What is a key function of the Safeguards Rule in the GLB Act?

The key function of the Safeguards Rule under the Gramm-Leach-Bliley (GLB) Act is to outline data security measures for financial institutions. The Safeguards Rule requires these institutions to implement appropriate security programs to protect personal information of their customers. This includes developing a written information security plan that addresses potential risks, protecting sensitive customer data, and ensuring that third-party service providers also adhere to similar security standards.

The Safeguards Rule emphasizes the importance of preventing unauthorized access and ensuring the confidentiality of customer financial information, thereby promoting consumer trust in financial institutions. By setting clear expectations for how customer data should be secured, the rule plays a critical role in protecting against data breaches and ensuring compliance with privacy regulations.

In contrast, the other options relate to different areas of financial regulation. Mandating credit checks before issuing loans is not a primary concern of the Safeguards Rule but rather pertains to lending practices. Regulating interest rates for loans falls under different regulatory frameworks, typically managed by banking authorities rather than privacy legislation. Similarly, establishing guidelines for ATM operations is not directly related to data security measures but addresses operational standards for ATMs.