The American Bankers Association today joined four banking and credit union associations in correcting the record about several falsehoods made by financial technology and retail groups regarding the Consumer Financial Protection Bureau’s Section 1033 data sharing rule.
The 2024 rule implemented Section 1033 of the Dodd-Frank Act, which requires banks and other financial institutions to make a consumer’s financial information available to them or a third party at the consumer’s direction. The CFPB’s current leadership in June asked a federal court to vacate the rule to end a lawsuit brought by the Kentucky Bankers Association and others, who argued it jeopardized consumers’ privacy and account security. More recently, the Financial Technology Association, National Retail Federation and other fintech and retail groups sent President Trump a letter asking him to uphold the rule amid “anti-competitive moves” by banks.
In a joint statement, ABA, the Bank Policy Institute, America’s Credit Unions, the Consumer Bankers Association and the Independent Community Bankers of America corrected what they said were several misstatements in the letter. Among other things, they noted the rule was proposed by the Biden administration, and said it puts sensitive consumer data at risk by requiring banks to share consumer data with fintechs and aggregators without establishing fundamental data security safeguards. They also said banks and credit unions employ robust data security practices to protect customer data, while many fintechs and data aggregators do not, which puts customer data at serious risk.
“A robust, competitive data-sharing environment already exists in the U.S., and it’s working,” the associations said. “Consumers have more than 4,000 banks, 4,000 credit unions and thousands of fintech companies to choose from when it comes to managing their finances, saving for retirement, preparing their tax returns or making payments. The current data-sharing ecosystem grew out of heavy investment from banks and credit unions in developing systems and establishing partnerships with fintechs.”
