CFPB Kicks Off Personal Financial Data Rights Rulemaking
Proposals under consideration would fuel market competition and strengthen consumer data rights
Washington, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) outlined options to strengthen consumers’ access to, and control over, their financial data as a first step before issuing a proposed data rights rule that would implement section 1033 of the Dodd-Frank Act. 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 move towards companies competing for their business with alternate or innovative products and services.
“Dominant firms shouldn’t be able to hoard our personal data and appropriate the value to themselves,” said CFPB Director Rohit Chopra. “The CFPB’s personal financial data rights rulemaking has the potential to jumpstart competition, giving Americans new options for financial products.”
Data now touches almost every facet of the human experience, including in banking. 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. Today’s kick off begins the process of removing stumbling blocks to more competition and consumer choice.
This rulemaking aims to create a marketplace where companies would need to improve their offerings to keep their customers. Nascent firms would be able to use consumer-authorized data to build and widely offer products and services that can compete with big incumbents. 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 current environment illustrates the imperative for this rulemaking. Companies compile vast troves of personal data, including information about people’s use of financial products and services. By monopolizing the use of personal financial data, financial institutions are able to block competitors’ access to potential customers and stifle development of competitors’ products and services. In addition, data protection concerns have contributed to a lack of trust among market participants, and a growing sense of powerlessness among the general public. Clear data rights for consumers have the potential to give individuals more bargaining leverage.
The document released today is an outline of proposals and alternatives under consideration for the CFPB’s data rights rulemaking. If today’s proposal is finalized, the rule would require firms to make a consumer’s financial information available to them or to a third party at that consumer's direction. As described in the outline, the CFPB is considering proposals, for instance, that would empower consumers who want to switch providers to transfer their account history to a new company, so they do not have to start over if they are unsatisfied with the service provided by an incumbent firm. The CFPB is also considering proposals that would include important options around privacy for personal financial data authorized for third party use, including limitations that would prevent third parties from reselling authorized data for other uses.
The rulemaking process will include panel convenings to seek feedback from small entities on the proposals under consideration. Later, the panel will prepare a report on the input received from the small entities, and the CFPB will consider the input as it develops a proposed rule.
Other stakeholders may also provide written feedback on the CFPB’s outline. Feedback should be emailed to Financial_Data_Rights_SBREFA@cfpb.gov no later than January 25, 2023.
Read the CFPB’s Outline of Proposals and Alternatives Under Consideration, Small Business Advisory Review Panel for Required Rulemaking on Personal Financial Data Rights .
Read the CFPB's High-Level Summary and Discussion Guide of Outline of Proposals and Alternatives Under Consideration for SBREFA: Required Rulemaking on Personal Financial Data Rights .
Additional related materials are available on our rulemaking page.
Read Director Chopra’s remarks on the personal financial data rights rulemaking.
Consumers can submit complaints about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees who believe their companies have violated federal consumer financial protection laws are encouraged to send information about what they know to firstname.lastname@example.org.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit consumerfinance.gov.