Yesterday, the Consumer Financial Protection Bureau (CFPB) outlined principles for protecting consumers when they authorize third party companies to access their financial data to provide certain financial products and services. These principles are intended to help foster the development of innovative financial products and services, increase competition in financial markets, and empower consumers to take greater control of their financial lives. The principles reiterate the importance of protecting consumers to all stakeholders that provide, use, or aggregate consumer-authorized financial data.
“Today, the Bureau released its consumer protection principles for the consumer-authorized data-sharing market,” said CFPB Director Richard Cordray. “These principles express our vision for realizing an innovative market that gives consumers protection and value.”
Many companies, including “fintech” firms, credit unions, and other financial institutions, get authorization from consumers to access their account data that reside in separate organizations to provide a variety of products and services. These include fraud screening and identity verification, personal financial management, and bill payment. Such products and services could help consumers make smarter spending, savings, and investment decisions and live their lives more efficiently and effectively.
The Consumer Bureau has been studying consumer-authorized data access and issued a Request for Information in 2016 to gather feedback from wide range of stakeholders. The Consumer Bureau received feedback from large and small banks and credit unions, their trade associations, aggregators, “fintech” firms, consumer advocates, and individual consumers.
Read the Consumer Protection Principles here.