washington d.c. – Today, the Consumer Financial Protection Bureau (CFPB) outlined options to strengthen consumers’ access to and control over their financial data as a first step before releasing a proposed data rights rule which would implement Section 1033 of the Dodd-Frank Act. Under the options being considered by the CFPB, consumers would be able to more easily and safely walk away from companies offering bad products and poor service and turn to companies that compete for their business with products and services. alternative or innovative.
“Dominant companies should not be able to hoard our personal data and appropriate its value,” CFPB Director Rohit Chopra said. “The CFPB’s personal financial data rights regulation has the potential to reinvigorate competition, giving Americans new options for financial products.”
Data now touches nearly every facet of the human experience, including banking. Digital technology is transforming markets, including how payment, deposit and lending services are provided and who provides them. Big banks, fintech companies, incumbents and smaller start-ups are jostling to be ahead. Today’s kickoff begins the process of breaking down barriers to more competition and consumer choice.
This regulation aims to create a market where companies should improve their offers to retain their customers. Fledgling companies could use consumer-authorized data to create and scale products and services that can compete with large incumbents. Consumers might switch providers to get a better deal or escape poor customer service, and businesses should retain and attract customers through competitive pricing, high-quality services, and improved products.
The current environment illustrates the imperative of this regulation. Companies compile vast amounts of personal data, including information about people’s use of financial products and services. By monopolizing the use of personal financial data, financial institutions are able to block competitors’ access to potential customers and stifle the development of competitors’ products and services. Additionally, data protection concerns have contributed to a lack of trust among market participants and a growing sense of helplessness among the general public. Clear data rights for consumers have the potential to give individuals greater bargaining power.
The document released today is an overview of the proposals and alternatives under consideration for CFPB data rights regulation. If today’s proposal is finalized, the rule would require businesses to make a consumer’s financial information available to them or to a third party at that consumer’s request. As outlined, the CFPB is considering proposals, for example, that would allow consumers who want to switch providers to transfer their account history to a new company, so they don’t have to start over they are not satisfied with the service provided. by a licensed company. The CFPB is also considering proposals that would include significant privacy options regarding personal financial data authorized for use by third parties, including limitations that would prevent third parties from reselling authorized data for other uses.
The rule-making process will include convening expert panels to gather feedback from small entities on the proposals under consideration. Later, the committee will prepare a report on the comments received from the small entities, and the CFPB will consider the comments when developing a proposed rule.
Other stakeholders may also provide written comments on the CFPB plan. Comments should be emailed to [email protected] no later than January 25, 2023.
Read the Overview of proposals and alternatives under consideration by the CFPB, Small Business Review Advisory Group for Developing Required Personal Financial Data Rights Rules .
Other related documents are available on our create rules page.
Read Director Chopra’s Remarks on Regulating Personal Financial Data Rights.
Consumers can file complaints about financial products and services by visiting the CFPB website or by dialing (855) 411-CFPB (2372).
Employees who believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to [email protected].
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal consumer finance law and ensures that markets for consumer financial products are fair, transparent and competitive. For more information, visit consumerfinance.gov.