ABA to CFPB: Tread Carefully on Personal Financial Data Rulemaking

In a new comment letter filed today, the American Bankers Association urged the Consumer Financial Protection Bureau to “tread carefully” in its rulemaking under Section 1033 of the Dodd-Frank Act and to “recognize the deep complexities at the heart of personal financial data rights and the need to strike a harmonious balance between consumer interests and a feasible construct for businesses operating in this space.”

The letter highlights key areas that ABA believes are unaddressed or inadequately treated by the CFPB’s Outline of Proposals and Alternatives Under Consideration for the rule and again urges the CFPB to ensure that larger data aggregators and recipients are subject to the same level of regulation as banks. In August 2022, ABA and other trade groups formally petitioned the CFPB to initiate a rulemaking to define “larger participants” in the data aggregation services market that should be subject to ongoing supervision by the Bureau for compliance with the rule when it is final.

“ABA believes the highest priority, and a necessary precondition to finalizing data sharing standards, is ensuring that data aggregators and data recipients that are larger participants in the aggregation services market are examined for compliance with applicable federal consumer financial law. We reiterate our call for the CFPB to initiate a larger participant rulemaking. Without regular and ongoing supervision of larger data aggregators and data recipients, implementation of Section 1033 will increase the risk of harm to consumers and competition,” ABA argues in the letter.

The letter concludes:

“Banks have long been leaders in the fields of privacy, security, and dispute processes for their customers; recent entrants to the financial services industry must be held to similar standards. The CFPB should ensure that the same activities are subject to comparable regulation and supervision to avoid the potential for consumer harm and confusion that result from an unlevel playing field. Before the CFPB moves forward with a proposed rule to implement Section 1033, it must carefully consider the goals of the statute and establish a workable governance structure in which to achieve them.”

Read the full comment letter.