All Banking Law, All in One Place. Bloomberg Law: Banking is the comprehensive research solution that powers your practice with access to integrated banking-related legal news, analysis,...
By Jeff Bater
Nov. 17 — A banking industry group is urging the Consumer Financial Protection Bureau to avoid new regulation as the agency opens an inquiry about the shared use of consumers’ digital financial records.
The CFPB is investigating the obstacles that consumers face sharing their online banking information with third parties—such as apps or websites that provide budgeting or tax advice. The agency has expressed concern that banks are blocking the flow of information that consumers agree to share, such as account balances and transaction history.
“If financial institutions that house digital financial records make it difficult or impossible for consumers to authorize access or share their information, that blocks opportunities for consumers to benefit from this information,” CFPB Director Richard Cordray said at a field hearing Nov. 17 in Salt Lake City. “The result could be to thwart new entrants from entering the market with consumer-friendly products and services, even those not currently being offered by the financial institutions themselves.”
Robert Morgan, vice president of emerging technologies at the American Bankers Association, said in prepared remarks that regulation could stifle innovation. He suggested banks and their technology partners be allowed to keep working on protocols and methods of securely sharing data.
The CFPB holds field hearings to solicit comments as it prepares to write rules. But the hearing and the launching of the inquiry come a week after Republicans took control of the White House and Congress, a chilly sign for the CFPB and any rulemaking it might do in 2017. Congressional Republicans have tried in the past to push through legislation that would curtail the agency's independence, and Donald Trump’s victory in the election could facilitate their agenda.
Morgan said banks are working to ensure their customers have the ability to safely share and control their data.
“This is not as easy as flipping a switch, as some have suggested,” he said. “There is a lot of coordination that needs to go on between our nation’s 6,000 banks, their technology providers, data aggregators and their customers.”
Cordray, in his remarks, said no company should be able to hoard customer information as a way to deprive consumers of the benefits of fair market competition.
“We have heard that banks, credit unions and others that house this information have operational concerns about when and how they are supposed to share the information with third-party providers,” he said. “We want to learn more about this. Does the sharing of financial records impose burdens on staff time or other resources? Are there legitimate concerns that the number and frequency of these requests could overwhelm the servers at financial institutions?”
To contact the reporter on this story: Jeff Bater in Washington at email@example.com
To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)