What must a financial institution do before sharing personal information with third parties?

A financial institution is required to provide a privacy notice and an opportunity for consumers to opt out before sharing their personal information with third parties. This requirement is rooted in privacy regulations such as the Gramm-Leach-Bliley Act (GLBA), which aims to protect consumers' personal financial information.

The privacy notice acts as a transparent communication tool that informs consumers about what information is collected, how it is used, and with whom it may be shared. By providing an opportunity to opt out, the institution gives consumers some measure of control over their information, allowing them to restrict the sharing of their personal data if they choose to do so. This approach emphasizes the importance of consumer consent and autonomy in handling personal information, fostering trust and accountability in the financial services industry.

Happy to clarify any other aspects related to privacy compliance!