According to a post from the CFPB’s Newsroom, new principles were outlined to help protect consumers who authorize their financial data to third party companies. These principles are intended to help “fintech” firms, banks, and other institutions develop and innovate financial products for consumers.
“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.” The CFPB has since reached out to large and small banks and credit unions, their trade associations, aggregators, “fintech” firms, consumer advocates, and individual consumers to better understand consumer-authorized data access can be improved.
When consumers authorize companies to collect their financial data from other organizations, they can provide a variety of products and services to them. These products include fraud screening, identity verification, personal financial management, and bill payment softwares and subscriptions. While the CFPB recognizes these products can help consumers, there are many challenges to be addressed as technology continues to develop.
The protection principles cover several different areas designed to reiterate the importance of protecting consumers; this includes data access, scope, and usability, the control of the data and its informed consent, payment authorizations, security, transparency of access rights, accuracy, accountability for access and use, and disputes and resolutions for unauthorized access.
The CFPB is ready to facilitate constructive efforts to take appropriate action to protect consumers, but these principles are not intended to be a statement future enforcement. They are not intended to alter or provide guidance on existing statutes or regulations currently applied in the market.
To see the full release from consumerfinance.gov, visit their site here.