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ABA: The American Bankers Association
Comment Letter

ABA Letter to CFPB on Data Broker RFI

  • Published June 13, 2023

Re: Request for Information Regarding Data Brokers and Other Business Practices Involving the Collection and Sale of Consumer Information (Docket No. CFPB-2023-0020)
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The Honorable Rohit Chopra
Director
Consumer Financial Protection Bureau
1700 G St. NW
Washington, DC 20552

Dear Director Chopra,

The American Bankers Association (ABA) appreciates the opportunity to comment on the Consumer Financial Protection Bureau's (CFPB or Bureau) Request for Information Regarding Data Brokers and Other Business Practices Involving the Collection and Sale of Consumer Information (RFI). The RFI seeks to learn more about the data broker industry and the ways that data brokers interact with consumers "to help inform the CFPB about new business models that sell consumer data" and to "collect information on consumer harm and any market abuses." This subject has clear implications for financial institutions and their customers, as it dovetails with issues that are priorities for ABA's members (such as privacy and a level regulatory playing field).

As noted by the RFI, there is already an extensive regulatory schema governing how banks and certain other financial institutions may use and transfer data. The RFI appears to be motivated by the rise of new types of businesses that sell consumer data but claim not to be covered by these existing rules. Therefore, any CFPB activity on the subject should be targeted at those unregulated entities and not upset the existing framework. Accordingly, if the CFPB plans to continue its development of the data broker concept in future activity, ABA calls on the CFPB to refine any proposed definition of "data broker" to expressly exclude financial institutions. Additionally, the CFPB should clarify how its "data broker" concept could intersect with forthcoming rules promulgated pursuant to Dodd-Frank Act Section 1033. We urge the CFPB to ensure that data sharing under those future Section 1033 regulations be distinct from any data broker considerations, particularly where any sharing and usage aligns with a consumer's informed and express consent.

ABA also believes that the CFPB should develop its position on data brokers in a way that does not interfere with banks' use of information from outside sources for important purposes that benefit consumers, such as identity resolution, fraud prevention, and anti-money laundering activities. Therefore, ABA respectfully requests that the Bureau carefully consider specific use cases and weigh the impact of any activity, including seeking feedback from stakeholders, before taking any action.

Finally, ABA reiterates the pressing need for the CFPB to start supervising large nonbank entities dealing in financial data because their business activities present risks to consumers that are best mitigated through rigorous examination for compliance with existing federal consumer protection laws and regulations.

Download the comment letter to read the full text.

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