Salt Lake City, UT: Field Hearing on Consumer Access to Financial Records 11/17/2016

Welcome to the Consumer Financial Protection
Bureau’s field hearing in Salt Lake City, Utah, at the University of Utah. At today’s
field hearing, you will hear from Director Richard Cordray and a panel of distinguished
experts, who will discuss issues related to consumer access to digital financial records.The
Consumer Financial Protection Bureau, or the CFPB, is an independent federal agency whose
mission is to help consumer finance markets work by making rules more effective, by consistently
and fairly enforcing those rules, and by empowering consumers to take more control over their
economic lives. As part of the Bureau’s mission to protect consumers, to date we have handled
over 1 million consumer complaints and provided nearly $12 billion in relief to more than
27 million consumers.My name is Zixta Martinez. I am the Associate Director for the External
Affairs Division at the CFPB. Our audience today includes consumer advocates, members
of industry, credit unions, community banks, state and local officials, and, of course,
consumers. We are grateful to have the Honorable G. Edward “Ed” Leary, Commissioner of Utah’s
Department of Financial Institutions, here with us today.Let me spend just a few minutes
telling you about what you can expect at today’s field hearing. First, you will hear from Utah
Commissioner Ed Leary, then from CFPB’s Director, Richard Cordray, who will provide remarks
about consumer access to digital financial records. Following the Director’s remarks,
David Silberman, the Bureau’s Acting Deputy Director and Associate Director for the Bureau’s
Research, Markets, and Regulations Division, will frame a discussion with a distinguished
panel of experts. After the discussion, there will be an opportunity to hear from members
of the public. If you would like to provide testimony, please sign up in the front lobby.
There’s plenty of opportunity and time to do so.Today’s field hearing is being live-streamed
at, and you can follow CFPB on Facebook and Twitter.So let’s get
started. G. Edward Leary was appointed Commissioner of the Utah Department of Financial Institutions
in June 1992. He joined the department in 1997 as an examiner and rose through the ranks,
holding positions as industry supervisor and chief examiner before his appointment as Commissioner.
Commissioner Leary is a strong advocate of the state banking system and preserving the
innovation and flexibility of state chartered financial institutions. He has worked for
the preservation of state’s authority to charter and regular financial institutions and financial
services corporations. Commissioner Leary, you have the floor.
Good morning, and welcome to Salt Lake City. It’s a pleasure for me to greet you here on
a couple of levels, and I thought it would be an interesting place to start. Here, you
have chosen to hold your hearing on the campus of the University of Utah—I might mention,
my alma mater—and also, you have chosen to hold it here at the former Fort Douglas
that was an active reserve center for decades. I chose, besides my bank-regulating career,
to be a naval reserve officer coming out of the University of Utah, and after my period
of active duty, I then drilled more than 20 years just down the street at the Naval Reserve
Training Center, and this was my officers club, so talk about coming home. It doesn’t
look anything like it did then. Going back in history, while it’s fun for
some of us who have been around, it’s also very interesting when we get to hear what
we’re going to talk about today: consumer access to and ability to specify or convey
where their financial information goes from their financial institution. I’ve been involved
with regulating financial institutions for 40 years. I keep thinking we wouldn’t have
been talking about this topic maybe even 5 years ago, maybe 10 years ago, so it’s relative
certainty, relative newness of this subject. I always think it’s fascinating. There will
always be new products, new services, new issues resulting from the rollout of those
products and services. So, for me, it’s a hearing I look forward to hearing from the
Director and appreciate you coming to Salt Lake City. So, Director Cordray, thank you.
Thank you, Commissioner Leary, for the warm welcome to Utah. We really appreciate it.I
am now pleased to introduce Richard Cordray. Prior to his current role as the CFPB’s first
Director, he led the CFPB’s Enforcement Office. Before that, he served on the front lines
of consumer protection as Ohio’s Attorney General. In this role, he recovered more than
$2 billion for Ohio’s retirees, investors, and business owners, and took major steps
to help protect its consumers from fraudulent foreclosures and financial predators. Before
serving as Attorney General, he also served as an Ohio State Representative, Ohio Treasurer,
and Franklin County Treasurer. Director Cordray? Thank you, Zixta. We are very glad to be here,
and for myself, it is, in fact, my first visit to Utah, other than going through the Salt
Lake City Airport, which I’ve done more times than I could count. And I want to particularly
thank the Commissioner for his words, and we’re going to have a chance to spend a little
time later this afternoon, which I am very much looking forward to.So thank you all for
joining us today. We have a special moment right now to peer into the future and see
what we can learn, and we have a great opportunity to begin to discuss how we can help shape
the future in ways that support and protect consumers.We are here today to talk about
the new opportunities and challenges being created through digital financial records. 
Whenever consumers make deposits, withdraw funds, or make payments using their various
financial accounts, they leave a digital trail that becomes part of their financial record.
This data yields enormous insight that can empower consumers to make decisions and improve
their financial lives. The digital aspect of these records can enable great efficiencies.
Whereas once upon a time, consumers might have brought a shoebox full of paper to a
financial advisor or loan officer—maybe some of us still do that today—now consumers
can accomplish the same thing just by providing access to their digital financial records. 
