The US House Committee on Financial Services Task Force on Financial Technology considered testimony on developments in data sharing and fintech which raise consumer protection and regulatory questions.
The increased use of consumer data to create new products and services has resulted in a significant rise in the amount of personal and financial data that is obtained, maintained, and furnished to third parties, raising consumer protection and regulatory questions.
Some of the developments being scrutinized are credential sharing, screen scraping and application program interface (API) methods as examples of data sharing means that “lack adequate consumer protections and privacy protections, and face cybersecurity weaknesses.” It was noted that the development of these new products and services can provide consumers with improved means of overseeing their finances, setting savings goals and managing other financial responsibilities.
Commenting on the proceedings, Daniel Meade, partner at law firm Cadwalader, said in a post: “There was a good bit of bipartisan consensus at the Task Force’s hearing on the need to move away from screen scraping, as well as the need for the CFPB [Consumer Financial Protection Bureau] to move as quickly as possible to implement a rule under Dodd-Frank Section 1033. However, it seems unlikely that the CFPB will issue a proposed Section 1033 rule until a Senate-confirmed Director of the CFPB is in place. Rohit Chopra’s nomination remains pending.”