CFPB Launches Rulemaking Process to Strengthen Personal Financial Data Rights
The Consumer Financial Protection Bureau (CFPB) recently launched a rulemaking process which it says is intended to help strengthen consumers’ control over and access to their financial data. It would allow consumers to safely walk away from companies with bad services and products and move toward companies using unique and innovative products and services.
“Dominant firms shouldn’t be able to hoard our personal data and appropriate the value to themselves,” said CFPB Director Rohit Chopra. “The CFPB’s personal financial data rights rulemaking has the potential to jumpstart competition, giving Americans new options for financial products.”
Under this rulemaking, companies would have to improve their offerings to keep consumers with high-quality services, improved products, and competitive prices. Newer companies would be able to use consumer-authorized data to compete with larger companies, and consumers would be able to easily switch providers to get a better experience.
Many financial institutions currently monopolize a lot of personal consumer data to block the development of any products and services from competitors. Consumers have also been concerned about data protection, so clearer data rights would give consumers more power and bargaining leverage.
If the CFPB’s rulemaking is finalized, companies would be required to make consumers’ financial data available to them or a third party. Additionally, the CFPB is considering proposals that would include privacy options for consumers’ financial data being authorized for third party use.
The rulemaking process will include panel convenings to get feedback on the proposals from small entities, and the panel will develop a report based on that feedback so the CFPB can prepare a proposed rule.