This is a world full of new promise, where consumers have the chance to gain the tremendous
benefits of ease, speed, convenience, and transparency, and these are things many consumers
value enormously.Where consumers can exert control by giving their permission for specific
companies to access their digital financial records, they can access a growing number
of services from a wide range of providers.  Established financial institutions and startup
FinTech companies are pushing forward aggressively to create websites and mobile applications
that offer consumers a variety of innovative services.Some sites help consumers monitor
relationships with multiple financial institutions in one place. Others help consumers make spending
decisions and manage their money while they’re on the go.  By looking at a consumer’s transactional
history across their credit cards, bank statements, prepaid cards, and any other sources of spending,
websites or mobile apps can offer trend analysis that helps consumers understand their own
spending habits.  Some people may not realize how much they are spending each day on certain
categories of items, and these services can help them cut back and start saving for larger
goals or redirect their spending as they wish, with the consumer controlling their financial
life.Similarly, access to digital financial records can help consumers become better shoppers
and make markets more competitive. Many consumer financial products, such as credit cards and
prepaid cards, charge fees for different uses, which means the cost of the product can vary
based on what people actually do with it. Consumers are often not very good at predicting
their usage or even understanding their usage after the fact. But if consumers are able
to access their digital financial records, then new applications can help them identify
the provider whose product best serves their needs.Access to digital financial records
can be especially important to consumers who want to borrow money but lack enough credit
history to generate a credit score or whose score may not accurately reflect their current
creditworthiness. By allowing a prospective creditor to access the consumer’s transaction
account, the creditor may be able to extend the credit needed at a fair price. These are
just a few examples of services that already exist, and the future possibilities are vast.The
existence of these products and services often depends on whether consumers can authorize
access to their digital financial records. Companies that collect this information from
other providers are often called “data aggregators” or “account aggregators.”  Many of us have
little or no idea how this actually works. If you pay your taxes online through a commercial
website, for example, you may be giving a third party access to your financial records,
or you may pass on access to your investment accounts so a commercial tax website can pull
information about your retirement contributions for the year. This saves you time and effort
because you no longer have to input all the information manually on your tax forms, and
we all appreciate that.Access to digital financial records is critical. As with your student
records or medical records, your financial records tell an important story about you. With
health care, for example, if you are able to see your records, it is easier to participate
in your care and treatment. You can review what you were told, ask tough questions, and
consider other options.  You can be a better advocate for yourself.  The same can be said
for your financial records.  This is all about taking control and becoming a more active
participant in your own financial life.As we see the world changing all around us at
a rapid pace, Congress has recognized the growing need for consumers to be able to obtain
and use their digital account information.  Congress provided for the right to do so in
the Dodd-Frank Act, which states that information relating to a consumer’s transactions, including
specifically “costs, charges, and usage data,” shall be made available in an “electronic
form usable by consumers” upon request.  Rulemaking authority over this issue lies
with the Consumer Financial Protection Bureau, which also has the responsibility to pursue
the statutory objective of ensuring that consumer financial markets “operate transparently and
efficiently to facilitate access and innovation.”The technology around digital financial records
continues to develop, and so far there are many unanswered questions about how the information
is being shared, by and to whom, and how safely.  As with any emerging industry, we are hearing
about some bumps in the road.  Both FinTech companies and financial institutions, as well
as consumers and consumer groups, are describing to us the various challenges, risks, and technological
obstacles to further progress in this area. So today we are launching an inquiry to learn
more about consumers’ access and use of their digital financial records. Specifically, the
Consumer Bureau wants to know more about three things.  First, we want to be aware of what
is happening right now, especially the extent to which consumers who are authorizing access
to their financial records can choose how their records are being shared. Second, we
want more insight into the process for sharing financial records, whether it is or can be
made safe and what assurance consumers and providers will have that it can be done securely.
 Third, we want to learn about transparency and how much control consumers have over their
own financial records.  Our main goals are to encourage innovation that promotes opportunity
and to protect consumers as these new and promising technologies continue to develop. To
begin with, the Bureau wants to know to what extent consumers can authorize data aggregators
to access their digital financial records on their behalf and to share those records
in accord with the consumer’s instructions.Consumers are usually able to see their transaction
histories when they receive their monthly account statements or log in to their accounts
online. The Bureau believes that both consumers and their authorized third parties should
be able to access their records in digital format and to make sure the records can be
passed on to new providers of products or services of their choosing.  Once again,
we can see this as the modern equivalent of consumers who used to bring in their cardboard
shoebox full of information and offer it to any provider they wished, yet we have been
hearing a range of concerns about consumers’ ability to access and share their account
information electronically.  We are concerned that some financial institutions have threatened
to cut off the flow of information to some websites and mobile applications.  We also
hear of financial institutions that make consumers jump through so many hoops to access or authorize
access to their own financial records that they are discouraged from even trying.If financial
institutions that house digital financial records make it difficult or impossible for
consumers to authorize access or share their information, that blocks opportunities for
consumers to benefit from this information.  The result could be to thwart new entrants
from entering the market with consumer-friendly products or services, even those not currently
being offered by the financial institutions themselves.  For example, perhaps a consumer’s
bank does not alert its customers about how much of their existing balance they can safely
spend, given anticipated bills that are known to come due over the month.  If they are
able to share their financial records more easily, another company may devise a way to
help them monitor their spending and send them an alert when they get close to the amount
they need to cover their upcoming bills. But that service will not be available if the
company cannot access the consumer’s records.Impeding access to digital financial records not only
blocks innovation from new entrants, it also reduces the incentives for financial institutions
themselves to innovate. Without new companies introducing consumer-friendly products or
services into the market, established companies are likely to feel less pressure to compete
in this manner, and authorizing access to their financial records can make it easier
for consumers to shop for an alternative provider with more favorable pricing, given the consumer’s
usage patterns.  To be clear, it is unacceptable for financial institutions to block access
to consumer information as a means of gaining a competitive advantage in the marketplace.Of
course, many companies use customer information to help retain their existing customers and
serve them more effectively. In fact, we want markets where companies are finding ways to
use the unique information they have about their customers to identify new needs or to
offer more opportunities to improve the financial welfare of their customers, but these natural
benefits of incumbency are very different from special advantages that stem from restricting
the flow of information to competitors.  No company should be able to hoard customer information
as a way to deprive consumers themselves of the benefits of fair market competition.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. These are legitimate concerns, and we want to learn more about this. Does
the sharing of financial records impose burdens on staff time or other resources?  Are there
other legitimate concerns that the number and frequencies of these requests could overwhelm
the servers at financial institutions?We want to understand how the market is functioning
right now.  In today’s Request for Information, the Consumer Bureau is seeking to learn about
the incentives that would facilitate or discourage people from accessing and using their own
digital financial records. We are requesting more information about competition between
established financial institutions and prospective entrants to offer new financial products and
services. We want to know what obstacles, technological and otherwise, must be addressed
to facilitate access and use of digital financial records. And we seek to know more about technological
developments that are changing how consumer records are accessed and shared, as through
the automated program interfaces, or APIs, that some financial institutions, a growing
number of financial institutions, are starting to make publicly available.Our second area
of concern is that access and use must be safe.  Customers should be able to have confidence
that their financial records are secure and that they will not fall into the wrong hands.
Financial institutions that share information likewise should be confident that they will
not be exposed to unauthorized or fraudulent transactions resulting from efforts made to
access customer information.It would be problematic for everyone involved if granting access to
third parties were to compromise consumer privacy or put consumers’ funds and account
relationships at risk. Some financial institutions have suggested that providing third-party
access to account information can create significant operational risk to them and could undermine
account security. There may also be complexities around privacy protection and the assumption
of liability for breaches that can occur whenever data is being shared.It is also worth noting
that not all third-party service providers that use consumers’ financial records are
created equally. Some companies have more robust safeguards to protect consumer information
than others. These differences may create difficult challenges for financial institutions. 
