Joint Trades Letter to CFPB on 1033 Small Entity Compliance Guide

Dear Director Chopra,

The American Bankers Association (ABA), the American Fintech Council (AFC), and the Community Development Bankers Association (CDBA) appreciate the Consumer Financial Protection Bureau's (CFPB or Bureau) efforts in building a framework for safe and secure consumer-permissioned data sharing, as evidenced by its Proposed Rule on Personal Financial Data Rights4 (Proposed Rule). We are writing to you on behalf of our members to request that the Bureau takes all reasonable steps to put the entities we represent in a position to succeed.

Our organizations all have the privilege of representing small and emerging entities operating in the open banking ecosystem; these include traditional depository institutions as well as nonbanks such as fintechs, and they may function in different capacities depending on the situation (i.e., as a data provider or data recipient). But while there may be differences in the constitution of our members, they have much in common: a desire to assist consumers in meeting their financial goals, offering uninterrupted financial services, and the requirement to comply with the rules and expectations of agencies (although there are nuances with respect to supervision). However, this latter issue may prove difficult to effectuate in certain instances, such as the instant case of a novel regulation or with concurrent, overlapping rulemaking such as potential changes to Regulation V.

The technical complexity of Section 1033 operationalization, the need to understand the context of the ecosystem's historical development, and the tangled spiderweb of overlapping laws and existing entity-specific solutions renders the challenge especially arduous. This was made clear by conversations of the undersigned associations with their members, during which a material number demonstrated unfamiliarity with some of the core concepts in consumer-permissioned data sharing as well as uncertainty in how to implement some of the Bureau's contemplated obligations. In addition, several sections of the Proposed Rule are unclear and inconsistent in the abstract and would benefit from practical implementation advice. While it is probable that the CFPB will incorporate stakeholder feedback as it finalizes the rule to reduce the ambiguity, additional steps are necessary to ensure an effective rollout that limits disruptions to consumers.

Download the joint comment letter to read the full text.