Representative McHenry’s bill falls short of what’s needed to protect consumers’ financial information and limits states’ ability to adopt stronger safeguards
WASHINGTON, D.C. – Consumer Reports called on the House Financial Services Committee today to strengthen a bill introduced by Representative Patrick McHenry so that it better protects consumers’ sensitive financial data. In a letter sent to the Committee, Consumer Reports noted that the bill does not go far enough to protect consumers’ financial information and would do more harm than good by limiting states’ ability to enact their own financial privacy protections.
The Committee is holding hearing on “Revamping and Revitalizing Banking in the 21st Century” this morning at 10am ET which can be accessed via livestream. The hearing will examine consumer data privacy and how banking regulations should be updated to keep pace with existing and emerging technologies among other issues.
Consumer Reports’ letter to the Committee notes, “The bill’s new privacy rights still place too much burden on consumers to navigate confusing disclosures and exercise various opt-out rights one-by-one. This discredited notice-and-choice approach will do little to practically protect most consumers’ personal information. This approach stands in stark contrast to the approach of the bipartisan American Data Privacy and Protection Act (ADPPA) which passed the Energy and Commerce Committee by a 53-2 vote last summer and prohibited most secondary use and sharing of personal data by default.”
CR’s letter continues, “Worse, while this bill does not fundamentally rein in unwanted data processing or practically empower consumers to do so themselves, it would then prohibit any state from enacting more fulsome protections…States have long been on the cutting edge of privacy protection, with many states in recent years adopting comprehensive privacy protections as Congress has struggled to enact its own protections. Consumer privacy will overall be worse if this bill’s incremental privacy improvements are paired with new state preemptions provisions.”
Consumer Reports has advocated for privacy protections that go beyond disclosure and notice provisions to ensure consumers have a meaningful opportunity to engage with their data, restrict the sharing of their data for uses that are not necessary to use a financial product or service, and delete their data.
In January, CR urged the Consumer Financial Protection Bureau to adopt strong rules that protect consumers’ privacy and prevent their data from being shared without rigorous informed consent. The CFPB is considering options for a proposed personal financial data rulemaking as required under Section 1033 of the Dodd-Frank Act.
Michael McCauley, email@example.com, 415-902-9537