The Bank Policy Institute, Kentucky Bankers Association, and Forcht Bank have filed a reply brief challenging the Consumer Financial Protection Bureau’s (CFPB) Section 1033 rule. The brief addresses arguments made by the Financial Technology Association (FTA), which supports the rule.
Paige Pidano Paridon, Executive Vice President and Co-Head of Regulatory Affairs at BPI, stated: “This Biden-era rule gives big technology companies the green light to exploit the privacy and security of consumer financial data, while concurrently forcing banks to shoulder the financial burden and fallout when a fintech company does wrong. Instead of trying to fix prices to enrich their investors, fintechs should work with banks to protect consumers.”
According to the organizations challenging the rule, both the FTA and CFPB failed to consider how different parts of the regulation could collectively impact consumer data security. They argue that flaws in the rule—such as not banning screen scraping—put sensitive financial information at risk.
The brief also contends that Section 1033 of the Dodd-Frank Act requires banks to provide account data only to consumers or possibly their fiduciary representatives, not any third-party intermediaries. The challengers assert that technology companies are seeking access for business purposes rather than consumer benefit.
Another point raised is that Congress did not authorize CFPB to prevent banks from charging fees when third parties request customer data. The groups claim this would allow fintech firms to use bank investments in secure platforms without compensation while profiting from customer information.
The Bank Policy Institute has released a factsheet addressing what it describes as misconceptions about the 1033 rule. More details can be found on its website: https://bpi.com/fintech-industrys-last-ditch-effort-to-save-cfpbs-1033-rule-rests-on-false-narratives/
The Bank Policy Institute represents a range of U.S. and foreign banks operating in America and focuses on research, policy analysis, and advocacy regarding regulatory issues such as cybersecurity and fraud.
For further information, Tara Payne at BPI can be contacted via tara.payne@bpi.com