The Consumer Financial Protection Bureau proposed rulemaking on personal financial data rights will have significant compliance costs for banks, but it also presents potential opportunities, American Bankers Association VP Ryan Miller writes in a new opinion column for American Banker. The proposal—which would implement Section 1033 of the Dodd-Frank Act—creates new standards for data providers, data aggregators, and data recipients that share and obtain financial information pursuant to consumer consent.
“In short, banks can use consumer-permissioned data to develop the kinds of innovative products and services their customers (existing and prospective) want,” Miller writes. “Common use cases include novel types of lending products to reach new markets, personal financial management to find ways to improve financial awareness and health, market-tailored platforms (such as restaurants) to reflect preferences and many more.”
Still, it is not known how the specifics of the proposed rule will land when the final rule is released, Miller said. “What is clear is that third parties as a class will be expected to have formalized workstreams in place when accessing a consumer’s financial information. This is familiar territory for banks; if they identify viable use cases for receiving consumer-permissioned data, they are well equipped to operationalize it in a compliant manner. And, what’s more, banks will be held to account as part of the rigorous supervisory process they undergo. Alas, the same cannot be said for many third parties operating in the ecosystem.”
