What was the 'Gramm-Leach-Bliley Act of 1999 - GLBA'
The Gramm-Leach-Bliley Act of 1999 (GLBA) was a regulation that Congress passed on November 12, 1999, which attempts to update and modernize the financial industry. The main function of the Act was to repeal the Glass-Steagall Act that said banks and other financial institutions were not allowed to offer financial services, like investments and insurance-related services, as part of normal operations.
The act is also known as Gramm-Leach-Bliley Financial Services Modernization Act.
BREAKING DOWN 'Gramm-Leach-Bliley Act of 1999 - GLBA'
Due to the horrific losses incurred as a result of 1929's Black Tuesday and Thursday, the Glass-Steagall act was created originally during the 1930s in order to prevent bank depositors from additional exposure to risk associated with stock market volatilities. As a result, for many years, banks were not legally allowed to act as brokers. Since many regulations have been instituted since the 1930s to protect bank depositors, GLBA was created to allow the financial industry to offer more services.