WASHINGTON—NAFCU and CUNA have joined with several other trade associations that include the American Bankers Association in signing a petition asking the CFPB to initiate a rulemaking, under section 553(e) of the Administrative Procedure Act (APA) to define the “larger participants” in the market for data aggregations services that will be subject to CFPB supervision.
The filing marks the first time any of the groups have utilized the CFPB's petition process since it was updated in February.
In their petition, the organizations pointed to what they called the robust technological expansion that has led to an increase in demand for consumer financial data and expressed support for allowing consumers access to financial data that both “protects and empowers” them. Section 1033 of the Dodd-Frank Act requires the Bureau to grant consumers the ability to obtain financial data access regarding any transaction.
The groups urged the CFPB to “ensure that data aggregators and data users that are larger participants in the aggregation services market – not just banks and credit unions – are examined for compliance with applicable federal consumer financial law.”
“By the nature of their business, data aggregators hold a tremendous amount of consumer financial data,” wrote the trades groups.
‘Unaware of Activities’
“While consumers may consent to the sharing of their financial data, many of these same consumers are unaware of the activities in which these intermediaries engage, how the information is being collected, and how the data may be used or shared,” the groups told the CFPB.
The Bureau stated that while the use of consumer financial data by financial institutions could lead to improved and innovative consumer financial products, there are still several data privacy and security concerns to consider.
The petitioning organizations added, however, that while typical data holders, such as banks and credit unions, are regularly subject to CFPB supervision, “non-depository institutions such as data aggregators and data users are not,” which the trades say creates a “supervisory imbalance.”