February 4, 2023

Volume XIII, Number 35

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February 03, 2023

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February 02, 2023

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CFPB Issues Proposed Rulemaking on Data Access and Portability

Recently, the CFPB released an outline of proposed measures related to the Bureau’s Dodd-Frank Section 1033 rulemaking efforts that would allow consumers the rights over their personal financial data. The outline discusses proposed regulations that would require covered data providers to make consumer financial data available directly to a consumer and to any third parties authorized by the consumer. Under these proposed regulations, consumers would be able to easily switch financial providers and transfer their account history to a new provider. In a high-level summary of the proposed regulations, the CFPB discusses the regulatory provisions it is considering proposing, including the following:

  • Coverage of data provider. Companies that have transaction-level information, which includes “financial institutions” as defined in the CFPB’s Regulation E, and “card issuers” as defined in the CFPB’s Regulation Z.

  • Recipients of information. Consumers and authorized third parties.

  • The types of information. (i) periodic statement information for settled transactions and deposits; (ii) information regarding prior transactions and deposits that have not yet settled; (iii) other information about prior transactions not typically shown on periodic statements or portals; (iv) online banking transactions that the consumer has set up but that have not yet occurred; and (v) account identity information.

  • How and when information would need to be made available. The Bureau is considering ways to define the methods and the circumstances in which a data provider would need to make information available with respect to both direct access and third-party access.

  • Third party obligations. The CFPB is considering proposals under which authorized third parties would have to limit their collection, use, and retention of consumer information to what is reasonably necessary to provide the product or service the consumer has requested.

  • Record retention obligations. Proposals under consideration would establish requirements for data providers and third parties to demonstrate compliance with their obligations under the rule.

  • Implementation period. The Bureau is seeking feedback on time frames to ensure consumers are able to benefit from a final rule, while also considering implementation factors for data providers and third parties.

The CFPB is seeking comments about the new rulemaking, by January 25, 2023.

Putting it Into Practice: While a final rule remains far off, companies would be well-served to consider the CFPB’s outlines and how they can satisfy these standards.

Copyright © 2023, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 316
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About this Author

Moorari Shah Bankruptcy Lawyer Sheppard Mullin Law Firm
Partner

Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm's Los Angeles and San Francisco offices. 

Areas of Practice

Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,...

213-617-4171
A.J. S. Dhaliwal Bankruptcy Attorney Sheppard Mullin Washington DC
Associate

A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm's Washington, D.C. office. 

A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.

With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving...

202-747-2323
Lauren Weiss Associate Washington D.C. Sheppard, Mullin, Richter & Hampton LLP
Associate

Lauren Weiss is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Areas of Practice Lauren’s practice focuses on government contracts litigation, investigations, and counseling matters including the following areas:  Cybersecurity counseling, Internal Investigations, Regulatory compliance,  Bid protests before the U.S. Government Accountability Office, Civil False Claims Act litigation defense, and Transactional due diligence.

Prior...

202-747-2678
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