October 28, 2020
A call to action for fintech
After much anticipation, last week the Consumer Financial Protection Bureau (CFPB) released their Advanced Notice of Proposed Rulemaking (ANPR) on Dodd-Frank Section 1033. This announcement is a watershed moment for our industry––it suggests that, when policymakers think about the future of financial services, they are thinking about fintech.
An ANPR is a first step toward a rulemaking that will establish new regulatory requirements for entities covered by Dodd-Frank. In plain english, the ANPR asks: should there be a rule here and if so what should it say? Regulators give advanced notice so that key stakeholders––businesses, advocacy groups, consumers, and the developers reading this blog 👋 ––can provide input, input that must be considered before any rulemaking.
This rulemaking could strengthen consumer control over their financial data and, as a result, continue to push fintech innovation to new heights. But that outcome will depend on all of our input. Here, we’ll share our key takeaways, why this is important for fintech, and what you can do to help.
Three biggest takeaways:
Speaking of consumer control over their data, the CFPB confirmed that consumer control is central to a data sharing ecosystem. Consumers have the right to authorize their data to power services that they want to use to improve their financial lives.
Fintech-driven innovation and competition in financial services is beneficial for consumers, and the market in general. Indeed, consumers’ ability to access less expensive or more personalized tools are a key benefit of a consumer data right. The CFPB will be eager to hear about different fintech use cases, how they benefit consumers, and why they rely on data access.
The lines between financial institutions, fintech companies, and data aggregators are blurring. The CFPB took note that banks and other financial data holders already are becoming key consumers, or data users, of data aggregation services. For example, a fintech lender may use consumer-permissioned bank account data to properly assess risk for a customer, and later that same customer may want to share data on this loan’s repayment profile with a traditional financial institution.
Why you should care:
If you are reading this, there is a good chance your business depends on your customers having the right to share their financial information with you. The CFPB is considering 111 questions about whether and how their right to do that should be protected. This outcome of this rule will affect any entity that engages with consumer financial data, and it is up to us all to ensure an ecosystem centered on robust consumer access.
How to get involved:
The ANPR process explicitly asks for your viewpoint. The best way to get involved is to identify which questions matter to you and submit detailed responses. Respondents have 90 days to provide comments.
Every fintech company has a unique story to tell, with customer outcomes and supportive data that demonstrate the benefits of your products. Different use cases rely on different specific consumer-permissioned data to work, and it’s important that we highlight the full necessary breadth and depth to power current and future innovative services.
If you are interested in hearing how we are responding, or if there is any support we can provide to you throughout the process, reach out to the team at firstname.lastname@example.org.