The federal agency charged with consumer financial protection on Thursday said it’s taking a step forward toward an eventual rulemaking on consumers’ access to their financial data, as authorized by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
The Consumer Financial Protection Bureau (CFPB) released an outline of options (“proposals and alternatives”) it is considering for a future rulemaking on consumers’ data rights that would enable consumers to more easily and safely walk away from companies offering bad products and poor service “and move towards companies competing for their business with alternate or innovative products and services.”
The agency said companies today compile “vast troves” of personal data, including information about people’s use of financial products and services; and that by monopolizing such data, they are able to block competitors’ access to potential customers and stifle competitors’ product and service development. “In addition, data protection concerns have contributed to a lack of trust among market participants, and a growing sense of powerlessness among the general public,” it said. “Clear data rights for consumers have the potential to give individuals more bargaining leverage.”
The future rulemaking would implement authority provided the bureau under section 1033(a) of Dodd-Frank. The bureau said Thursday’s outline of proposals and alternatives will be shared with potentially affected small entities through “panel convenings,” with input from that discussion considered by the CFPB as its prepares a proposed rule.
The CFPB, in its announcement, highlighted two of the aims of its outlined proposals:
- To empower consumers who want to switch providers to transfer their account history to a new company so they do not have to start over if they are unsatisfied with the service provided by an incumbent firm; and
- To include important options around privacy for personal financial data authorized for third-party use, including limitations that would prevent third parties from reselling authorized data for other uses.
The agency, in its outline, said the panel convenings are to comply with the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), which amended the Regulatory Flexibility Act.