Implementation of Section 1033 Rule Will Unlock Financial Choice, Competition, and Benefits
WASHINGTON, D.C. – The Financial Technology Association (FTA) today submitted a comment letter in response to the Consumer Financial Protection Bureau’s (CFPB) rulemaking to implement financial data rights under Section 1033 of the Dodd-Frank Act. In the letter, FTA urged the Bureau to focus on consumer-centric implementation that puts people in control of their financial data so they can access technology-driven innovation in financial services.
“Consumers should be allowed to securely control their own financial information. Robust personal data rights will help consumers achieve greater financial health and benefit from more financial services competition,” said FTA President and Chief Executive Officer Penny Lee. “We applaud the Bureau’s commencement of the Section 1033 rulemaking process and look forward to serving as a resource.”
Personal financial data rights allow consumers to securely control and permission their financial data, connecting their bank accounts and other sources of financial information to lower-cost, flexible, and mobile financial products. Seventy-five percent of consumers say they want to be able to connect their bank accounts to the digital financial services they choose, like budgeting tools, payment apps, and investment platforms. And 83 percent of consumers prefer to control where their data goes rather than letting companies choose for them. Many financial technology companies empower consumers to use their financial data for their own benefit and access personalized financial services rather than being trapped with incumbent providers.
In the comment letter, FTA laid out the policy priorities that should guide a consumer-centric implementation of Section 1033, including:
- Ensuring that consumers always have access to their data, including through third-party access portals and via secure API (application programming interface) or permissioned login approaches;
- Recommending that the Bureau explore a phased approach to expanding covered accounts to empower consumers with a more holistic view of their financial health and with access to a broader range of tailored products and services;
- The importance of data parity so that consumers, regardless of their current financial services providers, have access to the same data, subject to key performance standards;
- The importance of offering consumers clear and plain language disclosures so that they can make informed decisions regarding the use of their personal financial data;
- Supporting the application of existing data security regulations to safeguard consumer data and propose a process for supervising certain larger participants; and
- Suggesting clearly distinguishing between Section 1033 and certain requirements applicable in the FCRA (Fair Credit Reporting Act) context.
To read FTA’s full comment letter and policy recommendations for the Bureau’s implementation of Section 1033, click here. For more background, read “Fintech Explained: Open Banking Drives Consumer Benefits and Choice” and “Data Privacy Week: Safety, Transparency, and Choice for the Future of Finance.”
The Financial Technology Association (FTA) is a DC-based trade association representing industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.