Scammers and fraudsters who try to gain improper access to consumer information pose problems
here too, as they do in virtually every market.Our inquiry today seeks more information about
how financial records are obtained, stored, and used by third parties. We want to hear
from all relevant stakeholders—including consumers, financial institutions, information
users, data aggregators, and technology providers—about options to ensure that consumers can safely
access, use, and share their digital financial records. One thing we know for sure is that
the technologies are developing rapidly, and it seems likely that workable solutions will
emerge, if they do not already exist, to enable information transfers to occur smoothly and
safely.  Through our inquiry, we are aiming to understand this process better and to prod
it along as we can.Third, the Bureau wants to make sure that the access and use of financial
records is transparent and that consumers can direct the sharing and use of their personal
financial data.  It is not enough simply to have safe access to financial records.
Consumers also need to be able to control how each company that accesses their records
will use that information to improve their lives.Specifically, if consumers give third
parties access to their accounts, they should be able to dictate exactly what that access
means.  They should be able to say what information will be shared, how often access can be had,
and how long that access will last.  When consumers want to end their relationship with
a company, they should be able to do so on their own terms.So in today’s inquiry, we
want to know to what extent consumers can control how data is used by companies who
are authorized to access it.  This includes the ability to request that these companies
delete their records, or if the records are automatically deleted, when and how that happens.As
we address these issues today, the Consumer Bureau wants to understand better just what
is happening here and now, but make no mistake that our sights are set firmly on the future. 
We are not content to sit passively by as mere spectators watching these technologies
develop. We intend to keep an eye out to protect consumers, even as we encourage providers
to innovate and open up more opportunities that benefit consumers. And although the natural
reaction for many financial institutions may be to bolster fortresses around customer information,
significant business opportunities may emerge from helping consumers by sharing information
more readily with new financial innovators.In the end, we are looking for a marketplace
that is fair and works well for all participants—consumers, FinTech, big banks, community banks, and credit
unions alike. We believe we must get to a place where consumers are able to access and
share their financial records with trusted third parties, without undue restrictions.
We are confident that financial institutions and other companies can develop technological
solutions to maintain and transfer these records safely and securely, and we believe we can
achieve transparency in the use and distribution of financial account records by consumers
who can control how to initiate, manage, and terminate access to their information.We recognize
there are real tensions around many of the issues discussed today, but we believe there
is a promising path forward. Our goal is to put consumers first and to help providers
find practical ways to improve their lives.  Let us work together to do that. Thank you.
Thank you, Director Cordray.At this time, I’d like to invite the panelists to please
take the stage. While they are doing so, I will briefly introduce both CFPB and guest
panelists. David Silberman serves as the Bureau’s Acting Deputy Director and Associate Director
of the Bureau’s Research, Markets, and Regulations Division. Holly Petraeus serves as the Assistant
Director for the Bureau’s Office of Servicemembers Affairs. Keo Chea serves as the Acting Assistant
Director for the Bureau’s Office of Community Affairs. Our guest panelists Ed Mierzwinski,
U.S. Public Interest Research Group; Joe Valenti, Center for American Progress; Ryan Falvey,
Center for Financial Services Innovation; Rob Morgan, American Bankers Association;
Alaina Gimbert, The Clearing House; and Steven Boms, EnvestNet | Yodlee.David, you have the
floor. Thank you, Zixta. Good morning, everyone.
As Zixta indicated, I am David Silberman. I am the Acting Deputy Director of the CFPB—note
the acronym ADD—and also the Associate Director of the Bureau’s Research, Markets, and Regulations
Division. It’s a pleasure to be here today to moderate this panel discussion focused
around consumers’ ability to access and use their digital financial records.As Zixta indicated,
we’re going to hear from a number of respected panelists today that include both consumer
advocates and industry participants and members of think tanks. Each panel will give some
background to provide their perspective. We’ll then pose questions to our panelists and engage
in a discussion. The panel discussion will be followed by the public comments, where
we will hear from members of the public.As Director Cordray noted in his remarks, Section
1033 of the Dodd-Frank Act provides that consumers have the right to access their own financial
information maintained by a financial provider about the consumers’ use of their products.
In the past 10 months, the Bureau began to meet with consumer advocates, our sister regulators,
and market participants, including incumbent financial institutions, FinTech firms, and
data aggregators to understand the benefits and risks of facilitating such access, as
well as various access methods and technological standards.Both in Director Cordray’s keynote
speech at the Money 2020 conference last month and in our first-ever project catalyst report,
we’ve expressed concern, which the Director reiterated this morning, about reports that
some financial institutions are looking for ways to limit or even shut off access to financial
records rather than exploring ways to make sure that such access, once granted, is safe
and secure.Today the Bureau has published a Request for Information, or RFI, to seek
information about current market practices related to access to consumer financial records,
and we’re here now to learn more about consumers’ access to their digital financial records.
This RFI and this field hearing at the next steps in a process the Bureau will undertake
to engage with relevant stakeholders and evaluate any potential policy options to ensure consumer
benefits are realized and harms addressed.So with that in mind, I am going to invite our
panelists to present their opening remarks. I will ask each panelist to take about 3 minutes
to make a brief statement, after which Holly, Keo, and I will moderate a discussion with
the panelists. So why don’t we start. Ed, if I can start with you, on my far right.
Introduce yourself and proceed. Thank you, David. I am Ed Mierzwinski. I’m
with the Public Interest Research Group. U.S. PIRG is a consumer advocacy coalition federation
based in Washington with offices around the country, and I also serve on the board of
Americans for Financial Reform, which is the coalition that fought to help build and develop
the CFPB as part of Wall Street Reform and is now fighting to protect it, along with
Senator Warren, who is the instigator of it.So I appreciate the opportunity to come out here
to Utah to talk about this, and I want to build on the Director’s remarks because I
was trying to think of how to frame this. And the Director said we are looking toward
the future. We’re an agency that is looking to solve problems or develop policies that
work for everybody, and I strongly believe that. And then I think back to how did we
end up with the CFPB. Well, back in the 1990s and the 2000s, the regulators weren’t like
the CFPB. They were worse than asleep at the switch, asleep at the wheel. They stood idly
by while banks developed risky programs. Overdraft became a tremendous fee profit margin center
for banks. Payday lenders ran amuck. To be fair, the banking regulators didn’t have authority
over payday lenders exactly, but nobody did. And then the bank regulators ignored just
real abuses in the credit card market, but then the biggie hit. The bank regulators,
because they were largely captured by the banks, let the mortgage crisis occur, which
led to the financial collapse of 2008, which led to the great recession, which many communities
and states are still building out of. Millions of people lost their homes. Millions of people
lost their jobs. Millions more people lost trillions of dollars in retirement income,
and those regulators, I blame for a lot of the problem. They looked the other way. They
didn’t think about the future.Now we’ve got an agency that does think about the future,
and it’s looking at ways to guarantee consumer choice, to guarantee consumer privacy, and
also to promote innovation in the financial marketplace. It’s going to work with the banks,
maybe push them a little bit, to be willing participants in this area, but it’s also going
to encourage the new startups. And so I am very encouraged about the opportunity to file
in the Request for Information, to file a more detailed comment, but I strongly agree
with all of the points that the Director made about how we need to look forward and deal
with these issues rather than simply standing aside and letting the marketplace not have
adequate regulations. So we believe in my organization and in Americans for Financial
Reform, the idea of the CFPB needs no defense, only more defenders, and we believe that going
forward, this is an example of why we need a strong CFPB.
