The Implications of the Federal Gramm-Leach-Bliley Act on the
Manufactured Housing Industry
During recent years, most individuals have been inundated
with privacy disclosures from banks, insurance providers, credit card issuers,
and other businesses. The Gramm‑Leach‑Bliley Act (the "GLBA") is a federal law
that requires various types of businesses to provide their written privacy
policy to their customers. The GLBA, as currently written, applies to numerous
businesses associated with the manufactured housing industry.
The original intent of the GLBA was to target banks, credit
card issuers, insurance businesses and similar financial institutions.
Unfortunately, the legislation was written with such broad language that it has
created confusion as to the scope of businesses to which it applies. The GLBA
imposes disclosure obligations on any business classified as a financial
institution. The confusion stems from the overly broad definition of the term
"financial institution", which is essentially any business that is significantly
engaged in financial activities, including but not limited to, extending credit,
servicing loans, lending money, insuring against loss, providing financial
investment services, leasing real property on a non‑operating basis, collection
services, and similar activities Since this is such a new law, there is very
little guidance available to determine who falls within the guidelines for
complying with the GLBA.
Manufactured home brokers, dealers, lenders, insurers and
others who are involved in the retail and financial end of the industry will
generally be required to comply with the GLBA. For example, the following types
of activities are just some of the activities that can subject a business to the
requirements of the GLBA:
servicing loans for your own account or for the account
processing loan applications for your own account or on
behalf of a third party lender,
other similar activities.
Generally, landlords of
manufactured home communities are not subject to the GLBA, provided that they
are not directly or indirectly involved in operating, servicing, maintaining or
repairing the leased property and common areas. For those landlords that also
sell manufactured homes by issuing credit or processing loan applications, the
GLBA would apply.
The Federal Trade Commission ("FTC") is the governmental
agency that enforces the GLBA. If your business is subject to the GLBA, the law
requires you to issue various written disclosures to your customers depending on
the particular nature of your business and the manner in which you use
information about the customer. The deadline for complying with the initial
disclosure requirements was July 1, 2001. If the GLBA applies to your business,
and if you have not already complied, you would be well advised to immediately
draft and issue the required disclosures. Further, you must continue to
comply with the disclosure obligations in the future. If you are uncertain
whether the GLBA applies to your business, if you are unsure of the proper type
of disclosures to issue or if you have specific questions, you should consult
with an attorney knowledgeable of the GLBA.
article was originally published in 2008.