On October 27, 2022, the CFPB published an outline of proposals and alternatives under consideration for the required rulemaking on personal financial data rights. The CFPB outlined options to strengthen consumers’ access to, and control over, their financial data as a first step before issuing a proposed data rights rule that would implement section 1033 of the Dodd-Frank Act. Under the options the CFPB is considering, consumers would be able 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 CFPB believes that data now affects nearly all aspects of human life, including in banking, and that digital technology is transforming the markets. Big banks, financial tech companies, incumbents, and small start-ups are all vying to be at the top among their competitors. The CFPB’s rulemaking aims to create a marketplace where companies would need to improve their offerings to keep their customers. The Bureau intends to promote competitive prices, high-quality services, and improved products where consumers could switch providers to get a better deal or escape poor customer service.
According to the CFPB, if the issued proposal is finalized, the rule would require firms to make a consumer’s financial information available to them or to a third party at that consumer's direction. The outline includes a proposal that would 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. The CFPB is also considering proposals that would 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 rulemaking process will include panel convenings to seek feedback from small entities on the proposals under consideration. Other stakeholders may also provide written feedback on the CFPB’s outline until January 25, 2023.
The CFPB’s announcement can be found here.
The outline of proposals can be found here.