CR offers recommendations for strengthening proposal to protect consumers’ financial data
WASHINGTON, DC – In a comment letter submitted today to the Consumer Financial Protection Bureau (CFPB), Consumer Reports (CR) shared its support for the CFPB’s proposed rule to supervise the operations of larger companies in the digital payments market and suggested ways to strengthen the rule. CR applauds the CFPB for taking this important step and advocates for strong consumer data protections.
CR has reviewed various peer-to-peer payment applications and found they are associated with multiple risks, such as losing money through fraud or mistakes or having personal data collected and shared with other companies. Over 25,000 consumers have signed CR’s petition urging the CFPB to require peer-to-peer app companies to aggressively investigate fraud reports and reimburse anyone they determine was fraudulently induced into sending money to scammers. The petition additionally calls for limiting the collection and storage of consumer information in payment applications beyond what is needed to provide the payment service.
Ryan Reynolds, Financial Policy Analyst for Consumer Reports, said: “Consumer Reports strongly supports the CFPB’s efforts to supervise larger participants in the digital payment apps market. This rule is an important step in protecting consumers who use payment apps to transfer funds and facilitate payments.
“We encourage the CFPB to explicitly clarify in the final rulemaking that the rule will not preempt or undermine any state-level privacy and data standards that protect consumers’ financial information. Consumers’ financial well-being and security go hand-in-hand and must always be a top priority.”
CR offers the following recommendations to strengthen the proposal to protect consumer data privacy:
- Consumer Reports recommends that the CFPB expressly specify that continued compliance with existing state privacy laws is mandatory until separate rulemaking establishes equivalent data safeguards.
- The CFPB should coordinate with state regulators—such as state attorneys general enforcing state privacy laws—to ensure harmonization of federal and state regulatory landscapes to avoid gaps in data privacy coverage or the easing of established consumer protections. Consumer Reports encourages the Bureau to seek public comment on how best to accomplish this.
Media Contact: Emily Akpan, emily.akpan@consumer.org