CFPB Eliminates Personal Financial Information Rights | So Good News
Washington, DC – Today, the Consumer Financial Protection Bureau (CFPB) outlined the steps that will enable consumers to access, and control, their financial data as a first step before issuing a data protection law that would implement section 1033 of the Dodd-Frank Act. Under the options the CFPB is considering, consumers can easily and safely move away from companies that offer bad products and services and go to companies that compete for their business with alternative or innovative products.
“Big companies shouldn’t be keeping our data for themselves,” said CFPB director Rohit Chopra. “Enacting the CFPB’s rules on financial services can open up competition, giving Americans new financial options.”
Data now affects almost every aspect of human life, including banking. Digital technology is changing markets, including how payment, booking, and rental services are provided and who provides them. Big banks, financial firms, incumbents, and small startups are all racing to stay ahead. Today’s startups begin the process of removing the stumbling blocks to more competition and consumer choice.
This implementation aims to create a market where companies will want to improve their offerings in order to retain their customers. Smaller companies can use consumer acceptance data to create and offer more products and services that can compete with larger incumbents. Customers may switch providers to improve profitability or avoid unnecessary customer service, and companies must retain and attract customers through competitive pricing, superior service, and quality products.
The current situation shows the importance of these laws. Companies collect personal information, including information about how people use financial products and services. By having the right to use financial data, financial institutions can prevent their competitors from finding potential customers and hinder the development of their competitors’ products and services. In addition, data protection concerns have contributed to a lack of trust between market participants, as well as an increase in power between individuals. Clearer data rights for consumers have the potential to give people more opportunities.
The document released today is an outline of the proposals and alternatives being considered for the CFPB’s rulemaking. If today’s proposal is finalized, the rule would require businesses to make consumers’ financial information available to them or to a third party in the consumer process. As described in the policy, the CFPB is considering proposals, for example, that would empower consumers who want to change providers to transfer their account history to a new company, so that they do not have to start again if they are not satisfied with the service provided. and the company in operation. The CFPB is also considering proposals that would include important decisions on the privacy of personal financial information authorized for use by third parties, including restrictions that would prevent third parties from reselling authorized data for other uses.
Legislation will include group meetings to get feedback from smaller groups on proposed proposals. After that, the panel will prepare a report on the submissions from the subcommittee, and the CFPB will consider the submissions when formulating a proposed rule.
Other stakeholders may also submit written comments on the CFPB’s policy. Comments should be emailed to [email protected] no later than January 25, 2023.
Read the CFPB’s Commentary on Proposals and Alternatives to Consider, Advisory Panel for Small Businesses on Essential Improvements to Financial Freedom .
Read about the CFPB Executive Summary and Discussion Guide to SBREFA’s Proposed Recommendations and Alternatives: Setting Basic Rules for Human Financial Rights .
Additional information is available on our rulemaking page.
Read Director Chopra’s comments on the development of financial data rights legislation.
Consumers can file complaints about products and financial services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees who believe their company has violated federal whistleblower laws are encouraged to submit information to [email protected]
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal consumer law and ensures that the consumer financial products market is fair, transparent, and competitive. For more information, visit Confinance.gov.