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Understanding Nonaffiliated Third Party in Banks & Banking Law
Definition & Meaning
A nonaffiliated third party refers to any individual or entity that is not connected to a financial institution through ownership or control. Specifically, it excludes:
Affiliates of the financial institution.
Individuals employed jointly by the financial institution and another company that is not an affiliate.
Additionally, it includes companies that may be considered affiliates solely due to ownership or control related to specific banking or investment activities.
Table of content
Legal Use & context
This term is commonly used in the banking and financial sectors, particularly in relation to privacy regulations and consumer protection laws. It is relevant in contexts such as:
Privacy of consumer financial information.
Disclosure of information to third parties.
Regulations governing financial transactions.
Users may encounter forms or procedures related to nonaffiliated third parties when dealing with financial institutions, and they can utilize US Legal Forms templates to navigate these processes effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A bank shares customer information with a marketing firm that is not affiliated with the bank. This firm qualifies as a nonaffiliated third party.
Example 2: A financial institution collaborates with a technology company to develop an app, but the technology company operates independently and is not controlled by the bank. This company is also a nonaffiliated third party.
Relevant laws & statutes
The definition of nonaffiliated third party is primarily governed by:
12 CFR 332.3 - Privacy of Consumer Financial Information.
Bank Holding Company Act of 1956 (12 U.S.C. 1843).
Comparison with related terms
Term
Definition
Difference
Affiliate
A company or entity that is linked to another through ownership or control.
Nonaffiliated third parties are not connected through ownership.
Joint Employee
An employee who works for two different companies simultaneously.
Nonaffiliated third parties can include companies that employ joint employees.
Common misunderstandings
What to do if this term applies to you
If you are dealing with a nonaffiliated third party in a financial context, consider the following steps:
Review any agreements or disclosures related to the sharing of your financial information.
Utilize US Legal Forms to access templates that can help you manage your rights regarding your information.
If you have concerns or complex issues, consult with a legal professional for tailored advice.
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