WASHINGTON—The CFPB needs to watch for “supervisory gaps” when it comes to better understanding data broker practices, according to a letter sent by NAFCU in response to the Bureau’s request for information (RFI).
The RFI defined data brokers as firms that collect, aggregate, sell, resell, license, or otherwise share consumers’ personal information with other parties, such as those that specialize in preparing employment background screening reports and credit reports.
NAFCU noted that credit unions rely on data aggregators to help understand members better, alternative data, verifying personal information, and detecting fraud.
‘Don’t Increase Regulator Burden’
“Attention to potential supervisory gaps among data aggregators, brokers, and other entities engaged in the collection and sale of consumer financial information is commendable and necessary to ensure a level playing field exists within the financial services industry,” wrote NAFCU Senior Counsel for Research and Policy Andrew Morris in the letter. “However, the CFPB’s application of the Fair Credit Reporting Act (FCRA) to specific types of information collection should neither impair credit unions’ access to data which is necessary to remain competitive, nor increase regulatory burdens for institutions already subject to the Gramm-Leach-Bliley Act (GLBA), the FCRA, and the bureau’s regulations,” added Morris.
Other Points Addressed
In the letter, NAFCU addressed:
- National data security standards
- Implementation of Section 1033 of the Dodd-Frank Act must account for gaps in data aggregator supervision
- Why the CFPB should not pursue policies that impair financial institution access to data markets or introduce additional regulatory burdens for credit unions.
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