CFPB Looks to Give Consumers More Control Over Their Data

The Consumer Financial Protection Bureau (CFPB) is looking at ways to give consumers more control over their financial data.

Under the options the CFPB is considering, consumers would be able to more easily and safely
“walk away from companies offering bad products and poor service” and toward businesses offering alternative or innovative products and services the bureau said in a news release Thursday (Oct. 27).

“Data now touches almost every facet of the human experience, including in banking,” the CFPB said. “Digital technology is transforming the markets, including how payment, deposit, and lending services are provided and who provides them. Big banks, financial tech companies, incumbents, and small start-ups are all jockeying to be in front.”

Under the proposed rulemaking, those companies would need to improve their offerings to retain customers. Fledgling businesses would be able to use consumer-authorized data to create and offer products and services that can compete with larger competitors.

“Consumers could switch providers to get a better deal or escape poor customer service, and companies would have to keep and attract customers through competitive prices, high-quality services, and improved products,” the release said.

Read more: CFPB Eyes Open Banking’s Data Rules and ‘New Regulatory Approach’

The bureau is undertaking these efforts by activating a dormant authority under Section 1033 of the Consumer Financial Protection Act, CFPB Director Rohit Chopra said at a speech earlier this week at the Money 2020 conference in Las Vegas.

Section 1033 requires consumer financial services providers to give consumers access to certain financial information, although Chopra cautioned that it is “not explicitly an open banking or open finance rule, [but] will move us closer to it.”

And it is through subsequent rules overseeing data sharing that personal data rights would, in Chopra’s opinion, “have teeth.”

The process would see the CFPB gain some more authority, with rulemaking to follow. Data sharing would be standardized, and a “decentralized and neutral consumer financial market structure,” as envisioned by Chopra, would promote healthier competition for consumers’ bank accounts and businesses.