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Senate Hearing Addresses Fintech Privacy Challenges

On Tuesday, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing on “Privacy Rights and Data Collection in a Digital Economy.” Witnesses included Peter Chase, Senior Fellow for the German Marshall Fund of the United States; Jay Cline, Privacy and Consumer Protection Leader, Principal, PwC US; and Maciej Ceglowski, Founder, Pinboard.

“My concerns about big data collection go back as far as the creation of the CFPB, which was collecting massive amounts of personal financial information without an individual’s knowledge or consent,” said Chair Mike Crapo in his opening statement.

“Consumers deserve to know what type of information is being collected about them, what that information is being used for and how it is being shared,” Crapo added.

The witnesses discussed the impact of the EU’s General Data Protection Regulation in the U.S., and how it differs from the 1995 Data Protection Directive.

“While it is too soon to draw definitive conclusions about the GDPR, there is a tension between its concept of user consent and the reality of a surveillance economy that is worth examining in more detail,” said Ceglowski. “A key assumption of the consent model is any user can choose to withhold consent from online services. But not all services are created equal—there are some that you really can’t say no to. Take the example of Facebook. Both landlords and employers in the United States have begun demanding to see Facebook accounts as a condition of housing or employment.”

Crapo noted that the use of personal data can “provide value, such as risk mitigation, fraud prevention, and identity verification, or to meet the requirements of laws or regulations.”

“However, in many other cases, that data can be used in ways that have big implications for their financial lives, including to market or make decisions on financial products or services that impact a consumer’s access to or cost of credit and insurance products, or in ways that impact their employment prospects.”

Watch the complete hearing webcast here.

 

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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