CR offers recommendations for strengthening proposal to give consumers greater access and control of their financial data
WASHINGTON, D.C. – In a comment letter submitted today to the Consumer Financial Protection Bureau, Consumer Reports highlighted its support for the Bureau’s proposed Personal Financial Data Rights Rule and ways it could be strengthened. The proposed rule would help consumers seek out better deals and services if they are unhappy with their bank or other financial institution and prevent misuse of their personal data.
“The CFPB’s proposed rule empowers consumers to take control of their financial data and leverage it to find better and more affordable financial products and services,” said Delicia Hand, director of financial fairness for Consumer Reports. “The rule establishes firm and clear guardrails to protect consumers, including appropriate constraints on companies that would be required to obtain express consumer consent to collect and use their data.
Under the CFPB’s proposed rule, consumers would have the ability to more easily access data about their use of checking and prepaid accounts, credit cards, and digital wallets and share it with third parties they designate at no charge. The proposal gives consumers the power to share their data to access new services and competing products, while limiting its use to that intended purpose and preventing it from being used for surveillance and manipulation by financial institutions or fintech companies. Consumers could revoke access to their data and require that it be deleted by third parties.
In its comment letter to the CFPB, CR highlighted a number of ways the proposal could be strengthened:
- Expanding the types of data providers covered by the rule to include nondepository entities such as payment service providers, credit bureaus, investment firms and brokers, fintech companies offering various products, and financial management and budgeting apps
- Including Electronic Benefit Transfer (EBT) card providers to help drive financial inclusion, welfare, and innovation for the more than 40 million Americans who rely on EBT cards for essential food and cash assistance
- Limiting exemptions for financial institutions that don’t provide digital financial services since broad exemptions would exclude consumers who lack access to these tools and reinforce systemic digital access inequity
- Including additional data that should be covered by the rule to make it easier for consumers to switch providers, such as account credentials, customer service history, and documents such as statements and contracts
- Requiring providers to make available 36 months of transaction data to support transaction-based underwriting, account switching, and other use cases
- Expanding the types of information that should be disclosed by providers under “terms and conditions” provisions to known categories of common fees, pricing, qualifications and product categories
- Maintaining important safeguards that protect consumers against risks of third-party access to their data, even when consumers have granted permission, including data minimization requirements to limit secondary uses of their data
For a more detailed explanation of Consumer Reports recommendations, see CR’s comment letter to the CFPB.
Michael McCauley, michael.mccauley@consumer.org