Late in 2022, the CFPB outlined rule-making proposals regarding consumers’ access to and control of their financial data as part of the implementation of Section 1033 of the Dodd-Frank Act. The CFPB’s upcoming proposals would change the control firms, primarily large banks, have over personal financial data.
Companies would be obligated to provide all the account information at a consumer’s request either directly to the consumer or a 3rd party the consumer authorizes to have access. These new rules would thus give the consumer more freedom in transferring their account and fund history to a new financial institution if desired. Rohit Chopra, CFPB’s Director sees this regulation as serving to limit dominant firms’ ability to hoard consumer personal data for their own benefit and keep clients from easily switching firms. These rules aim to promote more robust competition in a marketplace, such that banks and firms will need to improve their service and offerings to maintain customers.
Despite this, some associations such as the American Banker’s Association (ABA) and ICBA have expressed concerns over these proposed data-sharing rules. They worry about the rules not adequately addressing data security, fraud and liability, and thus putting consumers’ personal data at risk.
This new regulation if enacted will clearly have a huge impact on financial services industry during a time when data privacy issues prevail as a constant concern.
Stay tuned for more updates on progress of these proposed rule changes and the impact it could have on your team.
