The American Bankers Association and three financial sector associations urged the Consumer Financial Protection Bureau to give financial institutions at least two years to comply with its proposed financial data-sharing regulation, which would implement Section 1033 of the Dodd-Frank Act. In a joint letter, the associations said that as they have analyzed the proposal, it has “become even more clear” that once a final rule is issued, “banks likely will have to make complex and time-intensive changes to their systems and processes to implement, and create associated controls to ensure ongoing compliance with, the requirements of a final rule.”
The CFPB in June issued a partial final rule establishing the qualifications that organizations must meet to become recognized standard-setting bodies under the regulation. It is currently in the process of finalizing the remaining portions of the proposed rulemaking to address electronic access to financial data by consumers and their agents.
The associations said that in addition to the work that banks must undertake to comply with the final rule, it will require extensive coordination between different private entities to amend existing agreements or put in place new or revised technology protections. They also raised concerns about the amount of time needed to establish standards-setting procedures.
“Based on our best estimates of the work that will need to be completed, we believe that a period of at least two years after the issuance of a final rule would be appropriate,” the association said. “This will allow customers of these institutions… to reliably continue enjoying the benefits of data sharing.” They also recommend extending the compliance deadlines for subsequent groups of entities by 18 months.
If accepted, banks with at least $500 billion would have two years after the final rule is published in the Federal Register to comply; banks with at least $50 billion but less than $500 billion would have two and a half years; banks with at least $850 million but less than $50 billion would have four years; and banks with less than $850 million would have five and a half years.
