American Fintech Council urges changes to California's proposed privacy rule

The American Fintech Council (AFC) has addressed concerns regarding the California Privacy Protection Agency's (CPPA) proposed updates to the California Consumer Privacy Act (CCPA). The proposed rule focuses on consumer privacy and automated decision-making technology (ADMT) regulations. AFC, representing fintech companies and banks, supports data protection but calls for revisions to ensure fintech firms can continue offering secure financial products without undue burdens.

Phil Goldfeder, CEO of AFC, stated, "The CPPA’s proposed rule represents an important step in ensuring consumer protections in the digital economy, but it must also consider the practical realities of responsible financial innovation." He emphasized that regulations should allow fintech companies to deliver safe and inclusive financial products while promoting transparency and accountability.

In its comment letter, AFC highlighted concerns about ambiguous compliance requirements and operational challenges posed by the new regulations. For instance, estimating the number of consumers affected by ADMT could be problematic for lenders entering new markets without precise data. Additionally, unclear data-sharing provisions may create compliance issues. The cost-benefit analysis for assessing privacy risks is vague, causing uncertainty about compliance. Moreover, requiring data deletion used in ADMT training models could hinder underwriting and risk assessments.

Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC, remarked, "The fintech industry is committed to responsible artificial intelligence solutions, data usage, and consumer protection, but the proposed rule creates significant ambiguity that could hinder innovation and limit access to essential financial services." He urged CPPA to provide more guidance on compliance expectations related to risk assessments and data sharing.

AFC aims to promote a transparent and inclusive financial system by supporting responsible innovation in financial services. Its members foster competition in consumer finance while pioneering products for underserved segments.