On October 18, 2017, the CFPB released a set of principles expressing the CFPB’s vision of maintaining a balance in creating services based on consumer-authorized use of financial data and data aggregation. The principles are intended to apply broadly, but the CFPB indicated that they are particularly applicable to fintech companies, which having been providing data aggregation based services to consumers using data collected from the consumers’ various financial accounts.
Data aggregation based services include the provision of financial advice or financial management tools, the verification of accounts and transactions, the facilitation of underwriting or fraud-screening, and a range of other functions. The CFPB acknowledged that data aggregation based services hold the promise of improved and innovative consumer financial products and services, enhanced control for consumers over their financial lives, and increased competition in the provision of financial services to consumers. The set of principles released by the CFPB, is intended to remind stakeholders to be mindful of consumer interests and to ensure that effective consumer protections are integrated consistently when developing, using and providing data aggregation services.
Importantly, the CFPB clarified that the principles released: (i) are not intended to alter, interpret, or otherwise provide guidance on, although they may accord with, the scope of those existing protections; (ii) do not establish binding requirements or obligations relevant to the CFPB’s exercise of its rulemaking, supervisory, or enforcement authority; and (iii) are not intended as a statement of the CFPB’s future enforcement or supervisory priorities.
Although not mandatory at this point, financial institutions that develop or offer data aggregation services to consumers should consider integrating the above set of principles into the product design and into their agreements with counterparties.
The CFPB set of principles are provided in full, as follows:
Consumers are able, upon request, to obtain information about their ownership or use of a financial product or service from their product or service provider. Such information is made available in a timely manner. Consumers are generally able to authorize trusted third parties to obtain such information from account providers to use on behalf of consumers, for consumer benefit, and in a safe manner.
Financial account agreements and terms support safe, consumer-authorized access, promote consumer interests, and do not seek to deter consumers from accessing or granting access to their account information. Access does not require consumers to share their account credentials with third parties.
Data Scope and Usability
Financial data subject to consumer and consumer-authorized access may include any transaction, series of transactions, or other aspect of consumer usage; the terms of any account, such as a fee schedule; realized consumer costs, such as fees or interest paid; and realized consumer benefits, such as interest earned or rewards. Information is made available in forms that are readily usable by consumers and consumer-authorized third parties. Third parties with authorized access only access the data necessary to provide the product(s) or service(s) selected by the consumer and only maintain such data as long as necessary.
Control and Informed Consent
Consumers can enhance their financial lives when they control information regarding their accounts or use of financial services. Authorized terms of access, storage, use, and disposal are fully and effectively disclosed to the consumer, understood by the consumer, not overly broad, and consistent with the consumer’s reasonable expectations in light of the product(s) or service(s) selected by the consumer. Terms of data access include access frequency, data scope, and retention period. Consumers are not coerced into granting third-party access. Consumers understand data sharing revocation terms and can readily and simply revoke authorizations to access, use, or store data. Revocations are implemented by providers in a timely and effective manner, and at the discretion of the consumer, provide for third parties to delete personally identifiable information.
Authorized data access, in and of itself, is not payment authorization. Product or service providers that access information and initiate payments obtain separate and distinct consumer authorizations for these separate activities. Providers that access information and initiate payments may reasonably require consumers to supply both forms of authorization to obtain services.
Consumer data are accessed, stored, used, and distributed securely. Consumer data are maintained in a manner and in formats that deter and protect against security breaches and prevent harm to consumers. Access credentials are similarly secured. All parties that access, store, transmit, or dispose of data use strong protections and effective processes to mitigate the risks of, detect, promptly respond to, and resolve and remedy data breaches, transmission errors, unauthorized access, and fraud, and transmit data only to third parties that also have such protections and processes. Security practices adapt effectively to new threats.
Consumers are informed of, or can readily ascertain, which third parties that they have authorized are accessing or using information regarding the consumers’ accounts or other consumer use of financial services. The identity and security of each such party, the data they access, their use of such data, and the frequency at which they access the data is reasonably ascertainable to the consumer throughout the period that the data are accessed, used, or stored.
Consumers can expect the data they access or authorize others to access or use to be accurate and current. Consumers have reasonable means to dispute and resolve data inaccuracies, regardless of how or where inaccuracies arise.
Ability to Dispute and Resolve Unauthorized Access
Consumers have reasonable and practical means to dispute and resolve instances of unauthorized access and data sharing, unauthorized payments conducted in connection with or as a result of either authorized or unauthorized data sharing access, and failures to comply with other obligations, including the terms of consumer authorizations. Consumers are not required to identify the party or parties who gained or enabled unauthorized access to receive appropriate remediation. Parties responsible for unauthorized access are held accountable for the consequences of such access.
Efficient and Effective Accountability Mechanisms
The goals and incentives of parties that grant access to, access, use, store, redistribute, and dispose of consumer data align to enable safe consumer access and deter misuse. Commercial participants are accountable for the risks, harms, and costs they introduce to consumers. Commercial participants are likewise incentivized and empowered effectively to prevent, detect, and resolve unauthorized access and data sharing, unauthorized payments conducted in connection with or as a result of either authorized or unauthorized data sharing access, data inaccuracies, insecurity of data, and failures to comply with other obligations, including the terms of consumer authorizations.
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