Thank you. Joe Valenti, Center for American Progress.
Good morning. My name is Joe Valenti, and I am the Director of Consumer Finance at the
Center for American Progress in Washington, D.C. I’d like to thank Director Cordray and
the Consumer Financial Protection Bureau for inviting me to speak here today about consumers
access to their own financial records.Consumer data is immensely valuable to companies that
collect and analyze behavior to optimize product marketing. Consumers may benefit indirectly
from these efforts if technology more efficiently matches them with what they need or they may
be harmed if, for example, the resulting practices discriminate by race or gender, but consumers
should not just see the indirect benefits from these valuable data. They should benefit
directly in ways that improve their own financial health. Indeed, the CFPB’s own definition
of financial well-being includes having control over day-to-day, month-to-month finances.And
here are three examples that illustrate how control over consumer data is consistent with
this definition. First, consumer control may lead to better personal financial management.
Firms have made it possible for individuals to consolidate their accounts on a single
platform to track income and expenses, automate transfers and savings, and identify opportunities
to manage their money better. In particular, making savings automatic is crucial to improve
savings behavior, but without standardized data formats across a multitude of platforms,
it may be difficult for these tools to succeed.Second consumer control may improve product choices.
As I noted in a recent article co-authored with University of Michigan law professor
Michael Barr, consumers’ reliance on direct deposit and electronic bill payment has many
advantages, but consumers rarely switch their accounts from one financial institution to
another because they would need to reestablish all of these automated account linkages. As
a result they may keep an account open at one financial institution, even if they could
be better served elsewhere, and are far less empowered to vote with their feet should they
find a particular bank’s practices problematic.And that brings me to my third point. Consumer
control leads to stronger accountability, as evidenced by what we’ve seen in credit
reporting. Since opening its doors in 2011, the CFPB has called on credit card companies
to make free customer credit scores public on monthly account statements. Some companies
now even offer scores to noncustomers. Making reports and scores widely available has helped
consumers identify and resolve errors, particularly when combined with the CFPB’s robust consumer
complaint system. In just 4 years, the CFPB has received over 168,000 credit reporting
complaints, many of which might have never been found or addressed without customer access
to their own data.Before I close, I do want to mention there are clearly concerns to be
resolved around data security and liability and a need to improve standards, but these
are solvable concerns that should not interfere with the principle of expanded access to one’s
own financial information.Thank you. I look forward to your questions.
Thanks. Ryan Falvey from the Center for Financial Services Innovation.
Thank you, David. It’s an honor to be here. CFSI is the nation’s authority on consumer
financial health. We lead a network of more than 120 financial services institutions from
the country’s largest banks, nonprofits, FinTech providers, and nonprofits. In addition to
an innovative partnership with JPMorgan Chase, we also run the Financial Solutions Lab, the
country’s leading FinTech accelerator program for consumer financial products. Since the
lab’s creation in 2014, nearly 600 organizations, for-profit and not-for-profit, have applied
to be part of the program. We’ve invested more closely with 18 of those organizations.
These firms include organizations like Digit and Earn that help people save, products like
Prism and Albert that help consumers plan, and even in WiseBanyan help consumers access
more affordable credit and build long-term resilience. All of these products depend on
the ability to access consumer data for a variety of uses.These two factors give CSFI
a unique vantage point from which to understand this issue. First, we know that in order for
consumers to fully understand and ultimately improve their financial health, they need
a 360-degree view of their finances. Many of the most exciting new products we’re seeing
in the market use data from many different sources to help people keep tabs on their
finances, pay off their loans, manage their bills, and save on insurance costs. And it’s
not just the FinTech startups. Many regulated financial institutions in our network are
also developing new tools to help the consumers better manage their financial health, which
depends on being able to access data from accounts at other institutions.Second, we
hear from many of the same financial institution members that they have serious and legitimate
security reputational and operational concerns about how it is accessed, shared, and stored
by third parties.Given the complexity of this issue, CFSI spent the last year drawing on
its network and researching expertise to understand the opportunities and challenges of consumer
financial data sharing. Through that work, CFSI identified five aspirational principles
that should guide the development and operation of financial services industry, and you can
download that at our website.These are the following. One, data should be available.
Consumers should have the ability to actively view their financial information with a trusted
and secure financial application of their choice. Two, it should be reliable. That means
it’s timely, consistent, accurate, and complete. Access should be user permissioned. Consumers
should provide explicit consent for access to and use of their data by third parties.
Consumers should easily view, modify, and revoke that consent. Four, it should be secure.
All entities should follow applicable laws and industry best practices with regard to
data privacy and security, and it should be limited to the application functionality approved
and only the minimum amount of data allowed should be kept.It’s clear to us that aligning
on shared principles is only the first step. We believe that there is a critical need for
industry collaboration to ensure that consumers have secure and reliable access to their financial
data and support continued innovation. Ultimately, we want to see as a data-sharing ecosystem
that provides security and control for all consumers is inclusive of small institutions
and generates trust among all market participants. Thank you.
Thank you. We’ll move to my left. Rob Morgan from American Bankers Association.
Great. Thank you for having me. It’s great to be back in my hometown. I’m Rob Morgan
with the ABA. The ABA represents the nation’s diverse banking system, and thank you for
the opportunity to chat about this very important issue.Technology is rapidly changing how customers
engage in banking and manage their financial services. Banks are innovating and partnering
with startups to help make these innovative technologies available to their customers,
but while banks implement some of these technologies, we need to move very deliberately to manage
the risks associated with these technologies and make sure that consumers remain protected.In
recent years, a number of companies have emerged offering data aggregation services. These
services help facilitate bank-FinTech partnerships and give customers access to the innovative
products that they love. They also do introduce new risks into the system that need to be
carefully managed. So let me be clear. Banks fully support and are working to ensure that
customers have the ability to safely share and control their data. This process is not
as easy as flipping a switch, like some have suggested. There are a lot of parties that
need to work together here. The nation’s over 6,000 banks, their technology providers, the
data aggregators, and their end users all need to come together to figure out how to
make this work.Beyond these technical challenges, there are a couple of key issues that need
to be addressed. Key among these is how we ensure that customers have security, transparency,
and control when it comes to their data. So the first issue is security. Customers deserve
bank-level security, regardless of where they choose to share their data. According to a
Accenture, 86 percent of customers choose banks first to manage and to keep secure their
data. This compares to just 2 percent who choose consumer technology companies to do
this. There is a reason for this. Banks have strict rules and strong oversight that ensures
that this data is as secure as possible. Common practices today that require users to give
up their user name and password introduce a lot of new risks to those customers that
they may not realize they are taking on. Additionally, they may also be forfeiting some of their
consumer protections, as many data aggregators limit the liability in user agreements and
require their customers to grant them power of attorney.The second key issue is transparency.
