The American Fintech Council (AFC) has responded to the Consumer Financial Protection Bureau’s (CFPB) notice on the proposed rulemaking on personal financial data rights related to Section 1033 of the Dodd-Frank Act. Their letter was posted on Jan. 2. The AFC said the CFPB’s implementation of Section 1033 “represents the most significant and comprehensive step towards creating an ‘open banking’ ecosystem for the benefit of consumers.”
“Our members are setting the standard for the responsible use of consumer data and utilizing innovation to increase competition in the financial services industry to improve access, particularly to families historically underserved,” said AFC CEO Phil Goldfeder. “Thank you to Director Chopra and the team at the CFPB for allowing us to collaborate on this historic effort. We look forward to our continued partnership on this and many other proposals.”
According to the AFC, the CFPB has stated that it aims to finalize the rule in 2024. It would formally establish consumers’ rights to control and securely share their financial data, while accelerating open banking in the United States. “Many market participants have already sought to develop technologies and standards to facilitate consumer access to personal financial data,” the CFPB stated in their introduction. “The CFPB intends to accelerate the shift to a more open and decentralized system through the issuance of a final rule.”
“AFC supports the goals of the Proposed Rulemaking to codify consumers’ rights to access and control their financial data, as well as advance competition through a broader range of markets due to the availability and transferability of this data by consumers.” wrote AFC SVP and Head of Policy and Regulatory Affairs Ian P. Moloney in the organization’s recent letter to the CFPB, “AFC, and its members strongly support consumers’ rights to make their own choices regarding their data and to grant access to data providers that they deem beneficial.”
The AFC still shared what they said are significant concerns with the lengthy proposal. They include the scope and coverage of the Proposed Rulemaking, limitations imposed on data providers and third parties regarding the acceptable use of consumer data, a framework for establishing and recognizing standard-setting bodies as issuers of qualified industry standards for consumer data, and reauthorization requirements.
In addition to identifying the concerns, AFC said it provided recommendations on how the CFPB could address those issues. The AFC noted the importance of ensuring that the “CFPB does not unnecessarily restrict the legitimate use of consumer data in a manner that limits the offering of responsible, innovative products and services to the detriment of consumers.”
“AFC and its members seek to ensure a competitive, consumer-protected open banking ecosystem,” Moloney added in the AFC submission. “The CFPB, through its Proposed Rulemaking, has the opportunity to ensure that the U.S. open banking ecosystem effectively meets its underlying goals of ensuring consumer access to their data and improving competition in the financial services industry while also continuing to meet the agency’s mission as designated under the Dodd-Frank Act.”