interest rate disclosures

The correct answer is: Protection of consumers’ financial privacy

The Gramm-Leach-Bliley Act (GLBA) primarily focuses on protecting consumers' financial privacy. It requires financial institutions to implement privacy policies and practices to safeguard sensitive consumer information. Under the GLBA, institutions must provide consumers with clear and conspicuous notices regarding their privacy policies, as well as inform them about their rights with respect to their personal data. This act emphasizes the importance of maintaining the confidentiality of personal financial information, ensuring that consumers have greater control over who has access to their financial data. As a result, the correct choice reflects the core purpose of the GLBA, which is to enhance consumer privacy in financial transactions and prevent unauthorized sharing of personal information among financial institutions. The other options, while related to financial practices, do not encapsulate the primary focus of the Gramm-Leach-Bliley Act. For instance, creditworthiness assessments and interest rate disclosures pertain to lending practices rather than privacy protection, and advertising practices involve marketing rather than the safeguarding of consumer information.