Trades Petition CFPB to Ensure Data Aggregation Services Market is Fair, Transparent and Competitive

Washington, D.C. (Aug. 2, 2022) — Eight national trade groups—including the Independent Community Bankers of America, American Bankers Association, Consumer Bankers Association, Credit Union National Association, Housing Policy Council, National Association of Federally-Insured Credit Unions, National Bankers Association, and The Clearing House Association—today petitioned the Consumer Financial Protection Bureau to initiate a rulemaking that will strengthen the privacy and security of consumer financial data held by fintechs, Big Tech and data aggregators.

The filing marks the first time any of the groups have utilized the CFPB's petition process since it was updated in February.

The Bureau is currently engaged in a rulemaking under Section 1033 of the Dodd-Frank Act, which will establish standards for sharing consumer financial data, typically through third parties, in a secure and transparent manner that gives consumers control. Financial institutions have to meet significant data privacy requirements under federal law and are monitored for compliance with all consumer protection laws and regulations through the CFPB’s close supervision. Data aggregators will be covered by the Section 1033 rule, but not subject to CFPB supervision, leaving a significant gap in protection for consumers. In the petition, the trade groups argue the 1033 regulation will be incomplete without consistent oversight of these tech firms that serve as intermediaries for consumer financial data and urge the CFPB to initiate a rulemaking to define "larger participants” in the data aggregation services market that should be subject to ongoing supervision by the Bureau for compliance with the rule when it is final.

The associations emphasized that “[b]y the nature of their business, data aggregators hold a tremendous amount of consumer financial data. It is estimated that data aggregators hold the consumer log-in credentials for tens of millions of customers. While consumers may consent to the sharing of their financial data, many of these same consumers are unaware of the activities in which these intermediaries engage, how the information is being collected, and how the data may be used or shared.”

Consequently, the associations said there is a supervisory imbalance that “creates both an unsustainable model as the aggregation services market grows and the risk that the laws applicable to the activities of those larger participants in this market will be enforced inconsistently.”

“We believe the CFPB should ensure that data aggregators and data users that are larger participants in the aggregation services market – not just banks and credit unions – are examined for compliance with applicable federal consumer financial law, especially the requirements of the forthcoming 1033 rulemaking, including the substantive prohibitions on the release of confidential commercial information,” the associations said. Only then will customers be protected in equal measure when their data is shared outside the secure bank and credit unions systems.

The entire petition is available here.

About the American Bankers Association

The American Bankers Association is the voice of the nation’s $24 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $19.9 trillion in deposits and extend $11.4 trillion in loans.

About the Consumer Bankers Association

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.

About the Housing Policy Council

The Housing Policy Council is a trade association comprised of the leading national mortgage lenders and servicers, mortgage, property, and title insurers, and technology and data companies. Our interest is in the safety and soundness of the housing finance system, the equitable and consistent regulatory treatment of all market participants, and the promotion of lending practices that create sustainable homeownership opportunities in support of vibrant communities and long-term wealth-building for families. For more information, visit www.housingpolicycouncil.org.

About the Independent Community Bankers of America

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

About Credit Union National Association

Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 110 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit cuna.org.

About the National Association of Federally-Insured Credit Unions

The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.

About the National Bankers Association

Founded in 1927 as the Negro Bankers Association, today, the association has expanded its membership to also include Hispanic-American, Asian-American, Native American and women – owned banks. Member banks are located in twenty-two states and the District of Columbia. Recognized as the voice of minority banking in the U.S., the NBA continues its role as chief advocate for these banks in the nation’s capital. For more information, please visit: www.nationalbankers.org

About The Clearing House Association, L.L.C.

The Clearing House Association, L.L.C., the country’s oldest banking trade association, is a nonpartisan organization that provides informed advocacy and thought leadership on critical payments-related issues. Its sister company, The Clearing House Payments Company L.L.C., owns and operates core payments system infrastructure in the U.S., clearing and settling more than $2 trillion each day.

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