Democrats and Republicans discover commonalities on information sharing

Several high-ranking legislators who seldom settle on anything discovered commonalities at a hearing Tuesday in assistance of customers’ right to manage their own monetary information.

Lawmakers on both sides of the aisle questioned the prevalent practice of screen scraping at a House Financial Services Committee hearing that looked into problems that the Consumer Financial Protection Bureau will resolve in a rulemaking anticipated by April 2022.

Several legislators mentioned information that reveals customers have bit, if any, understanding of the method lots of fintechs and information aggregators gain access to client account information by scraping the details with a customer’s login qualifications.

“People aren’t aware that [screen scraping] is going on. They should be told. There should be options presented to them,” stated Rep. Blaine Luetkemeyer, R-Mo., at a hearing of the committee’s Task Force on Financial Technology. “The first way to protect people’s privacy and information is to be honest with them upfront and say this is what’s happening with your information and how we’re accessing it.”

House Financial Services Committee Chairwoman Maxine Waters, D-Calif., stated the hearing entitled, “Preserving the Right of Consumers to Access Personal Financial Data,” revealed that there prevailed ground amongst Democrats and Republicans.

Lawmakers on both sides of the aisle, consisting of House Financial Services Committee Chair Maxine Waters and Rep. Blaine Luetkemeyer, R-Mo., questioned the prevalent practice of screen scraping at a House Financial Services Committee hearing.

Bloomberg News

“It seems as if I am agreeing with Luetkemeyer for the first time since we have served on this committee together,” Waters stated. Leutkemeyer and Waters have actually served on the House committee together for ten years.

Enormous quantities of information about a person’s individual and monetary details are now gathered, kept and frequently offered to 3rd parties by monetary services business. The information is utilized to offer product or services that enable customers to handle their individual financial resources and carry out other jobs such as setting objectives for how to conserve cash.

The Gramm-Leach-Bliley Act enables customers to pull out of having their information shared. But a number of professionals and legislators stated customers seldom check out the little typeface buried in contracts specifying that they can withdraw their permission.

Waters stated customers ought to have the capability to decide in to data-sharing.

“I want to know about opt-out as opposed to opt-in,” Waters stated. “Most people don’t know … that if you don’t opt out, your information is shared with a third party, the third party is sharing information with somebody else, [and] somebody else shares the information and then you get all these solicitations.”

Other legislators revealed issue that the market is light years ahead of regulative policy.

“We all agree on the importance of protecting consumers’ control over their own financial data,” stated Rep. Stephen Lynch, D-Mass. “But there’s a question whether both regulators and policymakers alike are moving fast enough to address the uncertainties in this area. I’m not convinced that we are.”

The CFPB presently remains in the thick of composing a data-sharing guideline, needed by the Dodd-Frank Act, that intends to clarify requirements for how fintechs gain access to checking account information. Banks have long challenged evaluate scraping even as banks and aggregators have actually been approaching collaborations to send out information to fintechs utilizing application shows user interfaces.

Lawmakers directed much of their concerns at Tom Carpenter, director of public affairs and marketing at the Financial Data Exchange, a Reston, Va., not-for-profit that is working to set innovation requirements.

Carpenter got one of the most flack over screen-scraping problems. FDX is attempting to move the market towards APIs and far from screen scraping, however he kept in mind that the latter is still the more typical path by which a fintech supplier accesses a client’s account information.

Screen scraping is “an old innovation, it’s not a best innovation, [but] it likewise is what is providing the development that we have today in the competitive monetary services market,” Carpenter stated. “I would argue that without the ability of a consumer to access and share their own data via screen scraping, we would not have had the explosion of competition in financial services.”

Consumer supporters, on the other hand, are advising the CFPB to develop guidance authority over big information individuals consisting of the 3 significant credit bureaus: Equifax, Experian and TransUnion.

Chi Chi Wu, a personnel lawyer at the Consumer Law Center, asked legislators at the hearing to move the information security authority in the Gramm-Leach-Bliley Act over credit bureaus and information aggregators to the CFPB.

“We think the consumer should have maximum control over their own data,” stated Wu. “The nightmare scenario is a system where every consumer … is forced to give up their privacy and allow each creditor, lawyer, insurance [company], landlord and government agency a direct and permanent digital pipeline to their bank account data. It’s up to the regulators and ultimately Congress to make sure that this data promotes consumer welfare without hurting our interests.”


A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

Related Articles

Back to top button

Adblock Detected

Please turn off the Adblocker