On February 26, 2020, the Consumer Financial Protection Bureau hosted a symposium titled “Consumer Access to Financial Records.”  Video of the Symposium is available here.  The agenda included discussion among panelists from large financial institutions, fintechs, consumer groups, policy centers, and the CFPB.  Director Kathleen L. Kraninger also delivered brief opening remarks describing the history of regulation of financial data access.

Much of the symposium’s discussion focused on Section 1033 of the Dodd-Frank Act, which governs consumers’ rights to access their financial data.  While the CFPB has the authority to issue rules interpreting Section 1033, it has not done so (although it has issued non-binding “Consumer Protection Principles” on financial data sharing and aggregation).


Continue Reading CFPB Hosts Symposium on Consumer Access to Financial Records

The House Financial Services Committee (“HFSC”) announced that it will convene hearings this month to consider both the trend of financial technology firms partnering with chartered banks to provide financial services and the rise of mobile payments. More information about the hearing schedule is available on the HFSC’s website.
Continue Reading House Financial Services Committee to Consider Two Fintech Issues In January

On December 19, 2019, the Office of the Comptroller of the Currency (OCC) appealed a decision from the U.S. District Court for the Southern District of New York holding that the OCC cannot offer special purpose national bank charters to fintech companies. Lacewell v. Office of the Comptroller of the Currency, Case 1:18-cv-08377 (S.D.N.Y. Sept. 14, 2018).
Continue Reading OCC Appeals Fintech Charter Ruling to Second Circuit

On December 10, the Federal Trade Commission (“FTC”) and Consumer Financial Protection Bureau (“CFPB”) held a joint workshop on accuracy in consumer reporting. The workshop included remarks from FTC Commissioner Noah Joshua Phillips, CFPB Assistant Director for Supervision Policy Peggy Twohig, CFPB Deputy Director Brian Johnson, and FTC Deputy Director for the Bureau of Economics Andrew Stivers. The workshop included four panels:

  • Panel 1: Furnisher Practices and Compliance with Accuracy Requirements
  • Panel 2: Current Accuracy Topics for Traditional Credit Reporting
  • Panel 3: Accuracy Considerations for Background Screening
  • Panel 4: Navigating the Dispute Process

Panelists included a range of stakeholders in the consumer reporting ecosystem, including representatives from consumer reporting agencies (“CRAs”), trade associations, furnishers, and consumer advocacy organizations.

In her closing remarks, Maneesha Mithal, Associate Director in the FTC’s Division of Privacy & Identity Protection, discussed three key takeaways and themes from the workshop:

  • (1) Alternative Data: Mithal noted that the issue of alternative data came up on almost every panel, and that there appeared to be a consensus that using some types of alternative data may benefit consumers and the industry. Mithal noted that a number of panelists expressed caution about using “fringe data,” including social media data.In a panel discussion, Michael Turner, founder and President of the Policy and Economic Research Council (“PERC”), drew a distinction between “proven payment data,” including payments for utilities, media, and rent, and unproven “fringe data” or “unstructured data,” including information from social media. Turner, along with a number of other panelists, believed that reporting proven payment data would be beneficial for consumers. Francis Creighton, President and CEO of the Consumer Data Industry Association (“CDIA”), noted that consumers are currently experiencing the “downside” impacts of the reporting of negative information about the non-payment or late payment of obligations for utilities, media, and rental housing, but are not receiving the “upside” benefits of reporting on the positive payment histories on those recurring obligations. Consumer advocates, such as Ed Mierzwinski of U.S. Public Interest Research Group (“PIRG”), expressed skepticism regarding the use of certain alternative data, such as utility payment data, and the ability of the industry to ensure the accuracy of such data.
  • (2) Role of Technology: Mithal also noted that there was some consensus that technology, including Artificial Intelligence (“AI”) and pattern recognition, may improve the quality and accuracy of consumer report information. Mithal stated that there appeared to be less consensus regarding the use of technology in data matching, with some panelists expressing the view that manual review is still necessary to ensure maximum possible accuracy. Mithal also noted that some panelists expressed the view that the CFPB should exercise its supervisory authority to examine CRAs and furnishers’ use of technology in consumer reporting.
    • In general, industry panelists spoke favorably about the prospects for AI and other technologies. For example, Eric Ellman, Senior Vice President, Public Policy and Legal Affairs at CDIA, discussed the use of technology in dispute intake, including filtering credit repair disputes from legitimate consumer disputes. Chi Chi Wu of the National Consumer Law Center expressed skepticism about relying on AI and other technologies for data matching and dispute investigations.
  • (3) Accuracy: Mithal concluded by discussing the accuracy of consumer reporting more generally, and stated that some panelists believe that the regulators should issue specific guidance in this area. Mithal also noted that panelists discussed both the importance of data accuracy with respect to consumer reports and furnished data, including ways in which CRAs may oversee furnishers.
    • In general, industry panelists pointed to substantial improvements made in recent years with regard to the accuracy of consumer reports, with repeated emphasis on improvements brought about by the National Consumer Assistance Plan (“NCAP”), an outgrowth of a multi-state attorney general settlement with the three nationwide CRAs in May 2015. Turner discussed improvements between the early and more recent studies of data accuracy. Consumer advocates stressed continuing problems with data accuracy, including the reappearance of derogatory information on consumer reports.


