US national trade groups petition CFPB for data aggregation

Thursday 4 August 2022 14:51 CET | News

Eight US national trade groups have petitioned the Consumer Financial Protection Bureau (CFPB) to initiate a rulemaking to strengthen the privacy and security of consumer financial data held by fintechs, bigtech, and data aggregators, the official press release states.


Eight US national trade groups have petitioned the Consumer Financial Protection Bureau (CFPB) to initiate a rulemaking to strengthen the privacy and security of consumer financial data held by fintechs, bigtech, and data aggregators, the official press release states.


The eight associations are the American Bankers Association, Consumer Bankers Association, Credit Union National Association, Housing Policy Council, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, National Bankers Association, and The Clearing House Association. 

The filing marks the first time any of the groups have utilised the CFPB's petition process since it was updated in February 2022. The Bureau is currently engaged in a rulemaking under Section 1033 of the Dodd-Frank Act, which will establish standards for sharing consumer financial data, typically through third parties, in a secure and transparent manner that gives consumers control. Financial institutions must meet significant data privacy requirements under federal law and are monitored for compliance with all consumer protection laws and regulations through the CFPB’s close supervision. Data aggregators will be covered by the Section 1033 rule, but not subject to CFPB supervision, leaving a significant gap in protection for consumers. In the petition, the trade groups argue the 1033 regulation will be incomplete without consistent oversight of these tech firms that serve as intermediaries for consumer financial data and urge the CFPB to initiate a rulemaking to define ‘larger participants’ in the data aggregation services market that should be subject to ongoing supervision by the Bureau for compliance with the rule when it is final, according to the official press release.

Which are the eight US national trade groups

The American Bankers Association is the voice of the US’ USD 24 trillion banking industry, which is composed of small, regional, and large banks that together employ more than 2 million people, safeguard USD 19.9 trillion in deposits, and extend USD 11.4 trillion in loans.

The Consumer Bankers Association represents America’s retail banks. It promotes policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly USD 4 trillion in consumer loans and provide USD 275 billion in small business loans annually. 

The Housing Policy Council is a trade association comprised of national mortgage lenders and servicers, mortgage, property, and title insurers, and technology and data companies. Its interest is in the safety and soundness of the housing finance system, the equitable and consistent regulatory treatment of all market participants, and the promotion of lending practices that create sustainable homeownership opportunities in support of vibrant communities and long-term wealth-building for families. 

The Independent Community Bankers of America reportedly creates and promotes an environment where community banks flourish. With nearly 50,000 locations nationwide, community banks constitute roughly 99% of all banks, employ nearly 700,000 Americans, and are the only physical banking presence in one in three US counties. It holds nearly USD 5.9 trillion in assets, over USD 4.9 trillion in deposits, and more than USD 3.5 trillion in loans to consumers, small businesses, and the agricultural community.

Credit Union National Association (CUNA) is a national association that advocates on behalf of America’s credit unions, which are owned by 110 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers advocacy, professional growth, and operational confidence to protect the best interests of all credit unions. 

The National Association of Federally-Insured Credit Unions is a national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with federal advocacy, education, and compliance assistance. 

Founded in 1927 as the Negro Bankers Association, today, the National Bankers Association has expanded its membership to also include Hispanic-American, Asian-American, Native American, and women – owned banks. Member banks are in twenty-two states and the District of Columbia. Reportedly recognised as the voice of minority banking in the US, the NBA continues its role as chief advocate for these banks in the nation’s capital. 

The Clearing House Association reportedly is the country’s oldest banking trade association, and is a nonpartisan organisation that provides informed advocacy and thought leadership on critical payments-related issues. Its sister company, The Clearing House Payments Company owns and operates core payments system infrastructure in the US, clearing and settling more than USD 2 trillion each day.

Further reading

In August 2021, The Paypers sat down with industry expert Eyal Sivan to gain insights into Open Banking’s status in the US, cool fintechs, and all things data. We invite you to read the interview, for more context.

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Keywords: regulation, data aggregation, Open Banking
Categories: Banking & Fintech
Companies: Consumer Financial Protection Bureau
Countries: United States
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