CFPB developing proposal on who can access customer data
The Consumer Financial Protection Bureau is seeking comment on rules governing how third-party providers can access consumers' financial data.
The agency's advance notice of proposed rulemaking is the first step in implementing Dodd-Frank Act standards on consumers' access to their own financial records. The CFPB proposal is expected to draw enormous interest from both banks, which have at times been leery of third-party providers' access to consumer data, and fintech firms that rely on consumers’ ability to access data.
The bureau said it is seeking information on how to implement financial record-access rights efficiently, including the potential risks to consumers in authorizing access to third-party data providers.
"When consumers use financial products and services, the providers of those products and services generally accumulate data about those consumers and their use of those products and services," the bureau said in a press release. "Consumer access to these data allow consumers to manage their financial accounts and can enhance consumers’ control of their financial matters."
The bureau said it is trying to determine the scope of data that falls under the rule, as well as who should be held accountable for data errors and for providing unauthorized access to a consumer's records.
“There are indications that some emerging market practices may not reflect the access rights described in section 1033” of Dodd-Frank, the bureau said in its 34-page notice.
The CFPB said it is also interested in whether regulatory uncertainty about section 1033 may affect the market to the detriment of consumers.
Richard Hunt, president and CEO of the Consumer Bankers Association, said many banks support the CFPB’s efforts to address data collection and aggregation.
“Banks are already subject to strict data protection guidelines and believe consumers would be best served by having a uniform standard across financial platforms,” Hunt said in a press release. “This rulemaking effort is an important step in establishing those uniform consumer protections.”
While consumer access to financial records can enable the development of innovative and beneficial consumer financial products, the CFPB said it also comes with risks.