The Consumer Financial Protection Bureau yesterday started the rulemaking process seeking to codify consumers’ rights to their financial records. In releasing an Advanced Notice of Proposed Rulemaking, the CFPB is continuing a process that it started several years ago to help it understand how it should implement such a rule, which it is required to do under the Dodd-Frank Act.
A 90-day comment period will be open for the ANPR, which is available by clicking here.
Data has become a huge commodity, especially in the financial services industry. Every interaction a consumer has with a financial services provider, be it a collection agency, a bank, or a consumer finance company, generates data that can be used to analyze consumer behavior and predict future activity. From knowing a consumer’s communication preference to predicting whether a consumer is getting ready to apply for a mortgage can be influenced by the data that exists and is shared by participants in the industry.
In issuing the ANPR, the Bureau said it do so because it was “determined to commence a process that ultimately could lead to regulations that clarify the Bureau’s compliance expectations and help to establish market practices to ensure that consumers have access to consumer financial data.”
The ANPR includes 46 different questions that the Bureau is looking to have answered. The questions are grouped into nine categories — costs and benefits of consumer data access, competitive incentives, standard-setting, access scope, consumer control and privacy, other legal requirements, data security, data accuracy, and other information.
Acknowledging that the financial services industry has done a decent job so far of policing itself in this area, the CFPB said it would avoid placing an “undue” burden on the companies it regulates.
“In considering potential interventions, the Bureau will be mindful of avoiding undue or unnecessary burden on industry, particularly in light of self-regulatory standard-setting work that a broad group of market participants has conducted and continues to conduct and other initiatives that may help to foster a safe consumer-authorized data sharing ecosystem,” the CFPB said in the ANPR.