The Consumer Financial Protection Bureau released an advance notice of proposed rulemaking to collect information on how it should implement Section 1033 standards on sharing consumer financial data, and ICBA urged the agency to focus its rulemaking on including needed protections for community banks and their customers.
Background: Section 1033 of the Dodd-Frank Act requires covered financial institutions to make available to consumers certain data relating to consumers’ transactions and accounts upon request.
New Proposed Rule: The new proposal seeks comments to inform its consideration of four issues related to implementing Section 1033:
Who can serve as a “representative” making a request on behalf of the consumer.
The optimal approach to the assessment of fees to defray the costs incurred by a “covered person” in responding to a customer-driven request.
The threat and cost-benefit pictures for data security associated with 1033 compliance.
The threat picture for data privacy.
Recent Court Developments: The proposed rule comes after the CFPB last month requested a stay in a lawsuit challenging the 1033 rule and said it has decided to initiate a new rulemaking. The CFPB previously asked a federal court to vacate its 1033 rule, saying the rule is unlawful.
ICBA Response: In a national news release on the new rulemaking, ICBA President and CEO Rebeca Romero Rainey said the CFPB should:
Preserve an ICBA-advocated provision from the previous rule exempting small community banks from the requirement to create and maintain a third-party developer interface.
Allow banks to charge reasonable fees for third parties to access bank customers’ data.
Enhance bureau oversight of third-party data privacy protections because nonbank fintechs that access customer information and store bank login credentials may not take the same care in protecting consumer privacy and data that community banks do.
What It Means for Community Bankers: ICBA has long expressed concerns about the impact of the rule on consumer data security and privacy. ICBA and other groups recently issued a statement correcting the record on Section 1033 rulemaking following misleading claims from a group of fintech and retail organizations.
Ongoing Advocacy: Addressing the 1033 rule is a key priority of ICBA’s “Repair, Reform, and Thrive” plan for the new Congress and Trump administration.
