The Gramm-Leach-Bliley Act was enacted in 1999 and repealed the Glass-Steagall Act of 1933. The GLBA created a new regulatory regime for the financial services industry and allowed banks, securities firms, and insurance companies to affiliate with one another.
The GLBA was a response to changes in the economy and technology that had rendered the Glass-Steagall Act obsolete. The internet had made it possible for consumers to shop around for financial products and services, and banks were offering more sophisticated investment products. At the same time, there was increased competition from nonbank financial institutions such as securities firms and insurance companies.
The GLBA did not fully deregulate the financial services industry; rather, it created a new framework within which banks could compete with other types of financial institutions. The act required that affiliated companies disclose their relationship to customers so that customers could make informed decisions about whether to do business with them. In addition, the act established safeguards to protect customer information from being shared between affiliates without consent.