What’s the issue?
Consumers benefit from new technology and applications that allow them to have access to their own financial data at their fingertips. In fact, consumers’ right to access their financial records in a standardized electronical format is guaranteed by law. This guarantee has been widely interpreted to include consumers’ ability to share their data with authorized third parties, for example, a tool that helps with personal budgeting.
The banking industry and tech companies have responded to consumer demand and have worked together to invest in technology that provide consumers transparency and control over when and with whom they share their financial data. For example, establishing application programming interface (API) based standards rather than relying on “screen-scraping”, which is a method of data collection where a user would provide their login credentials for one service to a third party.
Government agencies, specifically the Consumer Financial Protection Bureau (CFPB), are looking to establish standards to ensure all consumers are protected and have control over and access to their personal financial information.
How does this impact consumers?
Banks support consumers’ ability to have access to their personal financial information and to control when and with whom to share that data in a secure, transparent manner. Congress has recognized the importance of protecting consumer financial information, and banks are subject to a strict regulatory framework that governs how banks must protect consumer data and how that data may be shared with third parties. However, entities outside the banking system that may have access to consumer financial information do not necessarily have the same stringent protections in place.
What can be done about it?
Congress and the CFPB should support existing innovations that provide consumers the ability to control their personal financial data. The CFPB should create a regulatory framework for fintechs and other data aggregators to provide a consistent standard for protecting consumers and their data.