West Virginia Property and Casualty Licensing Practice Exam

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What is the federal regulation also known as the "Financial Modernization Act of 1999"?

Gramm-Leach-Bliley Act
Fair Credit Reporting Act
Consumer Protection Act
Telemarketing Sales Rule

The correct answer is: Gramm-Leach-Bliley Act

The federal regulation known as the "Financial Modernization Act of 1999" is the Gramm-Leach-Bliley Act. This Act was significant because it repealed parts of the Glass-Steagall Act, allowing commercial banks, investment banks, and insurance companies to consolidate and operate under one roof. The primary aim of the Gramm-Leach-Bliley Act was to enhance competition among financial institutions and adapt to the changing nature of the financial services industry. This legislation also introduced requirements for protecting the privacy of consumers, mandating that financial institutions develop privacy policies to inform customers how their personal information is collected, used, and shared. This focus on consumer privacy alongside the modernization of financial services is why it remains a crucial component of financial legislation today. In contrast, the other options—Fair Credit Reporting Act, Consumer Protection Act, and Telemarketing Sales Rule—address different aspects of consumer rights and protections but do not relate to the consolidation of financial institutions or the modernization of financial regulations in the same way as the Gramm-Leach-Bliley Act.