How do FACT Act provisions balance privacy and security objectives?

• A. By expanding marketing uses and sharing of information.
• B. By mandating encryption of all data at rest but ignoring other protections.
• C. By eliminating all data-sharing with third parties.
• D. By restricting marketing uses and sharing of information while establishing safeguards, dispute rights, and breach notifications.

Answer: (D)

Balancing privacy and security is achieved by restricting marketing uses and sharing of information while establishing safeguards, dispute rights, and breach notifications. Limiting how nonpublic personal information can be used for marketing and shared with third parties gives consumers more control over their data, protecting their privacy. At the same time, requiring safeguards helps prevent unauthorized access, breach notifications keep consumers informed so they can act quickly, and dispute rights ensure the accuracy of the information that lenders rely on. This combination lets privacy objectives be respected without neglecting the security measures and consumer protections needed to respond to incidents and maintain data integrity. Other approaches either expand data use, ignore protections beyond encryption, or eliminate data sharing entirely, which don’t adequately balance privacy with security.