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Why Do Banks Share Your Financial Information and Are They Allowed To?

GAO WatchBlog  – In a word: yes. If you’ve ever applied for a loan, you know that banks and credit unions collect a lot of personal financial information from you, such as your income and credit history. And it’s not uncommon for lenders to then share your information with other vendors, such as insurance companies after the loan is finalized. But why do banks and credit unions share your information and what protections are available to consumers to ensure their privacy? Today’s WatchBlog explores our new report on this issue. You can also tune in to our new podcast with GAO consumer protection and privacy experts Alicia Puente Cackley and Nick Marinos to learn more. What types of information do banks collect and why? Banks and credit unions collect and use many types of personal information to conduct everyday business activities and to market products and services. The information banks collect may be used to create bank statements, monitor for fraud, and determine credit eligibility. Banks and credit unions also gather information about consumers’ online activities. This information may not identify an individual, but can be used for marketing. For example, when consumers access a financial institution’s website and use mobile or online services, banks and credit unions collect information about their social media and browsing activities, type of computer or mobile device, and network address. Banks mainly use this information to ensure their websites function properly, detect and prevent fraud, and per our report, to tailor advertisements…”

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