The American Bankers Association this week raised concerns that several aspects of the CFPB’s proposal to implement Section 1033 of the Dodd Frank Act—which governs financial data sharing—”may appear reasonable in the abstract but will break down in practical application.” The association offered several recommendations for improving the effectiveness of the proposal, while emphasizing that the CFPB failed to provide adequate time for public comment given the rule’s scope.
Broadly, ABA called on the CFPB to: create a final rule that comports with the bounds of authority delegated to it by the 1033 statute; take a more active role in managing the data-sharing ecosystem it is creating with the rule, while giving banks sufficient flexibility to manage risk and prevent fraud; clarify that data providers making information available pursuant to Section 1033 are not furnishers under the Fair Credit Reporting Act; and make changes to the proposal to avoid confusion or otherwise ensure the practical operationalization of the rule. Further, ABA highlighted the importance of private industry standards and asked the CFPB to revisit the timeframes for compliance.
ABA also urged the CFPB to “strictly construe Congress’ grant of authority under Section 1033 and ensure that the personal financial data rights final rule is limited to facilitating access to consumer information, rather than extending it to effectuate transactions,” calling specifically for the CFPB to strike provisions from the notice of proposed rulemaking that would mandate conducting payments. ABA also urged the removal of other proposed data fields, such as “authorized but not yet settled debit card transactions,” “terms and conditions,” and “upcoming bill information.”
Finally, ABA called on the CFPB to remove the proposed prohibition on fees and permit recoupment of costs. “In essence, data providers are compelled under penalty of noncompliance to subsidize the business models of data aggregators and third parties seeking to monetize the information,” ABA explained. “It represents nothing less than a forced transfer of value.”
