What must a financial institution provide before disclosing personal information to a nonaffiliated third party?

A financial institution is required to provide a privacy notice and an opt-out opportunity before disclosing personal information to a nonaffiliated third party. This is a fundamental requirement under various privacy regulations, such as the Gramm-Leach-Bliley Act in the United States, which emphasizes consumer protection concerning their personal financial information.

The privacy notice serves to inform customers about the institution's practices regarding the collection, sharing, and protection of their personal information. Additionally, the opt-out opportunity allows customers to refuse the sharing of their information with third parties, giving them control over their personal data. This mechanism is essential for maintaining customer trust and complying with legal obligations, ensuring that individuals have a say in how their information is used.

In contrast, while options like a legal warranty, confirmation of consent, or a written contract may be relevant in other contexts or industries, they are not standard requirements specifically related to the disclosure of personal information by financial institutions. These do not address the specific protections and rights that are necessary in the context of individual privacy in the financial sector.