If you haven’t started looking into the CFPB’s Proposal for implementing Section 1033 of the Consumer Financial Protection Act (CFPA), you should. The purpose behind it is to give consumers the ability to easily “break up” with their financial institution and find another in a more seamless way. The CFPB believes this proposal will increase competition and ultimately improve customer service and lead to more favorable terms. CFPB Director Chopra has stated:
With the right consumer protections in place, a shift toward open and decentralized banking can supercharge competition, improve financial products and services, and discourage junk fees…we are proposing a rule to give consumers the power to walk away from bad service and choose the financial institutions that offer the best products and prices.
So, what does the Proposal entail? In a nutshell, you will be required to provide certain consumer data to authorized third parties electronically upon request and adhere to any standardized formats prescribed by the Rule. The Proposal also sets out obligations for and limitations on third parties that might access the information.
Published
2024/02/07