Customers have the right to know where their data is being shared and how it’s being used.
In particular, it should be clear to customers what data is being accessed, how long that
data is being held, and how it’s being used. Next is the issue of control. Customers should
have control over what data is shared and how that data is used. Today, when a consumer
forfeits their login credentials, they give data aggregators access to their full account
data for an unlimited time period. Instead, customers should have intuitive controls that
allow them easily to control and see who is receiving their data, modify the access, and
revoke that access. Clearly, there is a better way forward to empower customers to share
this data than requiring them to give up their login credentials. The good news is I think
we’re all on the same page and want to get to the same place, where customers get innovative
services in a safe, secure environment. In order to accomplish this, there’s a lot of
work that needs to be done and serious issues to address. Banks are working on developing
the systems to make this possible, and ABA stands ready to help industry as we come together
and solve these challenging issues. Thank you.
Alaina Gimbert from The Clearing House. Thank you, and good morning, everyone. The
Clearing House appreciates the opportunity to participate in this panel today and discuss
important issues related to third-party access to consumer financial information. As a payments
company and as a banking association owned by the largest commercial banks in the country,
we fully support third party access as long as it’s achieved in a manner that protects
consumers from harm and further protects the safety and security of the financial system.Over
the past several years, the financial services industry has seen the rapid development of
companies providing consumers with online personal data aggregation services. By gathering
and presenting data from unaffiliated financial institutions, often on a real-time basis,
data aggregators are able to provide consumers with the ability to assess their financial
resources on a relatively quick, current, and comprehensive basis.In addition, some
data aggregator services go beyond the mere sort of collection and presentation of consumer
information but also include data verification and transaction processing, such as bill payment
for the consumer. While the industry encourages development of innovative financial services
for consumers and is committed to meeting their customers’ needs for data aggregation,
the design and delivery of these services must principally be guided by safety and soundness
considerations, particularly as they relate to consumer protection.Data aggregators’ core
practice of using a consumer’s confidential and protected login credentials, the user
name and password, to gain access to a bank’s highly secure environment and the consumer’s
highly sensitive financial information has raised justifiable concerns. Banks are particularly
concerned with, first, the privacy and security of consumer financial information as it moves
out of the bank’s environment and into an environment that is less regulated and supervised;
secondly, the lack of clarity or scope regarding consumer disclosures and consents that are
provided to or obtained by the data aggregators. And on this point, I think it’s important
to note that once a consumer has enabled a third party to go into their online banking
account, that third party can technically do anything that the consumer herself could
do when she’s online. So make payments, sign up for new services, request a loan, things
like that can all be enabled once the data aggregator is inside their account. Third,
the potential for breaches of data aggregator systems and the related potential exposure
of consumers’ private financial information or unauthorized transfers from their accounts
resulting from such breaches; and lastly, the extent of consumer liability that can
result in the event of a loss is suffered. On this last point, we note that most data
aggregators and their contractual terms significantly limit their own liability, which in turn significantly
increases consumer liability, though consumers may not be aware of this.We think all these
risks are best addressed through both operational and legal relationships between data aggregators
and banks. Such operational and legal arrangements enable banks to meet their legal responsibilities
to their customers and their safety and soundness responsibilities to the financial system.
Thank you. Thank you. Finally, Steven Boms from Yodlee.
Saving the best for last, David. Thank you very much.
Indeed. Well, thank you for the opportunity to testify today. I am pleased to share the
perspective of EnvestNet | Yodlee, a leading global account aggregation platform provider.
Yodlee provides a safe and secure consumer-permissioned account aggregation and other online services
on a business-to-business basis to about 60 million registered consumers around the world.
The Yodlee Consumer Permission Data Platform enables innovative tools across a wide range
of needs and the power of consumers to improve their financial well-being safety and securely.
These tools include simple budgeting programs, automated savings applications, expense tracking
applications, solutions that optimize fixed incomes and help consumer avoid late payment
fees, and wealth management services, among many, many others.Through our 17-year history,
Yodlee has built deep relationships with both traditional financial institutions and financial
technology companies. Yodlee accounts for more than 1,000 companies as our customers,
including 12 of the top 20 U.S. financial institutions. Leading-edge security tools
and regulatory oversight are paramount in the data aggregation space. Accordingly, Yodlee
is supervised and examined by the Office of the Comptroller of the Currency and has completed
approximately 200 audits by our bank partners over the past 24 months. At Yodlee, we believe
passionately in the democratization of data. The notion that consumers have an absolute
right to access and permission their banking and other financial transaction information
safety and securely in real time to reap the benefits of the innovative new tools that
advances in technology have enabled. According to the Federal Reserves’ 2016 survey on Americans’
economic well-being, one-third of Americans are struggling financially, and 42 percent
of Americans are unable to pay their bills at least one month within the last year. Nearly
half of American households would have to incur debt or sell assets to pay for a surprise
$400 expense. In our view, the only sustainable path toward improving Americans’ financial
lives is one that allows Americans to leverage intuitive, powerful technology functions that
rely on access to their financial information via the tools and providers they choose to
help them improve their financial health.Congress widely recognized the importance of consumers
retaining access to their financial data. Section 1033 of the Dodd-Frank Act presciently
codified this right to assure that consumers are given the opportunity to take advantage
of the broad range of technology-powered, data-driven tools that are available in the
market to empower them to improve their financial health. With that said, today’s field hearing
is a timely one. Despite Section 1033 of the Dodd-Frank Act, the Americans’ access to their
financial transaction data to power these impactful tools is under threat. Some U.S.
financial institutions have instituted a range of technical and administrative hurdles that
interfere with the consumers’ rights of access to their own financial data. Financial institutions
have moved to limit the amount of data that consumers can share or are seeking to define
bilateral agreements with onerous contractual terms that would restrict a consumer’s ability
to take full advantage of marketplace solutions. As a result, there are an estimated number
of cases where consumers are excluded from engaging with services provided by the financial
technology community best suited to improve their financial well-being.To remedy this
situation, we propose the creation of a Consumer Bill of Data Rights that codifies the consumer’s
absolute right to control access to their own financial data and in turn to utilize
the power of technology to improve their financial well-being. We recognize that financial institutions
operate in a highly complex regulatory environment with legal and moral obligations to protect
their customers’ assets. We, therefore, believe that the consumer’s right to their financial
data should be granted in a balanced principled ecosystem that defines the responsibilities
to all players in the markets—consumers, financial institutions, aggregators, and FinTech
providers. Above all, the consumers’ best interests should be the collective goal of
all the players in this ecosystem.The democratization of data comes with requirements for all stakeholders
in the 21st century as financial services systems, all in support of enabling and protecting
the American consumer and their financial data. The growth of financial technology sector
brings with it immense opportunities to empower Americans to take better control of their
finances and in turn to offer their children the essence of the American dream, a life
better than their own. Thank you once again for the opportunity to testify today.
