The American Fintech Council (AFC) has submitted its response to the Consumer Financial Protection Bureau (CFPB) on its open banking proposal.
The CFPB proposed a change on personal financial data rights implementing Section 1033 of the Dodd-Frank Act. It has stated that it aims to finalise the rule in 2024, formally establishing consumers’ right to control and securely share their financial data and 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,” wrote the CFPB in their introduction to the rulemaking. “The CFPB intends to accelerate the shift to a more open and decentralized system through the issuance of a final rule.”
“Our members are setting the standard for the responsible use of consumer data and utilising innovation to increase competition in the financial services industry to improve access particularly to families historically underserved,” said Phil Goldfeder, chief executive officer of AFC. “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.”
“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 Ian P. Moloney, SVP, head of policy and regulatory affairs, in AFC’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.”
Hurdles ahead
The AFC applauded the CFPB for the effort in their nearly 300-page proposal. However, it also identified some significant concerns regarding the
- Scope and coverage of the proposed rulemaking
- Limitations imposed on data providers and third parties regarding the acceptable use of consumer data
- Framework for establishing and recognising standard-setting bodies as issuers of qualified industry standards for consumer data
- Reauthorisation requirements
In addition to identifying the concerns, AFC provided specific recommendations on how the Bureau could remedy these issues. As a result, it will strengthen the initiative. Specifically, AFC noted the importance of ensuring that 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,” concluded Moloney in the AFC submission. “The CFPB, through its Proposed Rulemaking, has the opportunity to ensure that the US 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.”
