Removing Barriers Blog

CFPB Field Hearing Discusses Access to Financial Records
Posted November 17, 2016 by Chandler Schuette

In a field hearing held in Salt Lake City, Utah, the CFPB discussed consumer access to financial records. The hearing focused on how consumers may use third-party Financial Technology (FinTech) companies, by providing access to their financial data, to allow them to aggregate it in a way that aids with financial planning and other money-management. 

During the hearing, the CFPB stated that financial institutions and startup FinTech companies are pushing forward aggressively to create websites and mobile applications that offer consumers a variety of innovative services. They added that, “Some sites help consumers monitor relationships with multiple financial institutions in one place. Others help consumers make spending decisions and manage their money while on the go. By looking at a consumer’s transactional history across their credit cards, bank statements, prepaid cards, and other sources of spending, websites or mobile apps can offer trend analysis that helps consumers understand their spending habits.” 

Financial institutions, although supportive of the concept, have expressed some privacy concerns with releasing detailed financial records to third-parties, and have questioned how to reconcile consumer requests with the Fair Credit Reporting Act and other privacy laws. 

In his prepared remarks at the hearing, Director Richard Cordray noted, “We have heard that banks, credit unions, and others that house this information have operational concerns about when and how they are supposed to share the information with third-party providers. We want to learn more about this. Does the sharing of financial records impose burdens on staff time or other resources? Are there legitimate concerns that the number and frequency of these requests could overwhelm the servers at financial institutions?” 

Credit unions have a long history of supporting financial education efforts and of working with their members to further their financial health. While they certainly support consumer friendly innovation, they are also cautious about any policies that put consumers’ privacy at risk or create unnecessary regulatory burdens on those already working to help consumers improve their financial lives. 

The CFPB, in conjunction with the field hearing, released a Request for Information about the issue. CUNA will be seeking more feedback from credit unions about this issue and plans to respond. 

CUNA has also urged the CFPB not to engage in any additional policymaking until a new administration is in place.