Washington, D.C. – BPI today filed a comment letter responding to the Consumer Financial Protection Bureau’s Advance Notice of Proposed Rulemaking (ANPR) seeking input on implementation of Section 1033 of the Dodd-Frank Act, which relates to consumer access to financial records.
“The CFPB has the opportunity here to enhance consumer protections, including making sure consumers have transparency about how their data is being accessed, shared and used,” said Naeha Prakash, Associate General Counsel and Senior Vice President for Consumer Regulatory Affairs at BPI.
Data aggregators link to customers’ bank accounts and shuttle their financial data between different platforms, such as payment apps, tax preparation tools or mortgage applications. These services allow for more seamless interactions between different financial apps, but can introduce potential risks where consumers’ sensitive financial information is shared with data aggregators and other fourth parties. BPI is supportive of the industry’s move towards more secure data sharing through an Application Programming Interface (API), which allows customers to be securely authenticated at their own financial institution rather than gaining access through re-entering usernames and passwords.
BPI made several recommendations to the CFPB in its comment letter, including:
- The CFPB’s efforts to set standards for consumer authorized data sharing should ensure sufficient flexibility and continued innovation in the marketplace, and any approach taken by the CFPB should be coordinated with the prudential regulators and the FTC.
- The CFPB should ensure a comprehensive approach to consumer privacy and transparency to increase consumer understanding of data use.
- The CFPB should ensure that data aggregators appropriately safeguard consumer data in a manner commensurate with the legal obligations placed on banks.
- The CFPB should clarify the rights of consumers and liability in cases of unauthorized transactions or fraudulent activity.
About Bank Policy Institute.
The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.