CFPB Urges Extended Compliance Period for Consumer Financial Data Rule

The Clearing House AssociationThe Bank Policy Institute, the Consumer Bankers Association and the American Bankers Association sent a letter to the Consumer Financial Protection Bureau late Tuesday asking the bureau to extend the deadline for compliance with its upcoming rule governing consumer financial data known as Section 1033. The letter recommends that the first tier of banks required to comply with the rule be given at least two years to comply with the new rule. This would allow banks enough time to develop new systems and processes and for a standards-setting organization to be recognized by the CFPB.

“Banks have spent years developing systems that enable secure data sharing for 50 million customers and overhauling those systems to comply with this new rule will take time,” the Associations declared when filing the letter. “In the interest of protecting customer data and avoiding disruption, it is better to do it right than to do it quickly. Banks are committed to serving their customers and complying with the law, and we encourage the CFPB to recognize the complexities of the new requirements and establish pragmatic timelines that allow for a smooth implementation without disruption to access to consumer data.”

In their letter, the associations highlighted significant operational obstacles, including:

1. Implementation challenges: Banks will need to update technologies, standardize data, develop operating policies and procedures, create new features, collaborate with third-party partners, and update publicly available resources.
2. Coordination and collaboration: Existing third-party agreements will need to be reviewed, and banks will need to coordinate with those entities to amend those agreements to meet the new obligations.
3. Standards definition procedures: The CFPB has just finalized a rule that establishes the procedures for a standards-setting body to seek and obtain CFPB recognition, which will be a lengthy process. The process by which a standards-setting organization would develop consensus standards would take even longer.
   The associations also recommend extending compliance deadlines for subsequent groups of entities by 18 months, consistent with the phased approach proposed by the CFPB to ensure that all stakeholders have sufficient time to meet the new requirements.

To access a copy of the letter, please Click here.

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