Thank you, and let me thank all the panelists for their thoughtful opening remarks. So Holly,
Keo, and I will now engage the panelists in some questions and answers to try and engender
some interesting dialogue.And let me start with you and ask whether in your experience,
consumers understand the risks and benefits of using the tools that aggregate their financial
records. I don’t think consumers, except for the percentage
who are already in the game—I don’t think consumers really know enough about it. Absolutely,
there are some risks of data security or the company possibly using information for some
other purpose, but I think those are all risks that can be fixed. And I think they are all
risks that can be fixed by government standards.As for the benefits, no. More people would be
out there doing this and participating in this marketplace and taking advantage of the
new choices that they had if they knew about it, but I don’t think consumers understand
either the risks or the benefits. That’s why this hearing is very important. That’s why
your Request for Information is very important as well.
Thanks. Holly? I have a question for Steve Boms. What types
of products and services are currently made available to consumers that rely at least
in part on consumer-permissioned electronic access to consumer financial records, and
how does that benefit consumers? Thanks for the question. It’s a great one.
In our view, the benefits of the innovations of technology are that they meet consumers
where they are at every stage of their life cycle. So there are, for example, products
and services in the personal financial management space that empower consumers to establish
budgets, to monitor their spending, and to establish good financial habits.As I mentioned
in my opening remarks, there are tools that enable consumers to optimize fixed incomes.
There are tools that help consumers avoid fees charged by their financial institutions,
like overdraft fees or late fees. Consumer data enables automated savings platforms and
help consumers boost their savings beyond what they would normally put away. With consumer
permission data, investment platforms can optimize investment strategies for consumers,
help them comfortably in retirement. Data power solutions can also help with account
verification and fraud reduction, which is also helpful to financial institutions, as
well as compliance in areas including responsible lending and investment advice. And those are
just the solutions that we do right now. Who knows in 5, 10 years from now what new innovations
will come to this market? Keo.
This question is for Joe Valenti with the Center for American Progress. Why do consumers
need access to their financial records through third parties, and how should this be balanced
with a desire for security and privacy? Great. So, first of all, I do want to point
out that the liability issues here are real, and they are issues that we see across the
space of mobile apps and technology in general. But this is really a case where the genie
is out of the bottle, even though many people may not understand or appreciate some of the
risks that are involved.It’s great for financial institutions to offer opportunities to use
their financial data better on a first-party basis, but that’s going to be uneven across
institutions, and relying on third-party providers offers several benefits. One is to unlock
opportunities that a particular financial institution may not offer. Another is to deal
with the challenge of unbundling or an environment where an individual probably does not have
a checking account, a savings account, a retirement account, a mortgage, and a credit card, all
with the same financial institution. All these different products are increasingly spread
out among multiple players, and we see evolution in this space. We see prepaid accounts that
look like bank accounts, as an example.Ultimately, the goal of expanding access to one’s own
records needs to be where we focus our energy data that’s kept in secret, maybe erroneous,
inaccurate, or non-verifiable, as we’ve seen with credit reporting.I would argue that we
do need to have better protocols and standards for data security. We need to have the ability
to modify or revoke consumer consent or to control whether an entity is able to view
your records versus being able to change or move around money that is in your account.
We also need to pay attention to equal protection issues and the risk of discrimination or improper
practices by some of these actors, but on balance, consumers are better off if they
can access their records through third parties conveniently and safely.
Alaina, what incentives or disincentives exist for financial institutions to facilitate or
discourage consumer-permissioned access to their financial records?
Sure. So think fundamentally banks want their customers to be happy. That’s how their customers
stay their customers, and so their incentive for allowing access is to keep what’s sort
of evolutions in the marketplace and to stay competitive. So there’s intense competitive
pressure for banks to make data aggregation work.That said, banks are subject to extensive
safety and soundness requirements as well as consumer protections, and so I won’t describe
that as a disincentive, but it is the reality in which banks operate. And so anything that
they do to enable services by data aggregators has to be done in a way where the bank feels
comfortable that there’s not going to be harm to consumers and that they can still meet
their regulatory requirements and their own internal sort of risk levels.
Holly? This one is for Ryan Falvey. In what way should
financial institutions consider consumer concerns and interests regarding access to their financial
account data, and are there any gaps that need to be addressed?
Thanks, Holly. Our principles were designed for consumer financial institutions to be
able to put consumers at the center of this discussion and their interactions in this
issue. So for each of the principles we identified, we outline specific practices that we think
entities who are in this value chain can execute to bring consumer interest to the fore. So,
for example, in availability, we really think collaboration between financial institutions
and third parties is critical to allow that to happen. Those entities should work together
to vet those entities that are touching the data and develop standards for how that should
work, and reliability, entities should coordinate and figure out data definitions and develop
when data is pulled, the requirements to enable that kind of connectivity, and also provide
a clear error resolution channel for consumers. On consent, it’s quite straightforward consumers
should consent to access to provide their data, and they should have mechanisms that
turn data off. Security, this is one area, I think, that was challenging for us as we
work through these principles. There’s a lot to dig into there. Certainly, whatever we
go down needs to take best practices and security and instill that as part of the process.And,
finally, on minimization, we really would want to push industry to avoid bringing excess
data and taking risks of holding data that’s not necessary for long periods of time. So
that means just defining the minimum data needed for an application functionality and
then defining how long that should be stored to allow that application to work.As I said,
principles are out without significant gaps. One of those is it is not at all clear how
we can fully and securely include the small financial institutions into the data-sharing
ecosystem. Many of the technology solutions currently available might be challenging for
resource constraints of smaller institutions. We do not believe that technology standards
should be a barrier to competition, so an industry-wide solution is needed to enable
consumers to choose small institutions and allow those small institutions to compete
for providing better products for consumers.Legacy system infrastructure generally probably needs
to be upgraded to enable this to occur. That probably means inviting partners to the table
who we might not normally think about, so those are credit card banking systems, modular
software, and helping to figure out how we can develop some standards that can really
apply across a whole swath of financial institutions.And, finally, I think the industry might struggle
to develop functional and flexible technical implementation details, omit some of the competing
business interests, without encouragement and guidance from policymakers. The principles
we created are guidelines. Many of them, the practices for these goals cannot be implemented
without more detailed standards, and this will require time resources and buy-in across
industry. While that private-sector coordination is occurring, we do think the process could
be encouraged and supported with positive government and policymaker engagement here.
