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A dozen state financial officers are writing to the Consumer Financial Protection Bureau (CFPB) to uphold consumers’ right to share financial data with authorized third parties as the agency weighs a rule that could restrict their ability to do so, according to a letter exclusively reviewed by FOX Business.
CFPB is considering revising a regulation under section 1033 of the Dodd-Frank Act, which would revise the definition of a “representative” who makes a request on behalf of the consumer, as well as how to assess fees to cover costs incurred by a covered person responding to a customer request.
Twelve state financial officers — including nine treasurers, two auditors and one controller — wrote in favor of the rule recognizing consumer-authorized third parties as “representatives” while preserving existing authorization and conduct requirements.
They wrote that Section 1033 gives consumers a right to access their financial information upon request and that the rule includes agents, trustees or representatives acting on their behalf, including those who aren’t fiduciaries, upon the consumer’s authorization, which is the “touchstone” of the process that needs to be preserved.
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A dozen state financial officers are arguing for the CFPB to preserve the ability of consumers to authorize non-fiduciary representatives to access their data. (Anna Moneymaker/Getty Images / Getty Images)
“Preserving this interpretation promotes competition and innovation (including for real-time payments, budgeting tools, alternative credit assessment, AI, and crypto) and it reduces the risks of debanking and market concentration,” the financial officers wrote.
“In contrast, narrowing ‘representative’ would harm consumers by reducing choice and entrenching incumbents — outcomes counter to Section 1033’s competitive purpose,” they explained.
The group of state financial officers wrote that the CFPB should affirm the text of the rule by clarifying that a consumer-authorized third-party qualifies as a representative acting on their behalf.
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The CFPB’s proposed rule is revising regulations under the Dodd-Frank Act. (Photographer: Samuel Corum/Bloomberg via Getty Images / Getty Images)
They also wrote the definition of “representative” shouldn’t be limited to fiduciary relationships as it’s not required by the text and would “unduly restrict consumer choice.”
“Consumers should be able to exercise their Section 1033 rights directly or through an authorized representative of their choosing. A text-faithful interpretation of ‘representative’ sustains competition and innovation and reduces risks of debanking and market concentration,” the state financial officers explained.
State financial officers who signed onto the letter include Kansas Treasurer Steven Johnson, Kentucky Treasurer Mark Metcalf, Mississippi Treasurer David McRae, Nebraska Auditor Mike Foley, Nebraska Treasurer Tom Briese, Nevada Controller Andy Matthews, North Dakota Treasurer Thomas Beadle, Ohio Treasurer Robert Sprague, South Carolina Treasurer Curtis Loftis, Utah Auditor Tina Cannon, Utah Treasurer Marlo Oaks and Wyoming Treasurer Curt Meier.
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The state financial officers want to ensure consumers can authorize a third party to look at their financial data. (Yuki Iwamura/AFP via Getty Images / Getty Images)
The public comment period for the CFPB’s rule closed on Tuesday night and the rule attracted nearly 14,000 comments.
Sen. Cynthia Lummis, R-Wyo., sent a letter to the CFPB in support of open banking policies as the agency considers the rule, while consumer groups have also weighed in.
“Major financial institutions are attempting to consolidate their power and maintain monopolistic control over consumer data,” Will Hild, executive director of Consumers’ Research, said in a statement.
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“If these major banks are allowed to continue to control access to consumer data, they will have even greater leverage to punish Americans for their beliefs and to coerce compliance with their radical left-wing ideology.”