Continue Reading FTC and CFPB Host Workshop on Accuracy in Consumer Reporting

On November 19, the Basel Committee on Banking Supervision (the “BCBS”) released a report on open banking and application programming interfaces (“APIs”), focusing specifically on aspects of open banking related to customer-permissioned data sharing, including sharing between a customer’s bank and various third party firms. The report builds on the BCBS’ February 2018 paper (“Sound Practices: Implications of fintech developments for banks and bank supervisors”), which noted the increasing adoption of advanced technologies—including APIs—by banks, service providers, and fintech firms to deliver innovative financial products and services. The key findings from the report are outlined below.

Continue Reading Basel Committee on Banking Supervision Releases Report on Open Banking

Last July, the IRS announced its Virtual Currency Compliance Campaign, designed to intensify the IRS’s efforts to counter the underreporting of income related to cryptocurrency use. Through the campaign, the IRS will address noncompliance through taxpayer education, increased audits and initiations of criminal investigations.

This past week the IRS began sending “educational” letters to more than 10,000 taxpayers who either potentially failed to report income and pay the tax from cryptocurrency transactions, or did not report their transactions properly. The IRS sent out three variations of the letters — Letter 6173, Letter 6174, or Letter 6174-A — depending on the severity of the perceived violation. Letters 6174 and 6174-A ask taxpayers to review their returns and file an amended return if necessary; Letter 6173 is a more serious warning that also requires a signature under perjury from the taxpayer affirming U.S. tax law compliance.


Continue Reading IRS Ramps Up Efforts to Target Taxpayers Who Deal in Cryptocurrency

On July 23, the New York State Department of Financial Services (“DFS”) announced a new Research and Innovation Division.  The Division will assume responsibility for licensing and supervising virtual currencies.  It will also “assess efforts to use technology to address financial exclusion; identify and protect consumer data rights; and encourage innovations in the financial services

On May 21, 2019, the U.S. Securities and Exchange Commission (the “SEC”) issued guidance to national securities exchanges and the Financial Industry Regulatory Authority (“FINRA”) (referred to as “SROs”) clarifying the SEC’s expectations with respect to their market data fees. These guidelines clarify enhanced standards for SROs to increase their fees for products and services, including fees for market data and connections, which has become a significant revenue source for data providers.
Continue Reading SEC Issues Guidance on Changes to Stock Exchange Fees for Market Data and Connections

On April 30, 2019, the Office of the Comptroller of the Currency (“OCC”) opened a 45-day public comment period on its Innovation Pilot Program (the “Program”).  In accordance with the agency’s objective of providing constructive and proactive supervision, the OCC’s proposed Program is intended to encourage the testing of innovative activities – including products, services,

On Wednesday, March 27, 2019, the CFTC’s Market Intelligence Branch of the Division of Market Oversight issued a report on the impact of automated orders in futures markets to determine how technological change affects futures trading. Automated trading refers to orders that are generated or routed without human intervention. The CFTC presented the report before