Keo? This question is for Rob Morgan. What are
some of the challenges that smaller financial institutions like community banks face in
securely sharing their customers’ financial records?
This is a great question. Thanks. Community banks face a really unique set of challenges
in trying to facilitate this safe sharing of consumer data, and I think the first challenge
is really in their scale. Most community banks are simply not big enough to be on the radar
of a lot of the data aggregators.I was having a conversation with a bank the other day who
is the second largest bank by market share in the Denver area, and they have never been
approached by any of these aggregators. So they are left with two options. When the requests
come in from some of the aggregators, they can see that these are automated requests.
They can either shut those off and do wrong by their customers, or they can open them
up wholesale, without being able to have conversations about how to put the proper protections in
place to make sure that they are comfortable with what’s happening with their consumers’
data.So the second key issue is a technology one, and community banks are heavily reliant
on their core technology providers. Without the support of these technology providers,
they are not able to roll out new innovative products to their customers. So I think the
core providers play a really key role here in helping enable the community banks to build
this more secure way to share customer data. Great. Thanks. Let me ask a final question
for all the panelists, and that question is, in the absence of regulatory action, do you
believe industry, other stakeholders will develop standard practices to allow sufficient
access to consumer records by permissioned parties while balancing the concerns of financial
account data holders? Why don’t we go in the same order in which we opened. So, Ed, start
with you and come down the line. Thank you for the question, David. I was born
at night, but it wasn’t last night. In my almost 30 years as a consumer advocate, I
can tell you that the offer of creating voluntary standards is one that industry makes all the
time to delay regulation or to delay legislation and to delay customer protections. So I don’t
think this will work unless we have enforceable minimal standards by a federal agency, and
I strongly recommend that no rules work unless they are basic underpinning, is enforceable
by either a federal or a state regulator. It’s got to happen. Otherwise, consumers lose,
and this is another reason we need a strong CFPB because the CFPB can be the agency that
is visionary enough to look at this issue and look at the benefits to all parties, but
also to protect consumers. Joe?
Thank you, David. I would agree that the answer is no, that this is an area where individual
consumer access must be ensured through regulation because I don’t see it as something that is
likely to happen voluntarily. It’s really a collective action issue at its heart.And
I’d go back to what I mentioned earlier about access to your individual bank account records
and how challenging it is to switch from one bank to another, that you would need to reestablish
all of these linkages from scratch, and bank accounts unfortunately are not portable the
way that cell phone numbers are or the way that, for example, postal mail forwards. This
is a case where I can’t imagine any institution wanting to be the one who goes first, but
ultimately, all would benefit in a more competitive marketplace where people could, for example,
move their money not only from one large financial institution to another, but to smaller community
banks and credit unions if that’s what they would choose and that’s what best serves their
needs.I also see the need for regulation as being a matter of trust. A recent Gallop poll
had reported that only about one in four Americans have either a great deal of confidence or
quite a lot of confidence in banks, and having standards across the board that are enforceable
by an agency like the CFPB, I think, could go a long way to building that public trust
in the financial sector. Ryan?
So I think we think this is an area that is kind of ripe for a principles-based approach.
The emergence of these new intermediaries and financial data from sources have really
helped traditional financial institutions to better understand their own consumers and
contribute to a rapid growth of third-party innovation. They have empowered consumers
to see, to manage their financial lives in new ways and really entirely new product categories
that didn’t exist a year ago, 2 or 3 years ago. So, in short, it’s a rapidly changing
space.We’re seeing innovation from large regulated financial institutions, developing API banking
platforms, new dashboards to allow consumers to give them greater control over how they
control their data. We’re seeing really interesting new products launched not just by FinTech
providers, but we work with a nonprofit in San Francisco called Earn, which helps to
do matched savings for very low-income Americans. They’re using aggregator technology to expand
their service outside of the traditional area to entirely new markets and grow at a rate
that’s just exponential compared to what they were doing before.So, given that dramatically
changing environment—and also, I think our sense of the vast majority of the actors at
least that we’re engaging with seem to have the consumers’ best interests at heart, we
hear from our stakeholders the desire for guidance on top-line issues, but spaced to
adapt to market demands, such that at this stage, we would encourage the CFPB to consider
providing industry guidance to be a principle versus prescriptive rules. Arguably, Director
Cordray’s comments last month and today certainly help providers to understand how the market
is evolving, but for regulated financial institutions, questions of liability, cost, and security
remain at the fore. For aggregators, there are concerns about connectivity, data quality,
and the ancillary uses of data. For FinTech providers, there are serious questions about
the quality of the data they’re receiving, the cost, and the consumer experience of accessing
that data.To us, the most important stakeholder part of this conversation is the end consumer
who stands to gain through innovation, new products, and greater competition, and this
voice needs to be part of the conversation, and it’s this voice that the CFPB can bring
to the table as a critical player in this industry and in this dialogue. And I think
that guidance from the CFPB on how we can drive forward on some of the trickier implementation
issues would be really valuable.So we’d encourage the CFPB to continue to play—to study this
issue, engage with industry, and at least in the near term take potentially a less prescriptive
approach to setting rules and rather focus on the principles toward what they want the
private sector to strive. Ultimately, we’re optimistic about the industry’s ability to
come together around shared standards and best practices and are looking forward to
playing that role in the coming months. Thank you. So, in short, I think yes. I think
industry has already started to come together to push some of these standards forward, and
I think today’s conversation, you construction see that that conversation has really begun
already.At the end of the day, everyone here wants the same thing. We want a more secure
portal to help push that access that gives the consumer control. There are a lot of banks
working today on platforms that can enable this. Joe, I know you said no one wants to
go first, but there are a lot of banks that have gone and pushed out open platforms that
are enabling this more secure way to share data. So I think these parties are coming
together.As we push this forward, I appreciate the remarks earlier to the effect of looking
out to the future. I think we need to look 10 years down the road, where the type of
data and the technology for sharing it is going to be very different. So we need industry
to collaborate here, to come up with a set of standards that’s flexible enough to allow
for that type of innovation, not a strict set of standards that could actually limit
innovation going forward.This being said, I do think the CFPB has a strong role to play
here, first, in terms of education, making sure that customers are fully aware of their
risks, and the benefits, when they choose to share this data and how they do it. And
I think hosting conversations like today are really an important aspect of this as well.
