Yesterday, IBAT submitted a comment letter related to implementation of section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The letter is in response to the Consumer Financial Protection Bureau’s (“CFPB”) Advance Notice of Proposed Rulemaking entitled Personal Financial Data Rights Reconsideration.
The decision to “reconsider” certain aspects of the final rule comes amidst ongoing legal challenges that were filed immediately after the 1033 rule was finalized in October 2024. In July of this year, the CFPB filed a motion to stay on the basis that:
“In light of recent events in the marketplace, the Bureau has now decided to initiate a new rulemaking to reconsider the Rule with a view to substantially revising it and providing a robust justification. The Bureau seeks to comprehensively reexamine this matter alongside stakeholders and the broader public to come up with a well-reasoned approach to these complex issues that aligns with the policy preferences of new leadership and addresses the defects in the initial Rule.”
IBAT is reiterating points made prior to the rulemaking in 2024. Namely, that the final rule does not adequately define who should have access to the data (specifically, who qualifies as the “consumer”), the defrayment of both direct and indirect costs associated with 1033 and finally, information, security and privacy concerns.
The CFPB should acknowledge and address that, as open banking continues to drive innovation and broader developments, both the frequency of interactions and the related compliance burden will increase as more third parties seek access to consumer data. Community banks with limited staff and resources may not be able to effectively manage a multitude of third parties seeking access to consumer data but will no doubt face market pressures to do so.