Getting industry together and facilitating these types of conversations, whether it’s
through hearings like this or through Project Innovate or some of the efforts that even
the OCC has taken to help support innovation are all really important venues to have these
conversations. Thank you. Alaina?
I agree. I believe it is possible to kind of get where we want to go without prescriptive
regulation, and I would point to the work that’s happening today in the faster payment
space. The industry sort of with the good facilitation of the Federal Reserve has moved
forward, and we are moving payments faster or going to be moving payments faster very
soon. And that’s totally been done without regulation. So I think our expectation at
The Clearing House—because as I listen to us all today, I don’t hear us being that far
apart, frankly, in what we’re concerned about and where we want to go, so I think that we
can—I think we’re pretty close to aligned. I think we can probably get enough aligned
in our interests that we can sort of work on our own. I think the CFSI principles are
a great start. So I think we can do this without regulation and that we can find sort of practical
ways. I think when industry works on things together, I think we come up with things that
are practical and commercially viable and things that will sort of hold true 10 years
down the road. The best for last again. Steve.
Thanks. So I think we probably have a bit of an evening perspective. We’ve been in this
market for 17 years. We’ve built good relationships and strong relationships with FinTech players
on the one hand and financial institutions on the other hand, and we have done that in
the absence of regulatory action throughout the almost last two decades now. I would largely
agree with what you’ve heard, which is that we think that all the players in this ecosystem
have a role to play, as I said, so consumers, financial institutions, aggregators, FinTech
companies. The key difference in our perspective, though, is we don’t think you can establish
those responsibilities until the consumer’s absolute right to access and permission their
data has been asserted and aggressively protected by a government entity like the CFPB.So, therefore,
we would say that we think the industry is more than capable of determining the responsibilities
for safe and secure data access, permission sharing, in addition to good governance and
balances of innovation with safeguards, disruption with competition, and protection with empowerment,
but to get there and to foster that conversation, our recommendation with the CFPB in addition
to some other regulators should assure the consumer’s right to their data to help them
improve their financial health. Thank you. So this concludes the panel portion
of our program. Let me ask you to join me in thanking all the panelists for a thoughtful
discussion. Now let me invite the panelists to return
to their seats and turn the program back over to Zixta Martinez, our Associate Director
for External Affairs, who will moderate the next portion of the field hearing.
Thank you, David, and let’s give another round of applause to our panelists today.
An important part of how the Bureau helps consumer finance markets work is to hear directly
from consumers, from community banks, from credit unions, from members of the industry,
from our state and local partners, and from community advocates across the U.S. One of
the ways the Bureau gathers public feedback is through events such as these. We have held
field hearings, town halls, and other gatherings across the U.S., from Miami, Florida, to Itta
Bena, Mississippi, to Seattle Washington. At these events, we not only hear from experts
in the field, we also invite the public to participate.Before I open the floor up for
public comments, I want to remind folks that there are several other ways to communicate
your observations, your concerns, or your complaints to the CFPB. You can submit a consumer
complaint with the CFPB through our website at Our website will walk
you through that process, or you can call 1-855-411-2372. The CFPB takes complaints
about mortgages, car loans and leases, payday loans, student loans or other consumer loans.
We take complaints about credit cards, prepaid cards, credit reporting, debt collections,
money transfers, bank accounts and services, and other financial services. If you don’t
have a specific complaint but would like to share your story with us, we have a feature
on our website called Tell Your Story, where you can tell us your story, good or bad, about
your experience with a consumer financial product or service. Your story will help inform
the work that we do to protect consumers and create a fair marketplace. We have another
feature called Ask CFPB, where you can find answers to over 1,000 frequently asked questions
about consumer financial issues as well as additional resources. We have a Spanish language
website called CFPB en Español, which provides access to essential consumer resources as
well as answers to frequently asked questions. I encourage you to visit
to learn more about the resources and tools that the Bureau has developed to help consumers
make the best decisions for themselves and for their family.Now it’s time to hear from
members of the public that are here today. A number of you have signed up to share comments
and observations about today’s discussion. The public comment portion of the field hearing
is also an important opportunity for the CFPB to hear about what’s happening in consumer
finance markets in your community. Each person who signed up to provide public testimony
will have about 2 minutes to do so, and we are eager to hear from all of you.Our first
commenter is Nick Thomas. Mr. Thomas, we’re bringing a mic to you. Thank you very much.
My name is Nick Thomas. I am co-founder of Finicity, a leading financial aggregator,
and co-founder of Mvelopes, a leading consumer budgeting app and financial literacy platform.
We’ve been helping consumers improve their financial lives for the last 17 years and
are leading standards initiatives like OFX to standardize the industry, as have been
talked about today. My question is regarding the definition of usable data, as mentioned
in Section 1033. Today, the time lapse between a financial account event and transaction
data availability via data aggregation can take several days. Section 1033 states that
data should be made available in a usable electronic form. Do you see real-time data
delivery an important aspect of data usability? Thank you for the comments. We’re not answering
questions at this point but really appreciate that you’ve identified something for us to
really think about and digest. Ryan Christianson. Thank you, Mr. Christianson. Adam Thorpe?
Adam Thorpe? Jeanetta Williams.
I want to thank you first for being here and allowing us to make comments this afternoon.
My comments would be on the payday lenders, and presently, there are roughly about 36
states currently allow storefront payday loans, and of those, all but 7 put some cap on how
much interest the lenders can charge. Utah is one of the non-cap states, and because
of that, lenders here charge an average of 482 percent annual interest on those. There
have been loans made in Utah with annual rates as high as 1,564 percent. In states with the
most restrictive regulations, the average rates are around 250 percent, according to
a study by the Pew Charitable Trust.Now, the study also shows that in permissive states
like Utah, more people tend to take out payday loans than in states where rate and fee caps
are in place. All of this speaks to the need for our legislature to consider the kinds
of regulation embraced by our neighboring states, Colorado and Wyoming, which have lower
than average rate caps, but it also speaks to the lobbying clout of the payday loan industry,
which has been known to shower key politicians with healthy campaign contributions, and there
is a very strong need for the CFPB to stay in place. And we appreciate the work that’s
being done, and we appreciate Director Cordray for his comments today, and also, I have met
him before and talked with him. And I appreciate the work that he’s done with the NAACP and
our director, Hilary Shelton. Thank you, Ms. Williams. Thank you to all
that provided thoughtful testimony today. Thank you to the audience, to the panelists,
and to all those watching via livestream at This concludes the CFPB’s
field hearing in Salt Lake City, Utah. Have a terrific afternoon. Thank you.

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